In a significant legal development, Nigeria has emerged victorious in its endeavor to challenge an $11 billion damages bill associated with a defunct gas processing project. This was achieved on the grounds of an alleged campaign of bribery.
The dramatic legal saga saw Nigeria facing off against Process & Industrial Developments (P&ID), a British Virgin Islands-based entity. P&ID had instigated arbitration proceedings against Nigeria after the gas project’s collapse.
P&ID had initially secured a 20-year contract in 2010 to construct and operate a gas processing facility in southern Nigeria, as part of an initiative to tap into Nigeria’s abundant gas reserves.
The dispute between the two parties arose when the project failed, leading P&ID to seek arbitration in London. In 2017, P&ID was awarded $6.6 billion for lost profits, an amount that swelled to $11 billion over time, a significant figure that far exceeded Nigeria’s 2019 health budget.
However, Nigeria’s legal team effectively argued that the country had fallen victim to an orchestrated campaign of bribery and deceit by P&ID. They asserted that P&ID had used bribes to secure the contract and had manipulated Nigeria’s legal representation to access confidential documents during the arbitration.
P&ID, in contrast, vehemently denied the allegations of bribery and legal interference. They attributed the project’s failure and Nigeria’s arbitration defeat to institutional incompetence.
The pivotal moment in this legal battle arrived when Judge Robin Knowles, on Monday, issued a written ruling in favor of Nigeria. This decision is a turning point for Nigeria as it seeks to alleviate the substantial financial burden imposed by the collapsed gas deal.
The implications of this ruling extend to the broader realm of international business and arbitration. Nigeria’s legal victory underscores the importance of rigorous legal oversight in complex international contracts and serves as a noteworthy case study for companies involved in global ventures.
Photo ( Opeoluwa Dapo-Thomas)
By: Montel Kamau
Serrari Financial Analyst
24th October, 2023
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