Nigeria has won its appeal to overturn a $11bn damages bill in a controversial deal with P&ID in London.
P&ID, a little-known British Virgin Islands-based company, was awarded a contract in 2010 to construct and operate a gas processing plant in the Odukpani Local Government Area of Cross River State in Nigeria. The company signed a processing agreement with the Nigerian Ministry of Petroleum Resources under which it would refine natural gas provided by the Nigerian Government into fuel suitable for power generation.
However, P&ID claimed that after signing the agreement the Nigerian Government reneged on its obligation to provide the natural gas after negotiations were opened with the Cross River State Government for the allocation of land for the project. P&ID attempted to settle with the government out of court but this fell through and hence legal action was sought.
In 2017, a tribunal ordered Nigeria to pay $6.6bn to P&ID as the government was alleged to have failed to fulfil its obligations under the contract. By March 2023, the award had ballooned to $11bn with interest.
Nevertheless, in a judgement on Monday, the UK Commercial Court held that the process through which P&ID secured the contract was fraudulent. Justice Robert Knowles, who delivered the judgement, said: “The awards were obtained by fraud and the awards were and the way in which they were procured was contrary to public opinion.”
Nigeria will now not have to pay the $11bn arbitration fee. President Bola Ahmed Tinubu commented on the ruling, saying: “Today’s victory is not for Nigeria alone. It is a victory for our long-exploited continent and for the developing world at large.”