The Nigerian government on Monday criticised last Friday's ruling by a British court, which gave about $8.9 billion (about N3.2 trillion) arbitral award against Nigeria.
The Central Bank of Nigeria (CBN) said the government would do everything to defend the country and the country's foreign reserves.
The ruling was by the United Kingdom, Business & Property Courts (the Commercial Court) presided by Justice Butcher.
It granted Process & Industrial Development Limited (P&ID) a British engineering firm right to enforce a March 20, 2013 award earlier given against Nigeria by a District Circuit Court in Washington DC.
How the award was arrived at
The initial award was $6.6 billion as damages in favour of P&ID, which accused the Nigerian government of breaching a 2010 gas contract agreement.
The award was handed by a tribunal constituted under the rules of the Arbitration Act 1996 (England and Wales) and the Nigerian Arbitration and Conciliation Act (CAP A18 LFN 2004).
Following Nigeria's refusal to enter appeal for over five years since the ruling was given, the court said initial award rose to about $8.9billion, including an additional $2.3 billion in accumulated interest at 7 per cent rate per annum.
The tribunal said the damages were calculated as the present value of 20-year income, minus certain capital and operating costs incurred from building and running the refining facility.
Friday's award converted the arbitral award into a domestic UK judgment against Nigeria, creating a situation where Nigeria's assets around the world, particularly in the UK and U.S., risk being taken over by P&ID, or its agents.
Following the ruling, P&ID hailed the British Court's ruling as the triumph of the rule of law. The company gave an indication that it would be moving to enforce the judgement.
Nigeria vows to vigorously resist award
But, the Nigerian government, through the Permanent Secretary and Solicitor General of the Federation, Dayo Apata, dismissed the ruling "completely wrong and obviously unjustifiable."
Mr Apata said in a statement in Abuja that the government will vigorously defend Nigeria's rights to protect its people's assets around the world against the enforcement of the judgement.
"Nigeria intends to strongly avail itself of all defences customarily afforded to sovereign states under the United Kingdom Sovereign Immunity Act at any such enforcement actions," Mr Akpata said.
"The damages awarded P&ID are clearly unreasonable and manifestly excessive and exorbitant. The courts went far beyond any legitimate protection of the commercial interests to overcompensate P&ID on a, frankly, gargantuan scale, and impose[d] a punitive award on Nigeria," he added.
He said the federal government has already instructed its counsel to pursue an appeal on the judgement of the English Court to secure a stay of execution, apart from other efforts in the courts of the United States of America to protect Nigeria's interests.
CBN to protect Nigeria's external reserves
On Monday, the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, reaffirmed Nigeria's determination to vehemently resist the ruling.
Mr Emefiele told State House Correspondents in Abuja that the Nigerian government was not scared about any attempt by P&ID to enforce the ruling by ambushing the foreign reserves.
"I am not scared at all," the CBN governor told reporters. "Since the news about the judgement broke out late on Friday, we have been discussing with our counsels, and they have advised that there are sufficient and strong grounds on the basis of which we could file a stay of execution and also an appeal against that judgement.
"There are certain anomalies in the process leading to the award of that contract which are currently being looked into by the EFCC (Economic and Financial Crimes Commission). I believe that the EFCC themselves have their own investigation reports about that."
The CBN governor said the government will aggressively follow through and ensure the execution of that judgement is suspended and the appeal succeeds at every level both within Nigeria and abroad.
He assured Nigerians at home and abroad, local and foreign investors that there was no need to worry about the matter as the government was on top of it.
"We know the implication of that judgement has some impact on monetary policy. That is why the CBN is going to step forward and very strongly too to ensure we defend the country and defend the reserves of the Federal Republic of Nigeria," he said.
How the case began
On January 11, 2010, P&ID signed a gas supply and processing agreement with the Ministry of Petroleum Resources on behalf of the Nigerian government.
Under the terms of the agreement, P&ID was to build and operate an Accelerated Gas Development project to be located at Adiabo in Odukpani Local Government Area of Cross River State.
The federal government was to source for natural gas from oil mining leases (OMLs) 123 and 67 operated by Addax Petroleum and supply to P&ID to refine into fuel suitable for power generation in the country.
Nigeria was expected to supply an initial volume of about 150 million cubic feet of gas per day. Eventually, it was to be ramped up to about 400 million cubic feet per day during the 20-year period.
However, P&ID alleged that after signing the agreement, the Nigerian government reneged on its obligation after negotiations were opened with the Cross River State government for allocation of land for the project.
P&ID said the failure to construct the pipeline system to supply the gas frustrated the construction of the gas project, thereby depriving it of the potential benefits from over 20 years' worth of gas supplies.
The company said attempts to settle out-of-court with the Nigerian government failed.