UPDATED: Nigeria Wins As Court Overturns Judgement Awarding $11bn To P&ID

The Federal Government of Nigeria has won it’s claims against Process & Industrial Developments (P&ID) Limited.

A judgement delivered by Justice Robin Knowles of the Business and Property Court on Monday held that P&ID obtained its multi-billion-dollar arbitration award against Nigeria by fraud.

In 2010, P&ID had entered into an agreement with Nigeria to build a gas processing plant in Calabar, Cross River state, but the company said the deal collapsed because the Nigerian government did not fulfill its end of the bargain.

The company approached a London court claiming Nigeria breached the terms of the contract, and subsequently secured an arbitral award against the country.

A private arbitration tribunal ruled that Nigeria should pay P&ID $6.6 billion as damages, as well as pre-and post-judgment interest at 7 percent.

However, the Federal Government appealed the judgement alleging that the contract was secured through dishonest means that included bribery and perjury and that the arbitration award, which has now risen to $11 billion because of interests, should be quashed.

In his ruling, Justice Knowles upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraud.

The court held that the agreement signed by the Federal Government of Nigeria and P&ID was an overall fraudulent enterprise.

“I am satisfied P&ID did intend to perform the GSPA when it entered into it, and that there were means by which it could have done so. Nigeria has characterised the GSPA as a sham and contended that P&ID as a BVI-registered company with no obvious assets, no relevant experience and few employees, had no genuine intention of performing the GSPA, and would never have been able to do so.

“Whilst P&ID was prepared to bribe in the course of its business, I do not accept it was of the sophistication to conceive at the contract stage a plan to extract large sums of money from Nigeria by means of an arbitration or a corrupt settlement. Consistently, P&ID did not use the GSPA to move directly to arbitration at the first available opportunity.

“I have no hesitation in concluding that Nigeria suffered substantial injustice… And that is even before taking into account what P&ID did with Nigeria’s Internal Legal Documents,” the judge added.

He subsequently held that the awards were obtained by fraud and the Awards were and the way in which they were procured was contrary to public policy.

“I have concluded that when the parties entered into the GSPA, P&ID’s intention was to perform and not simply use the GSPA as a device to get an award or settlement,” he ruled.