Nigeria’s Appeal Against P&ID Arbitral Award Suffers Setback

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The English Court of Appeal sitting in London has rejected Nigeria’s application for leave to appeal part of the decision of a London Commercial High Court presided over by Justice Christopher Butcher.

Some of the decisions of the commercial court against which the Nigerian government had expressed displeasure and a resolve to appeal are the court’s August 16 confirmation of the award of $9.6 billion granted Process and Industrial Development Limited (P&ID) by an arbitral tribunal sitting in London.

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The country is also appealing against Justice Butcher’s September 26 decision which slammed a conditional stay of execution of the award set at $200 million.

It would be recalled that Nigeria on September 26 successfully sought the right to appeal the said August ruling that would have converted the arbitral award into a judgment, which would make it easier for P&ID to seize its assets.

While dismissing Nigeria’s application to appeal part of the decision, Rt. Hon. Justice Flaux of the Appeal Court held that the grounds of the application were “totally without merit… hopeless [and] had no realistic prospect of success”.

He, therefore, ordered hearing of grounds 2 to 6 before the Court of Appeal. The hearing is to hold before Easter of 2020.

P&ID said it welcomes these two developments as major milestones.

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Meanwhile, the Federal Government on Wednesday, November 27 finally provided a bank guarantee for $200 million as security for obtaining the stay.

Hence, the seeming attempts by the government to avoid paying the sum have practically been thwarted. Nigeria had boasted it would fight making any kind of payment to P&ID.

As a result, the guarantee of $200 million will be released to P&ID if and when Nigeria’s appeal fails.

But according to Abubakar Malami, the Attorney General of the Federation and Minister of Justice, Nigeria is appealing the core decisions of the London Commercial Court because it has uncovered “evidence of substantial fraud” as vitiating the credibility of the gas contract entered between Nigeria and P&ID.

Nigeria’s case of fraud is being based on convictions – following investigation and criminal trials – that have been secured in Nigerian courts against some individuals connected to P&ID in the country.

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However, P&ID, through its spokesperson, has criticised the investigations that led to the said “uncovering of substantial fraud,” describing them as “sham” that would “never pass muster.”

The company explained that the evidence of substantial fraud which Nigeria is claiming against the contract was not obtained bona fide, but by the “government-sanctioned campaign of harassment, intimidation, illegal detentions, forced confessions and show trials.”

It further observed that: “The claims of fraud by the government are not credible, and impugn both the English Court and the Arbitration proceedings chaired by Lord Leonard Hoffman.

“The Nigerian government at the direction of AG Malami launched a sham investigation by the Economic and Financial Crimes Commission (EFCC) in a desperate attempt to manufacture evidence in order to evade its obligation pursuant to the rulings of the arbitration panel and the English Commercial Court.

“The so-called ‘evidence’ presented by AG Malami to the English Court in his personal witness statement is derived from:

“Illegally interrogating Justice Alfa Belgore, a retired Justice of the Supreme Court of Nigeria, who provided expert evidence to the arbitral tribunal on issues of Nigerian law in the original P&ID-Nigeria arbitration, and also detaining his assistant for six nights.

“Illegally interrogating and detaining Nigerian lawyers for P&ID, including the illegal seizure of P&ID attorney-client files related to the arbitration case.

“Illegally detaining Mohammad Kuchazi and Adamu Usman, who many years ago did some low-level work for P&ID, and coercing them into cooperating with the EFCC’s sham investigation, and into making false representations and entering guilty pleas on behalf of P&ID. Notably, neither of them was ever a representative of P&ID (BVI) despite claims by the Nigerian government.

“Illegally detaining an Irish citizen, Jim Nolan, and threatening him with charges of industrial espionage, only offering to release him upon signing a false confession implicating P&ID (which he has refused to do), and denying him access to legal counsel.”

P&ID further alleged that the government orchestrated a sham trial in which a Nigerian court convicted P&ID in absentia and purported to forfeit all of its assets based on the forced confessions and pleas of two individuals who have no authority to enter a plea on P&ID’s behalf.

According to them, P&ID received no notification or communication from the court or the government regarding the trial.

It said it was not presented with any charges and no evidence, and was given no right of response or defence.

Process & Industrial Development Ltd, a firm based in the British Virgin Islands and set up solely to build a gas processing plant in Nigeria, won a $6.6 billion arbitration award after the 2010 deal collapsed.

The award has been accruing interest since 2013 and is now worth more than $9 billion.

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