In a significant legal development, the Business and Property Court in London, presided over by Justice Robert Knowles, has ruled in favor of Nigeria, halting the enforcement of the $11 billion arbitration award in the case known as CL-2019-000752, according to a report by The PUNCH.
The court’s judgment centered on the fraudulent nature of the 2010 contract that P&ID secured to construct a gas processing plant in Calabar, Cross River State. Justice Knowles expressed his findings, stating, “In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds in its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the Awards were obtained by fraud, and the way in which they were procured was contrary to public policy.”
He underscored the seriousness of the case, emphasizing the importance of maintaining the rule of law through section 68. This ruling signifies a significant turning point in the protracted legal battle between Nigeria and Process & Industrial (P&ID).
Over the years, the dispute between Nigeria and P&ID has revolved around the accusation that the Nigerian government failed to supply gas as agreed upon, resulting in a $6.6 billion judgment debt in 2017 when the arbitration tribunal ordered Nigeria to compensate P&ID, with interest dating from March 2013.
Following this, a resolution was reached during the administration of former President Goodluck Jonathan to make a payment of $850 million, which was subsequently handed over to President Buhari’s administration. However, President Buhari contested the agreed sum and challenged the award’s enforcement in the English Commercial Court.
The London court, while granting Nigeria’s request to stay any asset seizures during the ongoing legal challenge, ruled that Nigeria must deposit $200 million with the court within 60 days to ensure the stay. Additionally, Nigeria was instructed to cover some of the court costs incurred by P&ID within 14 days.
The original ruling on August 16 effectively converted the arbitration award held by P&ID into a legal judgment, potentially enabling the British Virgin Islands-based firm to seek the seizure of international assets.
In 2018, Nigeria initiated an investigation into P&ID, during which evidence of two bank transfers totaling $20,000 from Dublin-based Industrial Consultants (International) Ltd., a part of the P&ID group of companies, to Grace Taiga, a Nigerian government lawyer overseeing the gas plant contract award, was discovered.
This landmark decision marks a significant victory for Nigeria in this long-standing legal battle, with implications for the broader issues surrounding the contract and the enforcement of arbitration awards.