The Business and Property Court in London has ruled in favor of the Nigerian government against Process & Industrial Developments (P&ID) Ltd in a $11 billion lawsuit. The judgment, delivered by Judge Robin Knowles, marks a reversal of the previous $11 billion damages ruling against Nigeria. The federal government argued that the initiation of the gas processing project was tainted by a widespread bribery scheme.
The dispute dates back to 2010 when P&ID secured a 20-year contract to construct and operate a gas processing facility in Nigeria’s southern region. The project was intended to build a gas processing plant in Calabar, Cross River state. However, P&ID claimed that the Nigerian government failed to fulfill its obligations under the contract, leading to its collapse.
Accusing Nigeria of breaching the contract, P&ID initiated legal proceedings and ultimately won an arbitration award against the country. The tribunal’s ruling on January 31, 2017, required Nigeria to pay P&ID $6.6 billion in damages, along with pre-and post-judgment interest at a rate of 7%.
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In September 2020, Ross Cranston, a judge within the Business and Property Courts of England and Wales, approved the application. However, during the legal proceedings, the Nigerian government’s legal representatives alleged that P&ID executives had engaged in bribery to secure the contract. P&ID strongly denied these allegations, describing them as “unfounded allegations and unsubstantiated conspiracy theories.”
The recent court trial in March saw Nigeria contend that the contract had been obtained through fraudulent means involving bribery and perjury. They argued that the arbitration award, which had now escalated to $11 billion due to accrued interest, should be invalidated.
Judge Robin Knowles, presiding in a UK court, ruled in favor of Nigeria, stating, “I have not accepted all of Nigeria’s allegations. However, the arbitration awards were obtained by fraud, and the way in which they were procured was contrary to public policy.”
This legal victory represents a significant development in the long-standing dispute between Nigeria and P&ID and may have broader implications for international contractual agreements and arbitration awards. Nigeria’s successful challenge to the arbitration award sends a strong message about the importance of transparency and adherence to legal standards in international business dealings.
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