Nigeria Triumphs in $11 Billion P&ID Case

Justice Robin Knowles of the Commercial Courts of England and Wales has ruled in favour of Nigeria in the enforcement of an $11 billion Process & Industrial Developments (P&ID) Limited arbitration award.

The judgment was issued both in open court and electronically via email to the parties on Monday, marking Nigeria’s successful effort to halt the enforcement of the award, which initially favoured P&ID.

According to Justice Knowles, the award against Nigeria by the company was obtained by fraud.

He 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 way in which they were procured was contrary to public policy,” the judge ruled.

The dispute traces back to January 2010 when P&ID signed a Gas Supply and Processing Agreement (GSPA) with Nigeria to develop a processing plant in Calabar, the Cross River State capital. However, the deal fell apart in August 2012, leading P&ID to seek $5.96 billion in compensation from Nigeria through arbitration at the London Court of International Arbitration.

In January 2017, the arbitration panel found Nigeria in breach of the contract and ordered the country to pay the company $6.6 billion, along with interest starting from May 2013. Before the verdict, the interest, fixed at seven percent ($1 million daily), had accrued to over $11 billion.

Nigeria subsequently filed an appeal against the enforcement of the award, and the court granted the relief sought by the country in September 2020.

Nigeria argued that there was substantial evidence of fraud in the contract and the arbitration award’s procurement. The Nigerian side urged the court to set the award aside, highlighting that some individuals involved in the case were facing trials for money laundering and corruption.

In his ruling, Justice Knowles not only concurred that the arbitration awards were obtained by fraud but also found that the manner in which they were procured was contrary to public policy.

He emphasised the gravity of the case and the significance of Section 68 in upholding the rule of law, outlining the court’s powers regarding irregularities in the tribunal, proceedings, or award.

Also, Justice Knowles agreed to consider the question of the order the court should issue at a later date, allowing the involved parties to present their arguments once they have digested the judgment.

This decision maintains a fair and thorough legal process in this complex international dispute.