The Nigerian government on Tuesday said it would seek for a stay of execution, defending its rights, while taking the necessary steps to appeal the decision of a British court which ordered Nigeria to pay over 9 billion U.S. dollars in assets to a small private company.
On August 16, the Commercial Court in London had authorized the firm, Process and Industrial Developments Ltd. (P&ID), to seize exactly 9.6 billion dollars in Nigerian assets over a contract earlier entered into by the company and the federal ministry of petroleum resources of Nigeria in 2010.
In the contractual terms, the international firm was to build a state-of-the-art natural gas plant in Nigeria to power its national grid but the deal collapsed two years later.
The P&ID thereafter sued the Nigerian government claiming it had accrued interest of 1.2 million dollars, for failing to provide the gas or install the pipelines it had promised to build.
However, at a press conference in the Nigerian capital, Abuja, the government described the contract as “botched”, saying in the 20-year Gas Supply Processing Agreement (GSPA) purportedly entered into with the P&ID in 2010, the company never performed as agreed.
In this light, the Nigerian government said it has launched an investigation, with serious concerns, into the underhanded manner in which the contract was negotiated and signed.
“Indications are that the whole process was carried out by some vested interests in the past administration, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people,” said Lai Mohammed, the minister of information and culture.
Before the court ruling in mid-August, the case went to arbitration. The Nigerian government said the firm’s claim in the arbitration proceedings was mainly for the loss of profit for the 20-year term of the GSPA.
In an interim award at the time, the arbitration tribunal ruled that Nigeria had breached the contract. Nigeria said that British courts did not have the authority to rule on the dispute, and arguing that the “seat of the arbitration was Nigeria,” as the original deal was made under Nigerian laws. The arbitration tribunal, however, ignored this decision.
Consequently, on January 31, 2017, the tribunal rendered its final award against Nigeria in the sum of 6.597 billion dollars, together with pre-award interest at the rate of 7 percent per annum, effective from March 20, 2013, and post-award interest at the same rate from the date of the award. This interest increased the size of the award by the British court to 9.6 billion dollars.
“After the arbitration award in 2017, Nigeria made several attempts to negotiate the award and resolve the whole issue amicably with P&ID but to no avail, which eventually led to the enforcement proceedings instituted, simultaneously, by the company in the UK and the U.S.,” said Mohammed, as the government’s spokesman.
He said while challenging the award, the Nigerian government had realized through experts’ opinions that the damages against Nigeria were “clearly unreasonable and manifestly excessive and exorbitant; went far beyond any legitimate protection of the commercial interests of the P&ID; were completely wrong and obviously unjustifiable; and that the damages overcompensated P&ID on a frankly gargantuan scale and imposed a punitive award on Nigeria.”
The court has recognized the award and given the company the authorization to seize Nigeria’s assets.
“Despite the recent recognition of the award by a UK court, and contrary to some reports, Nigeria is not about to lose any of its assets to P&ID,” the official added.
by Olatunji Saliu