Nigeria Gets Extension to Contest $10 Billion P&ID Award
Nigeria Gets Extension to Contest $10 Billion P&ID Award
Nigeria’s government was granted more time by a London judge to challenge an arbitration award worth around $10 billion, more than a quarter of the country’s foreign reserves.
Judge Ross Cranston said in a judgment Friday granting extra time that Nigeria had established a “strong prima facie case of fraud.”
The ruling allows the West African nation to continue to seek to overturn the penalty on the grounds that Process & Industrial Developments Ltd. obtained a gas-supply contract a decade ago and the favorable arbitration decision through fraud. Last year, a British judge upheld the award won in 2017, a ruling Nigeria is also appealing.
Nigeria argued in July that it should be allowed to contest the arbitration panel’s conclusions outside the usual 28-day time limit because evidence of corruption perpetrated by P&ID had only recently been discovered.
The potentially costly crisis for Nigeria stems from a deal struck in 2010 where the government agreed to provide gas to a plant British Virgin Island-registered P&ID proposed to build. The administration of President Muhammadu Buhari now argues the project was a sham designed by the company and corrupt public officials to engineer a successful arbitration claim against the country. Cranston said that, while it was not his responsibility at this stage to “decide whether a fraud took place,” Nigeria should be able to proceed to a full trial to test its accusations against P&ID.
“We are firmly committed to overturning the award, no matter how long it takes,” Abubakar Malami, minister of justice and attorney general of the federation, said in an emailed statement. “This is a major victory in our ongoing fight,” he said, while Buhari expressed his “delight” at the outcome in a statement.
“P&ID welcomes the opportunity to refute Nigeria’s false allegations and wild conspiracy theories at trial,” a spokesman for the company said. P&ID denies allegations of wrongdoing, claiming Nigeria has concocted the claims to avoid its legal obligation to compensate P&ID.
P&ID is also attempting to enforce the arbitration award in the U.S., as it has done in the UK. The Nigerian government has asked the U.S. court to dismiss the company’s petition.
©2020 Bloomberg L.P.