A UK judge, Justice Robin Knowles of the Commercial Courts of England and Wales has ruled in favour of Nigeria in the enforcement of a $11bn arbitration award against Process & Industrial Developments (P&ID) Limited.
In January 2010, the P&ID signed a Gas Supply and Processing Agreement (GSPA) with Nigeria to develop a processing plant in Calabar, the Cross River State capital but the deal never materialized.
The company went to court seeking a $5.96bn compensation from Nigeria with arbitration proceedings against the country at the London Court of International Arbitration.
In January 2017, the arbitration said Nigeria breached the contract and ordered the country to pay the company $6.6bn with interest starting from May 2013. Before the verdict, the interest fixed at seven percent ($1m daily) had accumulated to over $11bn.
Nigeria responding, filed an appeal against the enforcement of the award and the court granted the relief sought by the country in September 2020. The lawyers for Nigeria argued that there was enough evidence that the contract and the arbitration award were procured through fraudulent means.
The Nigerian defense counsel urged the court to set the arbitration award aside, as some individuals in the case were being tried for money laundering and graft.
In his ruling on Monday, October 23,, Justice Knowles not only agreed that the arbitration awards were obtained by fraud but also that the manner that they were procured were contrary to public policy.
“In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the Awards were obtained by fraud and the Awards were and the way in which they were procured was contrary to public policy,” Justice Knowles ruled.
He said, “What happened in this case is very serious indeed, and it is important that section 68 has been available to maintain the rule of law.
576. Section 68 (3) provides:
“(3) If there is shown to be serious irregularity affecting the tribunal, the
proceedings or the award, the court may—
“(a) remit the award to the tribunal, in whole or in part, for reconsideration,
“(b) set the award aside in whole or in part, or
“(c) declare the award to be of no effect, in whole or in part.
“The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.
Share this story to friends“I was asked by Lord Wolfson KC in closing that should my judgment conclude in favour of Nigeria, as it does, to leave over the question of the order the Court should make so that the parties have the opportunity to present argument once they have considered the judgment. I respect that request and will hear that argument as soon as that can be arranged.”
