HeadlineP&ID Vs Nigeria: UK Court Quashes $11bn Arbitration Award Against Nigeria

P&ID Vs Nigeria: UK Court Quashes $11bn Arbitration Award Against Nigeria


October 23, (THEWILL) – The Business and Property Courts of England and Wales, sitting in London, has voided an arbitration order on Nigeria to pay a total of $6.6 billion as damages accruing from March 20, 2013, with interest at a rate of seven per cent, which amounts to $11 billion in 2017.

The judgment followed an appeal before the court by the Federal Government of Nigeria against an Irish firm, Process and Industrial Developments Limited (P&ID).

The case stems from a contract for a gas project awarded by Nigeria in 2010 to P&ID.

In 2010, the Nigerian Ministry of Petroleum Resources signed a contract for the construction and operation of a new gas processing facility with P&ID, a company incorporated in the British Virgin Islands.

Under the contract, Nigeria was to supply natural gas (“wet gas”) at no cost to P&ID’s facility. For its part, P&ID was to construct and operate the facility. It would process the gas to remove natural gas liquids—which P&ID was entitled to—and return lean gas to Nigeria at no cost, which would be suitable for use in power generation and other purposes

The gas processing facility never materialised, for reasons that were disputed.

Claiming Nigeria breached the terms of the contract, in August 2012, P&ID initiated arbitration, alleging that Nigeria had repudiated the contract.

On January 31, 2017, a private arbitration tribunal ordered Nigeria to pay P&ID $6.6 billion as damages accruing from March 20, 2013, with interest at a rate of seven per cent, which amounts to nearly $11 billion.

Following the judgment, Nigeria, through Mark Howard, a British lawyer, applied for an extension of time and relief from sanctions in the Business and Property Courts of England and Wales. The application was granted by Judge Ross Cranston in September 2020.

In August 2022, Nigeria levelled fresh claims of fraud against P&ID. The Federal Government had sought to convince a UK High Court Court that the contract was a scam ab initio.

The lawyers representing the Nigerian government told Sir Ross Cranston, head of the court, that P&ID knew from the beginning that there was no deal, noting that it was only a facade to fleece the Nigerian people.

P&ID, founded by the late Michael Quinn and Brendan Cahill, Nigeria told the court, had no intention to perform any obligation concerning the purported contract, the reason the company went about bribing Nigerian government officials at the time.

Nigeria further alleged in its amended case filed in July 2022 that during arbitration proceedings, which ran for five years until 2017, two men who owned and worked for P&ID “obtained privileged and/or confidential documents” about the government’s entry into the 2010 gas deal, its strategy for defence and discussions about striking a settlement.

Nigeria had alleged that the gas deal was a scam conceived to defraud the country. It alleged that the contract was secured through dishonest means that included bribery and perjury and prayed the court to quash the arbitration award, which amounted to a total of $11 billion.

In a judgment delivered on Monday, the Presiding judge of the court, Robin Knowles, upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraud.

The court consequently quashed the order aced on Nigeria to pay the $11bn to P&ID.

See full court judgment:
Nigeria v P&ID judgment

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