Justice Robin Knowles of the Commercial Courts of England and Wales has ruled in favour of Nigeria and quashed the enforcement of the $11 billion arbitration award in favour of Process & Industrial Developments (P&ID) Ltd.
President Bola Tinubu, who applauded the judgement, said the country's victory in court was for the long-exploited African continent.
The judge, in a ruling delivered by email yesterday, upheld Nigeria's prayer on the ground that the ill-fated gas processing contract was obtained by fraud.
Recall that P&ID had entered into an agreement with Nigeria in 2010 to build a gas processing plant in Calabar, Cross River State, but the company said the deal collapsed because the Nigerian government did not fulfil its end of the bargain.
Claiming Nigeria breached the terms of the contract, P&ID took a legal recourse and secured an arbitral award against the country.
However, a private arbitration tribunal had on January 31, 2017, ordered Nigeria to pay $6.6 billion to P&ID plus interest beginning from March 20, 2013.
Following the judgement, Nigeria applied for an extension of time and relief from sanctions.
The application was granted by Judge Ross Cranston of the Business and Property Courts of England and Wales in September 2020.
With the interest rate fixed at seven per cent, amounting to $1 million a day, the potential payment had accumulated to over $11 billion before the verdict.
Nigeria had alleged that the gas deal was a scam conceived to defraud the country. Lawyers representing the federal government told the court that P&ID officials paid bribes to secure the contract.
But P&ID denied the allegation and accused the Nigerian government of "false allegations and wild conspiracy theories"
Tinubu applauds judgement
Reacting to the judgement yesterday, President Bola Tinubu applauded it, describing as victory for Africa.
President Tinubu in a statement issued by his Special Adviser on Media and Publicity, Ajuri Ngelale, said: "This landmark judgment proves conclusively that nation states will no longer be held hostage by economic conspiracies between private firms and solitarily corrupt officials who conspire to extort and indebt the very nations they swear to defend and protect.
"Today's victory is not for Nigeria alone, it is victory for our long exploited continent and for the developing world at large, which has for too long been on the receiving end of unjust economic malpractice and overt exploitation.
"Nigeria is appreciative of the tremendous efforts of the defense team and acknowledges the role of the Federal Ministry of Justice and the Office of the Attorney-General in the process of defending Nigeria's interest in this case," the President stated.
FG rebuffed approaches for settlement --AGF
The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, Monday said that the Robin St John Knowles of the United Kingdom Commercial Court setting aside the arbitral award of $11 billion in favour of Process and Industrial Developments Limited (P&ID) for an alleged breach of a Gas Supply and Processing Agreement (GSPA) has freed assets of Nigeria and its agencies around the world from the risks they had been exposed to.
Fagbemi, who stated this while briefing State House correspondents at the presidential villa in Abuja, said despite dragging government to court for an agreement it purportedly entered into with the ministry of petroleum resources to establish a gas processing plant in Calabar, P&ID never ever secured any land site.
He noted that the UK High Court ruled that Nigeria's challenge to the arbitration award granted against it to an obscure hedge-fund backed BVI shell entity P&ID in 2017 has been successful.
The AGF said: "The Arbitral Award had over the years placed the assets of the FRN and those of its agencies all over the world at the risk of attachment, erosion of foreign reserves and distortion of monetary, fiscal and other policies of government with attendant dire consequences for Nigeria and its people."
According to him this emphasized the need for the federal government to vigorously challenge and resist the enforcement of the award by P&ID.
He pointed out that Monday's judgment found that the award had been obtained by fraud and in a way which was contrary to public policy.
In particular, he added, the Judge concluded that P&ID obtained the award only by "practicing the most severe abuses of the arbitral process."
He further quoted the judge as saying: "That this case has also, sadly, brought together a combination of examples of what some individuals would do for money. Driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm to other."
Fagbemi said for the present administration, "it has been a night of long knives! This success marks the culmination of over a decade of legal action and is not just a victory for the people of Nigeria, but any similar target of corruption and fraud."
He referenced the words of Mark Howard KC, lead counsel for the federal government, which he said, the court endorsed, noting: "P&ID was exactly the type of entity that was prepared to engage in bribery', to achieve its aims - to undermine the administration of justice in Nigeria in the pursuit of, 'riches beyond the dreams of avarice."
Fagbemi posited that the successful result is a decisive victory for the people of Nigeria "who stood to lose over US$11 billion, and for the Nigerian administration which has now reached a milestone in its mission to challenge the scourge of corruption."
He added: "The judgment also serves as a damning indictment of predatory international investors, who should now rightfully be deterred from preying upon Nigeria and other developing nations to satisfy their greed.
"P&ID and its associates both Nigerians and foreigners alike, shamelessly attempted to defraud the country and enrich themselves through sharing the FRN's privileged documents, fraud, bribery and corruption on an industrial scale. Those efforts, which took place over many years, have finally been uncovered for all to see.
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"It is imperative to point out that several agents of P&ID made overtures to the Government for settlement of this case. However, the resolve of the administration of President Bola Ahmed Tinubu not to go hands in gloves with fraudulent counterparties or condone corruption informed the position of the FRN to hold fast to its position not to settle. Indeed, earlier this morning, the President at the opening ceremony of the Nigeria Economic Summit Group, reiterated this cardinal position of his administration.
"History has been made today, as this judgment is no doubt significant in the annals of Nigeria and indeed Africa. This judgment has vindicated the government and should serve as a pointer to others who might be nursing or nurturing any plan to swindle Nigeria.
"The success recorded was as a result of close inter-agency collaboration of the FGN Team comprising the Office of the Honourable Attorney General of the Federation (HAGF)/ Federal Ministry of Justice (FMoJ), Economic & Financial Crimes Commission (EFCC), Nigerian Police Force (NPF), Central bank of Nigeria (CBN), Ministry of Petroleum Resources (MPR), the Nigerian National Petroleum Company Limited (NNPCL) Department of State Security (DSS) and the Nigeria Financial Intelligence Unit (NFIU) ."
He informed that there will be further hearings by the UK court on the heels of the judgment to determine costs payable by P&ID and other matters.
