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PREVIEW
President Tinubu says judgement was a blow against economic malpractice and the exploitation of Africa
The end of the $11 billion failed gas project case against the Nigerian government is in sight after London High Court Judge Robin Knowles ruled on 23 October that claimants, Process & Industrial Development, had acted fraudulently.
Judge Knowles found that P&ID had paid bribes to a Nigerian oil industry official linked to the project to build a gas processing plant in Cross River State first mooted in 2010 (AC Vol 61 No 11, The $10 billion gas plant that never was).
That unpicks P&ID's claim of over $11bn against Nigeria which was based on a decision by an arbitration panel in London which in 2017 had awarded the company $6.6bn for lost profits after it asserted that Nigeria had reneged on its obligations in the project (AC Vol 61 No 15, Fight in the last chance saloon).
The panel added that Nigeria would be liable for interest payments on the sum awarded, bringing the total claimed by P&ID to over $11bn this month.
The next stage in the case is for the Court to consider cancelling the award – completely or in part. Nigeria wants the whole award cancelled and may seek damages from P&ID for the financial costs resulting from the action – such as raising the cost of Nigeria's borrowing or undermining its investment prospects. And Nigeria will certainly seek the payment of its legal costs – amounting to tens of millions of dollars – from P&ID.
Judge Knowles concluded on 23 October that the gas deal between P&ID and the Nigerian petroleum ministry was 'obtained by fraud' and 'procured … contrary to public policy.'
'This case has also, sadly, brought together a combination of examples of what some individuals will do for money. Driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others,' Knowles added.
President Bola Ahmed Tinubu and his predecessor Muhammadu Buhari had refused to settle the case out of court. Defeat would have put the government on the hook for a third of its current foreign exchange reserves (AC Vol 64 No 12, Tinubu tries shock therapy on sluggish economy & Vol 64 No 16, Amid protests over spiralling prices, Tinubu names new team).
The ruling that P&ID's claim was fraudulent will embarrass Britain's former Home Secretary Priti Patel who had argued in an opinion column that Nigeria has an obligation to pay P&ID's claim if it wanted to be seen a country embracing the rule of law and safe destination for international investors. To date Patel has declined to comment on her support for P&ID and her public endorsement of a company judged guilty of corruption in the London High Court.
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