The Business and Property Court in London is poised to announce its judgment on October 23 in the legal dispute between the Federal Government of Nigeria and Process & Industrial Developments (P&ID) Limited.
As reported by TheCable, the verdict in the P&ID case will be delivered by Justice Robin Knowles.
Back in 2010, P&ID entered into an agreement with Nigeria to construct a gas processing plant in Calabar, Cross River State. However, the company claimed that the deal disintegrated due to Nigeria’s alleged failure to uphold its end of the agreement. Asserting that Nigeria had breached the contract terms, P&ID pursued legal action and secured an arbitral award against the country.
On January 31, 2017, a tribunal ruled that Nigeria was liable to pay P&ID $6.6 billion as compensation, along with pre-and post-judgment interest at a rate of seven percent. Subsequently, Nigeria sought an extension of time and relief from sanctions, and this application was granted by Ross Cranston, a judge of the Business and Property Courts of England and Wales, in September 2020, effectively returning the case to arbitration.
Nigeria had accused the gas deal of being a fraudulent scheme designed to defraud the nation. Legal representatives for the federal government informed the court that P&ID officials had allegedly paid bribes to secure the contract. P&ID vehemently denied these allegations, countering that the Nigerian government’s claims were “false allegations and wild conspiracy theories.”
In a court trial held in March, Nigeria contended that the contract had been secured through deceptive means involving bribery and perjury, and it demanded that the arbitration award, which had grown to $11 billion due to accruing interests, should be annulled.
In September, reports indicated that P&ID representatives were actively exploring negotiations with the federal government to reach an out-of-court settlement.
Analysts say if Nigeria is ordered to pay the damages, its economy could be severely damaged.
“The negative shock would be monumental,” Olusegun Vincent, associate professor of finance at Pan-Atlantic University in Lagos State, told Al Jazeera.
“It may take us back to the pre-1999 military era, when Nigeria wasn’t creditworthy,” he said, pointing to the risk that the government would be unable to pay its debt.