Nigeria, in its case against Process and Industrial Developments (P&ID). has secured a landmark victory in its pursuit to overturn a $10 billion judgement awarded against it.
Nigeria had filed an application for an extension of time and relief from sanctions to adduce new evidence in response to an enforcement application.
Delivering his judgement on Thursday, September 3, 2020, Ross Cranston, a judge of the Business and Property Courts of England and Wales, granted Nigeria’s application for an extension of time and relief from sanctions.
On January 31, 2017, a tribunal had ruled that Nigeria should pay P&ID $6.6 billion as damages, as well as pre- and post-judgment interest at 7 per cent.
The Federal Government had approached the court to establish that the contract was awarded on illegal terms.
Nigeria has been making moves to overturn the judgement and has gotten court clearance to request documents from a P&ID stakeholder and review bank statements of ex-president Goodluck Jonathan, as well as that of former petroleum ministers, Diezani Alison-Madueke and Rilwanu Lukman.
Brief Background of the P&ID Sanction
The defendant, P&ID, was incorporated in the British Virgin Islands on 30th
May 2006 by Michael Quinn and Brendan Cahill, both Irish citizens.
In July 2006 an associated company, Projects & Industrial Developments (Nigeria) Ltd was established, with no assets, only a handful of employees, and was without a website or other presence.
On the 27th of June 2006, P&ID signed an engineering service agreement with General T. Y. Danjuma (retired), a prominent Nigerian
businessman, for the undertaking of what was called Project Alpha.
This followed an engineering service agreement of September 6, 2006, with General Danjuma’s company, Tita-Kuru Petrochemicals Ltd (“Tita-Kuru”).
Project Alpha was meant to be concerned with the design of a polypropylene plant in Badagry, Lagos, South-West Nigeria.
Tita-Kuru, in a letter to the Economic & Financial Crimes Commission (EFCC), dated September 20, 2019, stated that one aspect of the arrangements with P&ID was that it would organise a gas offtake agreement from the Folawiyo gas field at Badagry, but that it later informed them that it was unsuccessful in doing this.
Tita-Kuru added that Mr Quinn of P&ID suggested that the engineering work undertaken could be used for a similar gas stripping plant (GSPA) at Calabar, capital of Cross River State in South-South Nigeria.
Also, the P&ID had also written to the then-President, Yar’Adua, with a formal proposal on 7 August 2008, which Nigeria says is false.
“We are willing to fund, from our own resources, the entire US$700,000,000 for the gas processing facilities on land and we are also willing, if necessary, to
participate in all or part of the financing of the gas gathering offshore portion of the project…” the P&ID wrote in the said letter.
Following Dr Rilwanu Lukman’s appointment as Nigeria’s Minister of
Petroleum Resources in December 2018, meetings reportedly held between P&ID and members of the technical committee of the Ministry, among whose members were Dr M. M. Ibrahim (special senior technical assistant and head of policy at the government’s Oil & Gas Sector Reform Implementation Committee) and Mr Taofiq Tijani.
Between 2010 and 2012, P&ID reportedly wrote letters to the Ministry of Petroleum, the President and NNPC to seek for the implementation of the GSPA.
The GSPA was not implemented prompting the P&ID to send a notice of Arbitration to Nigeria in 2012, to commence proceedings.
The case between Nigeria and the P&ID degenerated to the point where Nigeria was handed a fine of about $10 billion for breaching their supposed agreement.
The current Attorney-General, Abubakar Malami, the EFCC and legal representatives filed a case for an extension of time on grounds that the arbitration clause in the GSPA and the awards were procured as the result of a massive fraud perpetrated by P&ID, and that to deny them the opportunity to challenge the Final Award would involve the English court being used as an unwitting vehicle of the fraud.
The Economic and Financial Crimes Commission (EFCC), had on August 18, 2020, arraigned James Nolan, a Briton, and six companies over their alleged involvement in the contract.
In his judgement on Thursday, September 3, 2020, Ross Cranston wrote:
“The parties have produced a large volume of documents, some thirty-four bundles with hundreds of pages of evidence and thousands of pages of exhibits. It is not my function at this preliminary stage to decide whether a fraud took place. As Butcher J pointed out in ordering the hearing, it would tend to defeat the purposes of the 1996 Act for there to be a substantial investigation of the merits at this stage.
“However, it has been necessary to consider a considerable amount of the material to decide firstly, whether, as Nigeria contended, there is a prima facie case of fraud and how strong that case is, and secondly, the steps Nigeria took to investigate the alleged fraud from late 2015.
“Both matters are relevant to the issues of whether Nigeria’s claim is barred altogether and whether time should be extended in its favour and relief from sanctions granted. Following the hearing, P&ID submitted a Supplementary Note to comment on new evidence which it said had only now come to its attention, in particular, a letter dated 5 June 2020 from Nigeria’s Attorney General and Minister of Justice, Mr Abubakar Malami SAN, to President Buhari.
“P&ID contended that the letter strongly supported the case it advanced at the hearing. On 21 August Nigeria sent a Note in response, together with the eighth witness statement in the proceedings from Mr Malami.”