The Nigerian Government has won its case against Process & Industrial Developments (P&ID) Limited, which sought enforcement of $11 billion debt in its favour some years back. The victory for the Federal Government came after a tuff legal battle with the company after it threatens to seize Nigerian properties abroad to recoup its money. In a remarkable judgement today, A UK court quashed the enforcement of the judgment on the grounds that the contract was obtained in a fraudulent manner.
The presiding judge, Robin Knowles, the Justice of the Commercial Courts of England and Wales, in his ruling upheld that Nigeria’s prayer that the judgment should be quashed was granted.
The Nigeria federal government had argued that it was a victim of bribery and deception in the whole of the controversial gas deal.
The company P&ID had sometimes back in January 2010 signed a gas supply and processing agreement with the Ministry of Petroleum Resources on behalf of the Nigerian government which the Nigerian government insisted was shrouded in a skewed way.
Accordingly, under the terms of the said agreement, the company P&ID was to build and operate an Accelerated Gas Development project to be situated at Adiabo in Odukpani Local Government Area of Cross River State,
Nigeria. The Nigerian government was to source natural gas from oil mining leases (OMLs) 123 and 67 operated by Addax Petroleum and supply to P&ID to refine into fuel suitable for power generation in the country.
However, P&ID claimed that after signing the agreement, the Nigerian government renege on its side of the obligation after negotiations were opened with the Cross River State government for allocation of land for the project.
P & ID alleged that failure by the Nigerian government to construct the pipeline system to supply the gas frustrated the whole gas project, thereby depriving it of the potential benefits from over 20 years’ worth of gas supplies.
It further disclosed that all attempts to negotiate an out-of-court settlement with the Nigerian government proved abortive.
In August 2012, P&ID served the Nigerian government a Request for Arbitration but Nigeria government argued before the tribunal that “the failure of P&ID to acquire the site and build Gas Processing Facilities was a primary breach of the whole process and that no gas could be delivered until this has been done.”
The tribunal however ruled against the Nigeria’s that obligations under Article 6B were not conditional upon P&ID having constructed the gas processing facilities.
