P&ID: Court didn’t consider FG’S fraud allegations, says UK judge

Indications have emerged that Nigeria’s plans to have the $9.6bn
awarded in favour of Process and Industrial Developments nullified
on the grounds of the allegation of fraud regarding the Gas Supply
Processing Agreement may fail.

This emerged from the September 26 ruling of the London
Commercial Court.

The court in its ruling granted Nigeria leave to appeal against
the enforcement of the $9.6bn arbitration award.

It also granted Nigeria a conditional stay of execution of the
enforcement of the award anchored on Nigeria’s payment of $200m
into the court’s account within 60 days and £250,000 as costs to
P&ID within 14 days.

But the court said it did not consider Nigeria’s allegations of
fraud and tax evasion in the GSPA in granting the stay and leave to
appeal.

Many local and international media platforms only reported the
most important decisions reached by the court at the September 26
proceedings, but a copy of the full ruling was seen on Saturday by
Sunday PUNCH.

Justice Christopher Butcher’s September 26 ruling highlighting
the grounds upon which Nigeria could file an appeal to challenge
the $9.6bn award noted that the allegation of fraud by Nigeria was
never raised in the proceedings leading to his August 16, 2019
judgment in which he affirmed the award as earlier issued a
London-based arbitration panel on January 31, 2017.

“I should state expressly that there has been some mention
before me of there being an investigation conducted by Nigeria into
the award of the GSPA and related matters,” Justice Butcher said in
the September 26 ruling.

He said the allegation played no role in arriving at the
decision to allow Nigeria to appeal against the award.

He added, “There is a suggestion that there may have been some
sort of fraud, conspiracy or tax evasion.

“Those were not grounds which were relied upon before me at the
hearing in June as reasons why the Final Award should not be
enforced.

“They are not relied upon now as reasons for the grant of
permission to appeal nor as grounds of appeal.”

The judge concluded on the subject of fraud, “Those allegations
have accordingly played no part in my decision in relation to
permission to appeal.”

The Attorney General of the Federation, Abubakar Malami (SAN),
had said Nigeria would rely on the established case of fraud in the
GSPA in setting aside the $9.6bn award.

He had said the Federal Government would rely on the outcome of
an investigation conducted by the Economic and Financial Crimes
Commission into the alleged fraud in the GSPA and the recent
conviction of P&ID Limited incorporated in the British Virgin
Island and its Nigerian affiliate by the Federal High Court in
Abuja on various fraudulent conducts leading to the contract.

The award arose from a dispute concerning a 20-year GSPA signed
in 2010 between P&ID and Nigeria through the Ministry of
Petroleum Resources.

Under the agreement, the firm was to build in Niger Delta a gas
processing plant for the refining of natural gas, also known as
“wet gas” into “lean gas” which would be used by Nigeria to
generate electricity.

The two parties subsequently approached an arbitration tribunal
in London which on January 31, 2017 issued a final award of $6.56bn
damages with accumulated interest worth over $9.6bn in favour of
P&ID.

P&ID subsequently approached the London court to enforce the
final award as a judgment or order of the court.

In its judgment delivered on August 16, 2019, the London court
adopted the award issued in favour of P&ID.

Nigeria’s lead counsel at the court, Harry Matovu, a Queen’s
Counsel, highlighted the most important aspect of the September 26
ruling of the court in an article published on the website of his
Brick Court Chambers on September 30.

He repeated the aspect of the ruling which said Nigeria “had a
real prospect of success on appeal”.

During the week, the Minister of Information and Culture, Lai
Mohammed, also expressed optimism that the Federal Government had a
good case, saying, “The P&ID never kick-started the
construction of the project facility, despite its claim to have
invested $40m in Nigeria. It also never acquired any land to build
the gas processing plant.”