Process and Industrial Developments Company (P&ID) Limited suffered a setback in the London court on Monday, as the legal dispute ended in favour of the Federal Government of Nigeria.
After years of legal procedures, the court’s nullification of the $11 billion arbitration award in favour of P&ID is a significant win for Nigeria.
Via email, Justice Robin Knowles of the Commercial Courts of England and Wales upheld Nigeria’s claim, citing fraud as the basis for cancelling the gas processing contract.
The judgment in the case involving the Federal Government of Nigeria and Process & Industrial Developments (P&ID) Limited was issued by the Business and Property Court in London.
In response to Gbenga Komolafe’s call, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the bid winners for the Nigerian Gas Flare Commercialisation Programme (NGFCP) were instructed to expedite site development, resulting in this ruling.
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To circumvent the recurring issue of pipeline vandalism in the Niger Delta, the federal government, in tandem with its partners, has commenced using compact tankers to ferry crude oil through the region’s water channels.
P&ID and Nigeria entered into an agreement in 2010 to construct a gas processing plant in Calabar, Cross River State. Nonetheless, P&ID claimed that the Nigerian government’s failure to fulfill its end of the agreement led to the contract’s breakdown.
Based on the claim that Nigeria had breached the contract, P&ID initiated legal proceedings, leading to the procurement of an arbitral award against the country.
As of January 31, 2017, a tribunal ruled that Nigeria must pay P&ID $6.6 billion in damages, in addition to pre- and post-judgment interest, set at seven percent.
Nigeria, subsequent to the judgment, appealed for an extension of time and relief from sanctions.
Ross Cranston, a judge of the Business and Property Courts of England and Wales, granted the application in September 2020, which consequently led to the case being referred back to arbitration.
According to Nigeria, the gas deal was purportedly a fraudulent plan devised to deceive and exploit the country.
It was disclosed by lawyers representing the federal government that P&ID officials had allegedly paid bribes to secure the contract.
Refuting the allegation, P&ID pointed out that the Nigerian government had leveled “false accusations and wild conspiracy theories.”
Nigeria asserted during a March trial that the contract had been secured through dishonest tactics, which included bribery and perjury. The country emphasized that the $11 billion arbitration award, now elevated by interest, should be revoked.