Close call
Nigeria won its bid to overturn the $6.6 billion judgement — which had risen to $11.5 billion with interest — won by Process & Industry…
Nigeria won its bid to overturn the $6.6 billion judgement — which had risen to $11.5 billion with interest — won by Process & Industry Developments (P&ID) Limited over a failed 2010 deal to develop a gas processing plant. Judge Robin Knowles of the Business and Property Court in London ruled that the award was obtained by fraud. The judge also found that P&ID had paid bribes to a Nigerian oil ministry official in connection with the gas contract and failed to disclose this when it later took Nigeria to arbitration over the deal’s collapse.
This is a very important judgement win. For what it’s worth, congratulations to all Nigerians! The enforcement of this judgement debt would have worsened an already bad situation. A loss would have created a huge liability for the country, compounding the ongoing fiscal and monetary crisis. To put things in context, the judgement debt accounts for more than 30% of Nigeria’s proposed 2024 budget or 33% of the country’s foreign reserves, as reported by the central bank. How this contract was approved and how the first judgement was reached without swift government action reveal the gaps existing in governance in Nigeria. Although this judgement is good news for the new government, the coast is not yet clear. Section 68 of the UK Arbitration Act (1996) gives three options for what may follow. First, the court may ask the tribunal to review its decision. It may annul the award in part or in full. The court may also declare the award entirely or partially ineffective. Both parties have been given some time to evaluate the ruling and present their arguments before a decision is reached. Therefore, the country needs to be more deliberate about how it contracts for these transactions and also understand that international law will not respect the local shenanigans of the country if Nigeria is liable. It is also expedient for the Nigerian government to prosecute all the complicit persons and entities as a deterrent. If P&ID paid bribes, which is the basis of its loss, it is important to prosecute and jail those who received the bribes. Otherwise, we would have taken no lessons, and this type of scenario will repeat itself in future. Nigeria cannot afford that.