NATION AFRICA
What you need to know:
- P&ID claimed that Nigeria had breached the terms of its contract by failing to provide gas for the power plant it was building for the country.
- This week, Nigeria’s Attorney-General and Minister of Justice, Lateef Fagbemi, said the British court had vindicated Nigeria.
Nigeria was on the verge of paying $11bn in accumulated fines for breaching a contract to supply gas to the national grid, until a court found that the contract itself had been awarded in dubious circumstances.
The story began more than a decade ago, during the administration of President Umar Yar’Adua, who died in 2010. But the story of the murkiness surrounding the controversial contract only came to the fore last week.
The Business and Property Court in London, presided over by Justice Robin Knowles of the Commercial Courts of England and Wales, handed down a ruling on October 23 that spared Nigeria costs that could have brought it to its knees.
The court overturned the $11 billion award against Nigeria in a case brought by Process and Industrial Developments Company (P&ID), an award that Judge Knowles found had been obtained by fraud.
P&ID is a company registered in the British Virgin Islands, but its staff, address and assets are unknown, although they are owned by Irish intermediaries.
Yar’Adua signed a gas supply agreement with the company in January 2010 to boost power generation by refining and supplying gas to the national grid.
The contract to build a gas processing plant in Cross Rivers State was not implemented, nor was the gas delivered to Nigeria.
Defraud the country
After two years of neither side fulfilling its obligations, and the eventual collapse of the project, the firm sued Nigeria in a UK arbitration court in March 2013, winning the case and seeking enforcement of the $11 billion in accrued compensation from 2023.
By 2017, the company had won an arbitration award of $6.6 billion, which continued to accrue interest, rising to around $11 billion.
P&ID claimed that Nigeria had breached the terms of its contract by failing to provide gas for the power plant it was building for the country.
Last month, the court said P&ID had been awarded a contract contrary to public policy and cleared the former Lagos Attorney-General, Olasupo Shasore, of wrongdoing in representing Nigeria in the arbitration.
This week, Nigeria’s Attorney-General and Minister of Justice, Lateef Fagbemi, said the British court had vindicated Nigeria.
“The judgment serves as a damning indictment of predatory international investors, who should now rightly be deterred from preying upon Nigeria and other developing nations to satisfy their greed,” he said on October 29.
“P&ID and its associates, Nigerians and foreigners alike, shamelessly attempted to defraud the country and enrich themselves through sharing Nigeria’s privileged documents, fraud, bribery and corruption on an industrial scale.”
