A British Commercial Court has refused a final appeal by Process and Industrial Developments Company (P&ID) seeking the award of $11 billion against Nigeria over the Federal Government of Nigeria’s termination of a 2010 gas contract.
In the latest judgment on Thursday, Justice Robin Knowles refused P&ID’s application seeking to appeal the October 23 judgment of the court, which voided its $11 billion arbitral award for lack of merit.
The court had on December 9 also ordered P&ID to pay the sum of $20 million in favour of Nigeria after 28 days over the failure of their claim against Nigeria.
In the main judgment on October 23, the judge ruled that based on the circumstances of the contract and the award, “Nigeria succeeds in its challenge under Section 68” of the international arbitral rules.
Nigeria had challenged the “irregularity” and bribing of officials in the ministries of Petroleum, Police Affairs and Defence in the $10 billion arbitral award to P&ID over a 2010 gas-supply contract which arose from its plans to establish an Accelerated Gas Development project in Calabar, Cross River State.
The government alleged that the two Irish owners of the firm, Michael Quinn and Brendan Cahill made financial transfers to Nigerian government officials, including Mrs Grace Taiga.
The variation and eventual failure of the gas-to-power project forced P&ID, which claimed it had spent $40 million in mobilisation to the site, to approach an international arbitration panel in London over a breach of the contract terms in June 2012.
Thus, P&ID claimed Nigeria violated the terms of its agreement by failing to provide gas for the power plant it wanted to build for the country.
In 2015, P&ID won a judgment for a $6.6 billion compensation against Nigeria, which accumulated interest continued to rise.
On 29 April, 2016, the then Minister of State for Petroleum, Dr Ibe Kachikwu, wrote to President Muhammadu Buhari asking him to approve the Ministry of Justice taking over the case.
On May 5, 2016, Nigeria issued an application in the Nigerian High Court to have the Tribunal’s Procedural Order No.12 set aside.
On 24 May 2016, the high court made orders extending the time for Nigeria to apply to set aside the Award on Liability and setting aside and/or remitting for consideration all or part of that award.
A senior lawyer, who participated in Nigeria’s defence team and would like to remain anonymous, said yesterday that the latest application ought to be the final in the matter, although some lawyers would always find a reason to go to court.
Timelines of the dispute
*Jan 11, 2010, President Umar Yar’Adua signs a 20-year contract with P&ID, in which the company would build a gas processing plant
*Aug 22, 2012, P&ID begins arbitration process, alleging breach of contract.
*July 17, 2015, London tribunal finds that Nigeria had breached the contract and so was liable to P&ID
*Jan 31, 2017, Arbitration tribunal issues final award of $6.6bn and attaches a pre- and post-judgment interest rate of 7per cent
*Jan 28, 2018, Nigeria directs the Economic and Financial Crimes Commission to probe the P&ID deal
*Mar 16, 2018, P&ID applies to the English High Court to enforce the final award and begins a parallel process in the US
*Sept 26, 2019, English High Court allows P&ID to enforce award but grants Nigeria permission to appeal the award and said the company could not begin seizing state assets
*Jan 24, 2020, Nigeria requests a hearing to present what it says is evidence of fraud
* Sept 2020, Nigeria wins a £1.5 million damages for incurred cost in the country’s successful suspensiom of the enforcement award on the grounds of fraud
*Oct 23, 2023, A British Commercial Court finds that the process for the arbitral award was fraudulent and nullifies the same
*Dec 9, 2023, the UK court awards the sum of $20m against P&ID to be paid within 28 days
*Dec 21, 2023, refuses P&ID’s application to appeal the $11bn rejection.
