England court rules in favour of Nigeria against P&ID Limited

The company sought a $5.96bn compensation from Nigeria with arbitration proceedings against the country at the London Court of International Arbitration

Justice Robin Knowles of the Commercial Courts of England and Wales has ruled in favour of Nigeria in the enforcement of a $11bn Process & Industrial Developments (P&ID) Limited arbitration award.

With the judgement handed down physically in open court, and electronically by email to the parties on Monday, Nigeria succeeded in stopping the enforcement of the award which was initially in favour of P&ID.

According to the judge, the award against Nigeria by the company was obtained by fraud.

“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.

In January 2010, P&ID, a Virgin Islands-registered company founded by two Irish business partners, 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 failed in August 2012 and the company sought 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.

Subsequently, Nigeria filed an appeal against the enforcement of the award and the court granted the relief sought by the country in September 2020. The Nigerian side argued that there was enough evidence that the contract and the arbitration award were procured by fraud.

The Nigerian side thereby urged the court to set the award aside, saying that some individuals in the case were being tried for money laundering and graft.

In his ruling, the judge 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.

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.

  1. 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.

“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.”

Meanwhile, Justice Knowles absolved a former Lagos State Attorney-General and Commissioner of Justice, Olasupo Shasore, of corruption allegations in the case.

The Federal Government of Nigeria had accused Shasore, who was one of the country’s lawyers in the case, of corruption allegations.

However, in his judgement delivered on Monday, the judge said “Shasore has not, in my judgment, been shown to be corrupt”.

“His (Shasore’s) actions are inconsistent with Nigeria’s theory that he was (corrupt).”

“First, his advice to Nigeria to investigate, and allow expert evidence to be obtained, and to proceed in a timely fashion, was sound and constant.

“Second, he assisted Nigeria to succeed in its applications to the Nigerian Court.

“Third, his participation in the various settlement discussions helped reduce the figures,” Justice Knowles ruled.

“I add that in my view, Nigeria (and specifically Mr (Abubakar) Malami SAN, the (then) Attorney General) did not in truth believe Mr Shasore SAN was corrupt.

“On 21 November 2017 Mr Shasore SAN was engaged by Nigeria to represent the Ministry of Power in a $2.4bn arbitration claim by Sunrise Power and Transmission Co.

“His appointment was approved by Mr Malami SAN on 6 March 2018 and formally confirmed by Mr Malami SAN on 18 March 2018. On 1 September 2021 Mr Malami SAN approved the engagement of Mr Shasore SAN’s firm to act for Nigeria in a second arbitration brought by Sunrise, resulting from Nigeria’s failure to comply with the settlement agreement. The agreed fee was up to US$1.15m.

“Mr Malami SAN has not explained to this Court how these events are consistent with a belief on his and Nigeria’s part that Mr Shasore SAN had been corrupt, in his professional work for Nigeria in the Arbitration against P&ID.”



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