British Court Rules Against Nigeria, Orders P&ID To Seize Assets Worth $9bn

A British court has ordered the Process and Industrial Development Limited (P&ID) to seize Nigerian assets worth $9 billion.

According to a report by Reuters, the court in a judgement delivered on Friday, August 16, granted the foreign firm the right to seize the Federal Government’s assets over an aborted gas project.

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Why Court Ruled In Favour of P&ID

P&ID, an engineering and project management company with about 30 years’ experience in Nigeria, founded by two Irish, Michael Quinn and Brendan Cahill, had entered into the gas and supply processing agreement  with Nigeria in 2010, stating that the company would build a state-of-the-art gas processing facility along the country’s coast.

The project was to refine associated natural gas (also known as wet gas) into non-associated natural gas (lean gas) to be used by Nigeria in powering its national electric grid.

Based on the agreement, Nigeria was to supply P&ID with agreed-upon quantities of wet gas, at first 150 million, and eventually, 400 million standard cubic feet (SCF) per day for a 20-year period at no cost.

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This, however, required Nigeria to construct a pipeline to carry the gas to P&ID facility.

The project, however, collapsed two years later because of the failure of the Nigerian government to secure a supply of wet gas or to build the pipeline to bring gas to the processing plant, forcing the company to declare a dispute.

The Journey After P&ID Declared A Dispute

Proceedings commenced on January 29, 2013 before the London arbitration tribunal composed of Leonard Lord Hoffmann (presiding); Sir Anthony Evans QC, nominated by P&ID; and Chief Bayo Ojo (SAN), nominated by Nigeria.

On February 10, 2017, the court eventually ruled an overall award of $6.597 billion in damages against Nigeria which increased to $9 billion after interest.

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The judge’s decision, however, means that the arbitration has been converted into a legal judgement, allowing P&ID to attempt a seizure of the assets which is 20% of Nigeria’s foreign reserves

Reacting to the court ruling Andrew Stafford Q.C. of Kobre & Kim representing the firm said “We are pleased that the Court has rejected Nigeria’s objections both to the arbitration process and to the amount of the award, and that it will grant permission to P&ID to begin enforcement of the award in the United Kingdom.”

He added: “P&ID is committed to vigorously enforcing its rights, and we intend to begin the process of seizing Nigerian assets in order to satisfy this award as soon as possible.”

Effects of Court Order on Nigeria Economy

Based on the official exchange rate of 306.9N/1$ as seen on the Central Bank of Nigeria, the country will incur a debt of N2.76trillion, indicating a huge loss of assets if a settlement is not reached between both parties.

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