Nigeria: How to Fleece Nigeria

(file photo)
17 August 2019

The age old art of fleecing Nigeria got a notch higher yesterday when it was legitimised by a British Court.

Going by the UK judicial affirmation of an obviously sham $6.597 billion (N2.3 trillion Naira) judgement debt, for an apparent fraudulent contract, awarded against the federal government over alleged breach of contract, it is now looking so easy for foreign firms to come into the country with their briefcase, pass a few dollars around corrupt officials, sign a contract with a government agency, oust the jurisdiction of Nigerian courts through sham arbitration clauses, pull out after some time without doing anything or investing a dime, and return to their countries to make huge claims for breach of contract through the loopholes already embedded in the flawed contract agreements.

In 2010, the British firm, P&ID, walks into Nigeria, signs a contract with NNPC and Petroleum Ministry officials to turn wet gas into dry gas for Nigeria's power grid. Walks out in 2012 claiming the NNPC did not meet up with its side of the agreement and heads to arbitration tribunal in London where it got almost $6.6 billion windfall.

Questions are now being asked as to the basis of the contract which is subject matter of the litigation by P&ID. Can civil servants without authority sign contracts ousting the jurisdiction of Nigerian courts for arbitration processes? Was the obviously illegal fraudulent contract with NNPC approved by Nigeria's Federal Executive Council? Did it have the authority of the Attorney General? On what basis are British arbitrators awarding such a colossal sum as judgment debt and further affirming it by a British court when no money was spent or investment made by the British Firm?

According to analysts, "the judgement debt and interest is one fleece gone too far and is substantially unfair to Nigeria and Nigerians as a whole. It is way more than the entire capital budget of the federal government; enough to build hundreds of hospitals and schools across Nigeria, now being awarded by a British Court to two brief case carrying British businessmen who did nothing and invested nothing."

The question being asked is on what basis was the decision by the jurist, given that the firm (P&ID) never commenced the construction of the project facility for which it claimed about $40 million in preliminary expenses?

Besides, the firm's claims in the arbitration proceedings were mainly for loss of profit for the entire 20-year term of the GSPA.

Initially, the firm was claiming the sum of US$1.9 billion but increased it to $5.9 billion, in a desperate bid to reap hugely from a job not done.

In the unfair arbitration award against Nigeria, the tribunal decided that the project would operate at 93% uptime during the 20 year of the GSPA despite the well-known risks of operating such a project in the Niger-Delta.

This apparent miscarriage of justice in the decision of the tribunal to the effect that the average price of Natural Gas Liquids (the main revenue earner for P&ID assuming the GSPA had been implemented), should be based on an average oil price in excess of $100 per barrel over the twenty-year life of the project when oil prices went below $40 after the contract and is now hovering around $60 clearly shows the UK courts are abetting fraud against the people of Nigeria.

Judicial experts also picked holes in the tribunal decision to apply a discount rate to P&ID's supposed lost profits of 2.65%, the same interest rate paid on United States treasury notes thereby adjudging P&ID, a start-up company that never commenced any physical work on the project but planned to operate in the midst of the Niger-Delta crisis, using a novel and unproven technology, a virtually "risk free" investment.

Despite evidence that P&ID did not execute the gas deal, the tribunal on July 17, 2015 issued a second Part Final Award in a liability award and unanimously decided that the Federal Republic of Nigeria (FRN) had repudiated (refused to perform the duty or obligation owed to the P&ID) in line with the GSPA by failure to perform its obligations.

It also declared that P&ID was entitled to damages, in an amount to be assessed, for the repudiation of the GSPA.

The court yesterday indicated that it would make an order enforcing the Final Award in the same manner as a judgment or order of this Court to the same effect as sought by the gas firm. It is not clear what the Buhari Administration will do.

Many are urging the federal government to either go to court in Nigeria and or appropriate any British Assets in Nigeria, should any Nigerian asset be put at risk in the UK, just the same the Iranians seized a British Ship when an Iranian ship was held off the coast of G

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