Justice Robin Knowles of the Commercial Courts of England and Wales, United Kingdom has ruled in favour of Nigeria in the enforcement of a $11 billion Process & Industrial Developments (P&ID) Limited arbitration award.
With the judgement handed down physically in the open court, and electronically by email to the parties on Monday, Nigeria succeeded in stopping the enforcement of the award which was initially in favour of P&ID.
President Bola Tinubu immediately applauded the judgement, commending the UK court for prioritising the merits of the case above all other considerations.
According to the judge, the award against Nigeria by the company was obtained by fraud.
“In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the Awards were obtained by fraud and the Awards were and the way in which they were procured was contrary to public policy”, Justice Knowles ruled.
In January 2010, the P&ID signed a Gas Supply and Processing Agreement (GSPA) with Nigeria to develop a processing plant in Calabar, the Cross River State capital. But the deal failed in August 2012 and the company sought a $5.96 billion compensation from Nigeria with arbitration proceedings against the country at the London Court of International Arbitration.
In January 2017, the arbitration said Nigeria breached the contract and ordered the country to pay the company $6.6 billion with interest starting from May 2013. Before the verdict, the interest fixed at seven percent ($1 million daily) had accumulated to over $11 billion.
Subsequently, Nigeria filed an appeal against the enforcement of the award and the court granted the relief sought by the country in September 2020. The Nigerian side argued that there was enough evidence that the contract and the arbitration award were procured by fraud.
The Nigerian side thereby urged the court to set the award aside, saying that some individuals in the case were being tried for money laundering and graft.
In his ruling, the judge not only agreed that the arbitration awards were obtained by fraud but also that the manner that they were procured were contrary to public policy.
He said: “What happened in this case is very serious indeed, and it is important that section 68 has been available to maintain the rule of law. Section 68 (3) provides: “If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may —
“(a) remit the award to the tribunal, in whole or in part, for reconsideration,
“(b) set the award aside in whole or in part, or
“(c) declare the award to be of no effect, in whole or in part.
“The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration”.
“I was asked by Lord Wolfson KC in closing that should my judgment conclude in
favour of Nigeria, as it does, to leave over the question of the order the Court should make so that the parties have the opportunity to present argument once they have considered the judgment. I respect that request and will hear that argument as soon as that can be arranged”.
President Tinubu said: “This landmark judgement proves conclusively that nation-states will no longer be held hostage by economic conspiracies between private firms and solitarily corrupt officials who conspire to extort and indebt the very nations they swear to defend and protect.
“Today’s victory is not for Nigeria alone; it is for our long-exploited continent and for the developing world at large, which has for too long been on the receiving end of unjust economic malpractice and overt exploitation.
“Nigeria is appreciative of the tremendous efforts of the defence team and acknowledges the role of the Federal Ministry of Justice and the Office of the Attorney-General in defending Nigeria’s interest in this case”.
