GHL–First Bank Arbitration Echoes The P&ID Scandal

This article draws a parallel between the recently concluded GHL-First Bank (FBN) and the P&ID v Nigeria arbitrations, GHL-FBN marred by the concealment of a material fact known by FBN, that the Sole Arbitrator holds a substantial number of shares in its holding company, FirstHoldCo, giving rise to allegations of bias and violation of Nigerian public policy, amongst other infractions; while in P&ID, events leading up to the arbitration were marred by fraud and corruption. This article evinces the fact that, just like P&ID, there appear to be firm grounds in GHL-FBN, for the arbitral award to be set aside and not enforced

Introduction:

When revelations emerged that Retired Supreme Court Justice Kumai Bayang Aka’ahs, the sole Arbitrator in the high-stakes arbitration between General Hydrocarbons Limited (GHL) and First Bank of Nigeria, allegedly held undisclosed shares in FirstHoldCo the Bank’s parent company, the Nigerian public braced up for another scandal of compromise and corruption. Only a year ago, Nigeria celebrated a rare and decisive legal victory in London’s High Court, where Justice Robin Knowles exposed the multi-layered fraud behind the notorious P&ID arbitration.

An Arbitration System Hindered by Misconduct, Lack of Oversight and Opaqueness

In the same scale and context, the two cases reveal a troubling underlying pattern of secrecy, compromised integrity, lack of transparency, and institutional vulnerability. Together, they highlight an arbitration system hindered by misconduct and inadequate oversight. While arbitration is inherently private, it must never be opaque. Its foundation rests on the principle of impartiality. Therefore, both Nigerian law and international standards require Arbitrators to disclose any circumstances that could raise doubts about their neutrality, especially regarding financial interests. If the whistleblower allegations against Justice Aka’ahs are correct, then his shareholding in FirstHoldCo. represented a significant conflict of interest. The international standard makes it clear that, even a minor shareholding can compromise the entire process. This is not about whether the Arbitrator was genuinely biased, but whether he might appear biased to a reasonable observer. In arbitration, the perception of fairness, is as critical as fairness itself.

Parallels between GHL-First Bank and P&ID

The parallels between the GHL arbitration and the P&ID scandals extend beyond the coincidence of concealment of material information, abuse of trusted positions, massive financial stakes, and failure to observe due process, but in fact, reveal patterns of high-level corruption. In the GHL-First Bank arbitration, the alleged non-disclosure of shareholding by Retired Justice Aka’ahs, the sole Arbitrator, equates in essence to the bribery and corruption – the same issues that led to the overturning of the P&ID arbitral award, which had earlier awarded the sum of $ 11 billion against Nigeria.

A retired Supreme Court Justice, sitting over a dispute involving a company in which he holds a financial stake and another party, goes far beyond a mere conflict of interest, reflecting active corrupt conduct. It creates such a level of corrupt interest, because Justice Aka’ahs, the sole Arbitrator was actually presiding over a case where he is, in fact, an owner of one of the parties (First Bank) by reason of significant shareholding. And, significant because that was the highest in his share portfolio. He becomes a direct beneficiary of the proceeds from his own award, which he gave to First Bank, and that constitutes corrupt enrichment. It becomes a criminal act, for a man to be a judge in his own cause.

For years, Nigerians have been told that arbitration is faster, cleaner, and more efficient than court litigation. However, both GHL–FBN and P&ID demonstrate a different reality: arbitration, mainly when shrouded in secret conflicts of interest, can become a perfect environment for misconduct. The danger is compounded when there’s only one Arbitrator who is the sole decision-maker (like Retired Justice Aka’ahs in the GHL-FBN arbitration), and one with an undisclosed interest or a compromised individual who withheld a material fact, casting a fundamental error on the entire arbitration.

Across the globe, the P&ID v Nigeria arbitration scandal has stressed the need for total compliance with the Arbitration and Mediation Act 2023 (AMA) and international arbitration standards. Section 8 of the AMA imposes a continuing duty on Arbitrators, to disclose circumstances that may give rise to justifiable doubts as to impartiality, which would lead to the setting aside of any arbitral award. The IBA Guidelines likewise consider undeclared financial interests in a party or its parent company, as a “Red List” circumstance. In the GHL v First Bank arbitration, the non-disclosure of shareholding by the sole Arbitrator constitutes a prima facie breach of this duty, which further raises questions of potential criminal self-enrichment by being a direct financial beneficiary of the award.

In the P&ID case, the arbitration process was compromised not because of an Arbitrator’s conflict, but because the Claimant itself concealed material facts of fraud, bribery, and corruption related to the contract’s validity. In the GHL-First Bank arbitration, it is the Arbitrator himself that is directly caught up in a corrupt practice, in the likely apprehension of a reasonable person. Therefore, both the P&ID and GHL-First Bank Arbitration cases highlight how non-disclosure not only creates the impression that one party or the Arbitrator himself manipulated the arbitration in favour of one side in which he has interest to the detriment of the other party, but that the Arbitrator fraudulently gave the arbitral award to protect his financial interests and make profit.

What is therefore instructive, is that just as the fraudulent P&ID arbitration was overturned; it is now expected that the GHL-First Bank arbitration should face same judicial scrutiny. Will the Nigerian Judiciary rise to the occasion, as the UK did? That’s the question requiring answers.

Reasons for Setting an Award Aside

Under the express provisions of Section 55(3) & (4) AMA, based on public policy, an award may be set aside if: the composition of the tribunal violated statutory standards; the award is contrary to public policy; and there was a breach of natural justice. These grounds are directly captured in both the P&ID and GHL-First Bank cases. In the P&ID case, the English High Court ruled that, no award based on fraud or bribery can withstand judicial scrutiny. Similarly, an award influenced by an undisclosed financial interest would be contrary to Nigerian public policy and the express provisions of the AMA, and would be liable to be set aside; therefore, it cannot be enforced. It is the same basis for challenging both awards, being fraud, bias, misconduct, or violation of natural justice, all of which invalidate arbitral legitimacy.

Both cases expose flaws in Nigeria’s arbitration system, including secrecy, conflict of interest, inadequate oversight, and concealment of material facts. This should cause Nigerians to reflect on the broader threat that, arbitration is becoming a new frontier for elite manipulation, enabling insiders to secure decisions with massive financial implications behind closed doors. If this emerging trend of corruption is not checked, companies could face unfair liabilities, put public funds at risk, and reduce confidence in arbitration as a business-friendly mechanism for resolving disputes.

The scandal of the GHL–FBN whistleblower revelations and the P&ID case, shows that misconduct – whether by arbitrators or contracting parties – can undermine the entire system, making non-disclosure a new form of corruption. Thus, when an arbitrator sits on a dispute whilst holding shares in one of the parties’ companies, the process becomes contaminated, even without overt expression. Both GHL–FBN and P&ID demonstrate how hidden ties and fraudulent origins eventually unravel, often at a serious national cost, reenacting the principle that concealed interests ultimately blow up into national scandals. Therefore, Nigerian private companies like GHL cannot afford to allow such financial and reputational damage to their corporate interests, that arise from conflicts of interest, which dictate the outcome of an arbitration process.

Frank Tietie is a Legal Practitioner

Disclaimer: This article is entirely the opinion of the writer and does not represent the views of The Whistler.