In a significant legal victory, the Federal Government of Nigeria has successfully prevailed over Process & Industrial Developments (P&ID) Limited in a long-standing case before a London court.
The ruling, which concluded five years of legal proceedings, saw the court quashing the staggering $11 billion arbitration award previously granted in favor of P&ID.
The judgment was delivered through email by Robin Knowles, a distinguished Justice of the Commercial Courts of England and Wales. It is a verdict of paramount importance for Nigeria, firmly grounding its contention that the gas processing contract had been procured through fraudulent means.
The legal confrontation unfolded within the Business and Property Court in London, pitting the Federal Government of Nigeria against P&ID Limited. This pivotal ruling follows an encouragement by Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), to the successful bidders of the Nigerian Gas Flare Commercialisation Programme (NGFCP), urging them to expedite site development.
Concurrently, the federal government, in collaboration with its partners, has initiated the deployment of small-scale tankers for the transportation of crude oil through the intricate waterways of the Niger Delta. This decision emerged due to the persistent challenges in repairing vandalized pipelines in the region.
P&ID’s legal pursuit stemmed from an agreement signed in 2010 with Nigeria to construct a gas processing plant in Calabar, Cross River State. However, the company alleged that the contract faltered because Nigeria failed to fulfill its obligations.
Citing Nigeria’s breach of the contract’s terms, P&ID sought legal action and secured an arbitral award against the nation. In a tribunal decision on January 31, 2017, Nigeria was ordered to pay P&ID $6.6 billion in damages, alongside pre-and post-judgment interest at seven percent.
Subsequently, Nigeria submitted an application for an extension of time and relief from sanctions, which was granted by Ross Cranston, a judge of the Business and Property Courts of England and Wales, in September 2020. This move led the case back into arbitration.
Nigeria contended that the gas deal was a fraudulent scheme aimed at defrauding the country. Legal representatives for the federal government presented evidence alleging that P&ID officials had resorted to bribery to secure the contract. In contrast, P&ID staunchly denied the allegations and accused the Nigerian government of propagating “false allegations and wild conspiracy theories.”
During the March trial, Nigeria further argued that the contract had been illicitly acquired through dishonest means, including bribery and perjury. As a result, the arbitration award, which had grown to $11 billion due to accumulated interest, was deemed to be null and void.