P&ID: UK Court Throws Out Suit Seeking to Appeal $11 billion Judgement
An $11 billion damages bill against Nigeria for a collapsed gas processing project which was procured by bribery has been thrown out by London’s High Court on Thursday.
The West African country was on the hook for the sum – representing around a third of its foreign exchange reserves – after a little-known British Virgin Islands-based company took Nigeria to arbitration over the deal.
But the High Court ruled in October that the contract was procured by Process & Industrial Developments (P&ID) paying bribes to a Nigerian oil ministry official.
Judge Robin Knowles also found that P&ID failed to disclose the bribery when it later took Nigeria to arbitration.
He said in a further ruling on Thursday that the damages award should be thrown out immediately, rejecting P&ID’s argument that the case should be sent back to arbitration.
P&ID was also refused permission to appeal against the ruling, though the company can apply directly to the Court of Appeal.
Earlier this month, Judge Knowles ordered P&ID to pay the Nigerian government £20 million in damages and compensation.
The company had filed for fresh arbitration to revive their claims against Nigeria for alleged breach of a 2010 gas supply agreement.
However, the High Court in London ruled that the arbitration could not proceed as long as the 2023 judgment remained in place.
The judge found that P&ID had paid bribes to Nigerian officials involved in the drafting of the gas supply and processing agreement (GSPA) in 2010.
On January 31, 2017, a tribunal had issued a ruling requiring Nigeria to compensate P&ID with $6.6 billion in damages, in addition to both pre-and post-judgment interest at a rate of 7 per cent. The sum later hit over $11 billion after bearing interests.
Ross Cranston, a judge within the Business and Property Courts of England and Wales, granted the application in September 2020, but lawyers representing the federal government alleged that P&ID executives had resorted to bribery to obtain the contract.
P&ID refuted the accusation and levelled claims against the Nigerian government, stating that they were making “unfounded allegations and unsubstantiated conspiracy theories.” Recently, Knowles, sitting in a court in the UK court, ruled in favour of Nigeria.
The judge held that: “ The arbitration awards were obtained by fraud and the awards were, and the way in which they were procured was, contrary to public policy”.
