Justice Robin Knowles of the Commercial Courts of England and Wales, UK, has ruled in favor of Nigeria in the enforcement of an $11 billion arbitration award against Process & Industrial Developments (P&ID) Limited.
In January 2010, P&ID signed a Gas Supply and Processing Agreement (GSPA) with Nigeria to establish a processing plant in Calabar, the capital of Cross River State. However, this agreement never materialized. Subsequently, P&ID sought $5.96 billion in compensation from Nigeria, leading to arbitration proceedings against the country at the London Court of International Arbitration.
In January 2017, the arbitration found Nigeria in breach of the contract and ordered the country to pay P&ID $6.6 billion, with interest commencing from May 2013. By the time of the verdict, the interest, fixed at seven percent ($1 million daily), had accumulated to over $11 billion. Nigeria, in response, filed an appeal against the enforcement of the award, and the court granted the requested relief in September 2020. Nigerian legal representatives argued that there was substantial evidence to suggest that both the contract and the arbitration award were obtained through fraudulent means.
The Nigerian defense counsel urged the court to set aside the arbitration award, especially since some individuals involved in the case were facing trial for money laundering and corruption.
In his ruling on Monday, October 23, Justice Knowles not only concurred that the arbitration awards were obtained through fraudulent means but also that the manner in which they were obtained violated public policy.
Justice Knowles stated, “In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds in its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the Awards were obtained by fraud, and the manner in which they were procured was contrary to public policy.”
He continued, “What transpired in this case is indeed very serious, and it is crucial that section 68 was available to uphold the rule of law. Section 68 (3) provides a range of actions the court may take when there is evidence of a significant irregularity affecting the tribunal, proceedings, or the award, including remitting the award to the tribunal for reconsideration, setting aside the award in part or in whole, or declaring the award to be of no effect, in part or in whole. The court will not exercise its power to set aside or declare an award to be of no effect, in part or in whole unless it is convinced that remitting the matters in question to the tribunal for reconsideration would be inappropriate.”
