People, including out-of-work ex-British Cabinet Minister Priti Patel, were queuing up to insist we paid, or risk Nigeria becoming an untrustworthy trade pariah.
Former President Muhammadu Buhari has disclosed that he decided to challenge the verdict of the London arbitration court in the P&ID affair despite pressure from "fixers" for a "quiet settlement".
Mr Buhari said he tasked his former Chief of Staff, Abba Kyari and ex-Attorney-General of the Federal, Abubakar Malami to seek a means to fight the $6.5 billion verdict after the government discovered massive fraud in the gas contract.
Mr Buhari, president from 2015-2023, stated this in a statement he issued on Sunday and titled: "A matter of principle".
The former president said he ignored all the counsels that asked him to settle with the company. He noted that the massive fraud perpetrated by the company helped in making his decision.
"I tasked Abba Kyari, my chief-of-staff and Attorney General of the Federation, Abubakar Malami, with finding a way, even at that late stage and despite so much conflicting advice, to get us a fair hearing. Working with a number of different agencies and senior officials of government, we began to find a huge amount of evidence, not all of which Justice Knowles was to accept," Mr Buhari stated.
Mr Buhari also took a dig at a former UK Home Secretary, Priti Patel, and other people who pressured Nigeria to pay the $6.5 billion.
"A lot of contracts end up in dispute. P&ID won a settlement in 2017 of USD 6 billion, with compound interest. People, including out-of-work ex-British Cabinet Minister Priti Patel, were queuing up to insist we paid, or risk Nigeria becoming an untrustworthy trade pariah," he said.
Ms Patel had in an article written in 2018, flayed Mr Buhari and the Nigerian government for taking steps to appeal the arbitral award.
She had written in the City A.M. that Nigeria cannot continue to flout international law and convention.
Background
The Royal Court of Justice in London, United Kingdom (UK) on Monday, delivered the judgement that saved Nigeria from an $11 billion payment to P&ID, Gas Supply Purchasing Agreement (GSPA) contract.
P&ID had in 2012, accused Nigeria of failing to fulfil its end of the bargain of the Gas Supply Purchasing Agreement (GSPA) contract it entered with the company in 2010.
According to the agreement that was later shown to be controversial, P&ID was to build and operate an Accelerated Gas Development project at Adiabo in the Odukpani Local Government Area of Cross River State while the Nigerian government sources 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.
The Nigerian government has been in a legal battle with P&ID since 2014. In 2015, Goodluck Jonathan's administration reached an agreement with P&ID for the Nigerian government to pay $850 million in an out-of-court settlement.
However, Mr Buhari rejected the out-of-court settlement. In 2017, P&ID won the case and a tribunal ordered Nigeria to pay $6.6 billion to P&ID with an interest that had accumulated to over $11 billion before the latest verdict.
In September 2020, the Nigerian government secured a judgement of a British court to suspend the unfavourable ruling over the scandal, and Justice Robin Knowles on Monday gave a favourable ruling to Nigeria.
Here is Mr Buhari's full statement:
A MATTER OF PRINCIPLE
RARELY in modern times can so few have tried to take so much from so many. If Nigeria had lost its arbitration dispute with Process & Industrial Development in a London court on 23 October, it would have cost our people close to USD 15 billion.
We won, and all decent people can sleep easier as a result. Justice Robin Knowles said Nigeria had been the victim of a monstrous fraud. But it was a close-run thing. As the judge said: "I end the case acutely conscious of how readily the outcome could have been different, and of the enormous resources ultimately required from Nigeria as the successful party to make good its challenge."
But ordinary Nigerians never took the decisions that ended up before Justice Knowles. Had Nigeria lost, it would have required schools not to be built, nurses not to be trained and roads not to be repaired, on an epic scale, to pay a handful of contractors, lawyers and their allies - for a project that never broke ground.
How did it get to this point? How did Nigeria prevail? Was this a one-off, or par for a shabby and distasteful course? What are the lessons for the future?
The 'P&ID Affair' was already firmly set by the time I came into office in 2015. A company registered in the British Virgin Islands that no one had heard of, with hardly any staff or assets, had won a contract to build a gas processing plant in Cross Rivers. The company was owned by Irish intermediaries who knew Nigeria well and had done business in everything from healthcare to fixing tanks.
The previous government could not supply the gas. The plant was never built. Construction was not started. P&ID did not even buy the land for the facility. But the contract, incredibly, was clear: P&ID could sue Nigeria, and claim all the profits it might have made over 20 years as if everything had been completed.
Nigeria was in court in London, trying to talk down liability and costs. Back at home, fixers were looking to work out a quiet settlement. This is often the way. A lot of contracts end up in dispute. P&ID won a settlement in 2017 of USD 6 billion, with compound interest. People, including out-of-work ex-British Cabinet Minister Priti Patel, were queuing up to insist we paid, or risk Nigeria becoming an untrustworthy trade pariah.
It was clear that far from the whole story had been told. I tasked Abba Kyari, my chief-of-staff and Attorney General of the Federation, Abubakar Malami, with finding a way, even at that late stage and despite so much conflicting advice, to get us a fair hearing. Working with a number of different agencies and senior officials of government, we began to find a huge amount of evidence, not all of which Justice Knowles was to accept. But he agreed that P&ID had paid bribes. He agreed that one of P&ID's founders had committed perjury. And he agreed that P&ID had somehow found in its possession a steady supply of Nigeria's privileged internal legal documents, outlining our plans, strategies and problems.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
My own view is that this whole, sorry affair shows how important it is to follow the legal process in resolving a dispute. It shows that given time and opportunity for each side to present their case, the temple of justice can satisfactorily resolve all disputes without resorting to extrajudicial measures. It was definitely worth the struggle: this was an attempted heist of historic proportions, an attempt to steal from the treasury a third of Nigeria's foreign reserves.
But even at this moment, we should note what the English judge cautioned. The arbitration process in London "was a shell that got nowhere near the truth." We need better contracts, in the public and private sectors. And we need greater transparency: the reality is that had P&ID not conjured up quite such an outlandish ransom, they may have found themselves in the same place as the myriad of other invisible contractors who all too often quietly take Nigeria for many millions in out-of-court settlements. Sterner sanctions are indicated for Nigerian public officials who have been proven to connive with foreign criminals to defraud our country.
Nigeria has won this battle with corruption, but the war is far from over. As Justice Knowles concluded: "This case has also, sadly, brought together a combination of examples of what some individuals will do for money. Driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others. Others that in the present case include the people of Nigeria, already let down in so many ways over the history of this matter by a number of individuals in politics and administration whose duty it was to serve them and protect them." Well said.
