A court of appeal in the United Kingdom (UK) has dismissed the appeal of Process & Industrial Development (P&ID) on a previous judgment halting the enforcement of its $11 billion award against Nigeria.
In a unanimous decision, Lord Justice Snowden, the lead judge, permitted P&ID to appeal the judgment but dismissed the appeal.
The two other judges are Lord Justice Fraser and Julian Flaux.
BACKGROUND
P&ID had entered into a deal in 2010 to build a gas processing plant in Calabar, Cross River state, but the company said the agreement collapsed because the Nigerian government did not fulfil its end of the bargain.
The Nigerian government alleged that the gas deal was a scam conceived to defraud the country.
But P&ID denied the allegation and accused the Nigerian government of “false allegations and wild conspiracy theories”.
Consequently, P&ID took legal recourse and secured an arbitral award against the country.
On January 31, 2017, a tribunal ruled that Nigeria should pay P&ID $6.6 billion as damages, as well as pre and post-judgment interest at seven percent, which later amounted to $11 billion.
In October 2023, Robin Knowles, justice of the commercial courts of England and Wales, halted the enforcement of the award by upholding Nigeria’s prayer that it was obtained by fraud and in violation of section 68 of the English Arbitration Act 1996.
The judge found that P&ID paid bribes to Nigerian officials involved in the drafting of the gas supply and processing agreement (GSPA) in 2010.
He also found that P&ID was illegally in possession of Nigeria’s privileged legal documents during the arbitration hearings.
The judge ordered that the company pay £43 million in compensation to Nigeria as legal fees and disbursements.
THE CONTENTIOUS ISSUES IN THE APPEAL
The judgment of the UK court of appeal was delivered on Friday.
In a copy of the judgment published on the UK judiciary website, one of the issues raised in the P&ID appeal bordered on whether the lower court was wrong to order the £43 million legal cost to be paid in British pound sterling and not in naira.
The company argued that Nigeria funded its legal services by exchanging naira from its consolidated revenue fund.
“The second issue (which is only reached if this Court has jurisdiction and grants permission to appeal) is whether the Judge was right to order P&ID to pay Nigeria’s costs in sterling,” part of the court judgment reads.
“Although Nigeria was billed by its English lawyers in sterling and paid them in sterling, P&ID contends that Nigeria funded such payments by exchanging naira from its consolidated revenue fund, so that the Costs Order should have been in naira.
“The issue is of some financial consequence because the naira depreciated significantly against sterling in the period between Nigeria’s payments to its lawyers and the making of the Costs Order.
“Nigeria’s legal fees and disbursements are said to have amounted to around £43 million. P&ID asserts that payment of such fees and disbursements at the relevant times would have cost Nigeria a total of about 23 billion naira; but if P&ID is required to pay £43 million in costs now, that could be exchanged by Nigeria at the current rate to about 76 billion naira.”
Snowden, the lead judge, accepted the arguments of Nigeria that since the legal cost was paid in sterling, the cost order should be paid in the same currency.
“In my judgment, therefore, the judge was right to accept Nigeria’s straightforward submission that because Nigeria had been invoiced and had incurred its liability to its solicitors in sterling and had paid those bills in sterling, the court ought to make its Costs Order in sterling,” the judge ruled.
“I would therefore grant P&ID permission to appeal, but would dismiss the appeal.”
Privacy5 years ago
News5 years ago
News4 years ago
News5 years ago
Opinion5 years ago
News5 years ago
Sports4 years ago