On a day its hopes of re-starting arbitration against Nigeria were dashed by a UK court, Process & Industrial Development (P&ID) has applied to appeal the judgement halting the enforcement of its $11 billion award.
On October 23, 2023, Robin Knowles, justice of the Commercial Courts of England and Wales, had halted the enforcement of the award by upholding Nigeria’s prayer that it was obtained by fraud and in violation of section 68 of the English Arbitration Act 1996.
The judge found that P&ID had paid bribes to Nigerian officials involved in the drafting of the gas supply and processing agreement (GSPA) in 2010.
He also found that P&ID was illegally in possession of Nigeria’s privileged legal documents during the arbitration hearings.
However, Knowles said he still had to choose from three options after making his determination: (a) to remit the award to the tribunal, in whole or in part, for reconsideration, (b) to set the award aside in whole or in part, or (c) to declare the award to be of no effect, in whole or in part.
Nigeria had argued that the award should be set aside in its entirety, invoking the common law principle that “fraud unravels all”.
In his final pronouncement on Friday, Knowles said he had decided against sending the award back to the arbitration tribunal. He crushed the award in its entirety.
P&ID is now seeking Knowles’ permission to appeal the October 2023 judgment.
Its lawyers argued at the hearing on Friday that the judge failed to apply a “causation” requirement which would have shown if the arbitration award would still have been made if bribes had not been paid by P&ID to government officials.
They also argued that the privileged documents that were found in P&ID’s possession played no role in its victory at the arbitration.
Knowles has now reserved judgment.
He, however, ordered P&ID to, within 28 days, make an initial payment of £20 million in costs and declined the company’s offer to pay in naira.
‘AWARDS OBTAINED BY FRAUD’
A private arbitration tribunal had on January 31, 2017 ordered Nigeria to pay $6.6 billion to P&ID plus interest beginning from March 20, 2013 for repudiating the GSPA.
With the interest rate fixed at seven percent amounting to $1 million a day, the potential payment had accumulated to over $11 billion before the October verdict.
The tribunal was made up of Lord Hoffmann and Anthony Evans, both retired UK judges, and Bayo Ojo, former attorney general of the federation.
Nigeria had filed an appeal against the enforcement of the arbitration award and the UK commercial court granted the country the relief in September 2020, returning the matter to the high court for trial.
At the two-month trial that took place before Knowles between January and March 2023, the Nigerian legal team argued that there was overwhelming evidence that the contract and the arbitration award had been procured through “an audacious fraud on Nigeria”.
They argued that the award should be set aside, citing the trials and conviction of some of the actors for corruption and money laundering as evidence of graft on an “industrial scale”.
