Nigeria, on Wednesday, won a hard-won relief from a thorny lawsuit against it by Process and Industrial Developments (P&ID), a company registered in the British Virgin Islands.
The case had dragged on for more than a decade and would have wiped out about one-third of Nigeria’s foreign exchange reserves if victory had gone the way of the company.
An earlier decision of the London Court of International Arbitration six years ago had awarded $6.6 billion against Nigeria for the profits that would have gone to P&ID from a contract to construct and run a gas plant in southern Nigeria if the country had fulfilled the contract terms.
That awarded sum rose to $11 billion over the years from accumulated past dues.
In October, the Nigerian government made a breakthrough in overturning the verdict of the arbitration tribunal when London’s High Court ruled that P&ID got the contract after paying bribes to senior officials of the petroleum ministry.
Had London’s High Court upheld the decision of the tribunal, Nigeria would have come under pressure to settle the substantial claim from its fast-dwindling reserves, whose gross balance currently stands below $33 billion.
P&ID, founded by Irish businessmen Michael Quinn and Brendan Cahill, has been pursuing the claim centring on a controversial gas contract since 2012.
The bid was dismissed because, among other grounds, the award of the contract had been tainted by bribery and fraud.
The court refused P&ID’s request to appeal against the decision.
In August 2012, P&ID took Nigeria to arbitration concerning a contract it signed two years before with the petroleum ministry to construct and operate a gas processing facility.
It contended that the country had not met its obligations under the contract terms, causing it to stall.
However, the circumstances surrounding the contract have been questionable. The contract was the product of a proposal the Nigerian government never asked for but which P&ID made to it. There was no tender conducted.
P&ID also seemingly had little or nothing to show as a track record of work executed in the gas sector to merit a project of that scale requiring such a princely sum to deliver it. It is best known as an offshore company with no assets, having few staffers and no website to speak of.
In 2017, it received the initial award of $6.6 billion to compensate for lost profits from the contract which would have run for 20 years.
Nigeria succeeded in its quest to turn the tables on the company this October when the court granted its prayer to reverse the award.
Justice Robin Knowles ruled that P&ID officials paid bribes to employees of Nigeria’s Federal Ministry of Petroleum Resources to obtain the contract, a fact the company concealed from the arbitration tribunal until further scrutiny brought it to light.
Grace Taiga, a one-time director of legal services at the ministry who had been at the centre of bribery allegations, died in September.
“Mr Michael Quinn in his witness statement of 14 February 2014 (said) that he was “explain[ing] how the GSPA came about” when he did not do that because he did not mention that Mrs Grace Taiga had been paid a US$5,000 bribe at the end of December 2009 and a £5,000 bribe on 29 March 2010,” Mr Knowles said in his judgement on Wednesday.
GSPA is the abbreviation for the controversial gas supply and processing agreement.
“P&ID’s continued bribery or corrupt payment of Mrs Grace Taiga directed to the arbitration period in order to suppress from the Tribunal and Nigeria the fact that she had been bribed when the GSPA came about. This continued bribery or corrupt payment is fairly described by Nigeria as bribery “to keep her ‘on-side’, and to buy her silence about the earlier bribery,” he added.
The judge went further to say P&ID wrongfully held on to Nigeria’s Internal Legal Documents it got in the course of arbitration to closely observe whether Nigeria had found out “the deception being practised by P&ID on the Tribunal and on Nigeria as a party before the Tribunal.”
The high point of the ruling was the decision to brush aside P&ID’s leave to appeal the court’s verdict under section 68 (4) of the Arbitration Act, allowing the dust to settle on the prolonged legal battle.
Mr Knowles’s decision to set aside the award implies that P&ID is not permitted to head back to the tribunal for reconsideration.
News3 years ago
News3 years ago
Privacy3 years ago
Sports2 years ago
Entertainment2 years ago
News3 years ago
Opinion3 years ago