Nigeria has successfully overturned an $11 billion arbitration award favouring Process & Industrial Developments (P&ID).
Justice Robin Knowles of the Commercial Courts of England and Wales delivered the judgment via email on Monday, October 23, 2023, bringing an end to over five years of intense legal battles between the Nigerian government and the firm.
The victory came after Nigeria argued that the gas processing contract, which led to the arbitration award, was obtained through fraudulent means.
Timeline of legal battle
The ill-fated gas supply and processing agreement (GSPA) was signed on January 11, 2010, between Process and Industrial Developments (P&ID) Ltd and Nigeria to develop a processing plant in Calabar, Cross Rivers state.
However, the agreement collapsed on August 22, 2012, as P&ID failed to fulfill its obligations, leading to private arbitration proceedings.
The arbitration tribunal, on July 17, 2015, ruled that Nigeria breached the contract, culminating in an order on January 31, 2017, for Nigeria to pay P&ID approximately $6.6 billion, with interest accruing at a rate of 7% starting from March 20, 2013.
The potential payment had escalated to over $11 billion due to the accruing interest of $1 million per day.
President Muhammadu Buhari took a decisive step in June 2018, directing then-Attorney General Abubakar Malami to investigate the GSPA.
Despite challenges, Nigeria's determination remained steadfast, leading to significant developments such as the conviction of P&ID and P&ID Nigeria on charges of fraud and money laundering by the Economic and Financial Crimes Commission (EFCC).
Justice Butcher of the UK commercial court granted P&ID the right to seize Nigeria's assets in August 2019, converting the arbitration award into an enforceable judgment. Nigeria, however, appealed this decision.
Nigeria’s fight gained momentum when the English court allowed the country to challenge the arbitration award on September 4, 2020. Justice Cranston stated that there was a prima facie case of fraud and recognised Nigeria's efforts to investigate the alleged fraud.
The case reached a critical juncture on January 23, 2023, when Nigeria's substantive application to set aside the arbitration award was heard by Justice Robin Knowles.
Nigeria presented a compelling argument, asserting that P&ID and its associates were involved in bribery and corruption on an "industrial scale." The judgment was reserved until today.