London court denies P&ID’s appeal, granting Nigeria another win in the $11bn judgement

The final appeal of the Process and Industrial Development (P&ID) against Nigeria in an arbitration case worth eleven billion dollars has been lost. P&ID attempted to overturn a previous judgement by the London High Court, which had halted the enforcement of damages related to a failed gas processing project.

The High Court had ruled that P&ID, a company based in the British Virgin Islands, had paid bribes to a Nigerian oil ministry official in connection with a gas contract signed in 2010. The court also found that P&ID had failed to disclose this information during the arbitration proceedings.

Judge Robin Knowles, in his ruling, rejected P&ID’s argument that the case should be returned for arbitration and affirmed that the damages award should be completely dismissed.

The judge had previously ruled in favor of Nigeria in the enforcement of an eleven billion dollar arbitration award by Process & Industrial Developments (P&ID) Limited, stating that the award had been obtained through fraud. It was discovered that P&ID had paid bribes to Nigerian officials involved in the drafting of the gas supply and processing agreement in 2010. Additionally, the judge found that P&ID had unlawfully possessed privileged legal documents belonging to Nigeria during the arbitration hearings.

Nigeria had requested the court to set aside the award, citing ongoing trials related to money laundering and corruption involving individuals connected to the case. However, after considering the arguments presented by P&ID’s lawyers, including their claim that the documents found in their possession had no impact on their initial victory in arbitration, the judge refused to grant permission to appeal on Thursday.

P&ID is unable to seek permission from the Court of Appeal.

Background:
In January 2010, P&ID, a company registered in the Virgin Islands and founded by two Irish business partners, entered into a Gas Supply and Processing Agreement (GSPA) with Nigeria to establish a processing plant in Calabar, the capital of Cross River State. However, the agreement failed in August 2012, leading P&ID to initiate arbitration proceedings against Nigeria at the London Court of International Arbitration, seeking $5.96 billion in compensation.

In January 2017, the arbitration tribunal ruled in favor of P&ID, stating that Nigeria had breached the contract and ordered the country to pay the company $6.6 billion, along with interest starting from May 2013. The accumulated interest, fixed at seven percent ($1 million daily), had reached over $11 billion prior to the verdict.

Following this, Nigeria filed an appeal against the enforcement of the award, and in September 2020, the court granted the country’s request. Nigeria argued that there was sufficient evidence to prove that the contract and arbitration award were obtained through fraudulent means. The Nigerian side urged the court to set aside the award, citing ongoing trials related to money laundering and corruption involving individuals connected to the case.

In the judge’s ruling in October, it was not only acknowledged that the arbitration awards were fraudulently obtained, but also that the manner in which they were procured went against public policy.