Nigeria has secured a significant legal victory in the case of the $11 billion Process & Industrial Developments (P&ID) Limited arbitration award.
Justice Robin Knowles of the Commercial Courts of England and Wales ruled in favor of Nigeria, preventing the enforcement of the award that was initially granted to P&ID.
The judgment, which was delivered in open court and shared electronically via email to the concerned parties on Monday, found that the award granted to the company against Nigeria was obtained through fraudulent means.
Justice Knowles stated, “In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the Awards were obtained by fraud and the Awards were and the way in which they were procured was contrary to public policy.”
The case traces back to a Gas Supply and Processing Agreement (GSPA) signed between P&ID and Nigeria in January 2010. The agreement aimed to establish a processing plant in Calabar, the capital of Cross River State. However, the deal collapsed in August 2012, leading P&ID to seek compensation from Nigeria amounting to $5.96 billion through arbitration proceedings at the London Court of International Arbitration.
In January 2017, the arbitration ruled that Nigeria had breached the contract and ordered the country to pay P&ID $6.6 billion, with interest dating back to May 2013. By the time of this ruling, the interest, set at seven percent (equivalent to $1 million daily), had ballooned to over $11 billion.
Nigeria subsequently filed an appeal against the enforcement of the award, and in September 2020, the court granted the country’s request to halt the award’s enforcement. Nigeria argued that there was substantial evidence demonstrating that both the contract and the arbitration award had been secured through fraudulent means.
In his ruling, Justice Knowles not only concurred that the arbitration awards had been tainted by fraud but also determined that the manner in which they had been procured was against public policy.
The judge expressed the gravity of the situation, stating, “What happened in this case is very serious indeed, and it is important that section 68 has been available to maintain the rule of law.”