Abubakar Malami (SAN). Image credit: Channels TV

Attorney-General of the Federation and Minister of Justice, Abubakar Malami (SAN), said that the liability of $9.16bn awarded in Process and Industrial Developments Limited’s favour by a British court can no longer be enforced.

Concise News had reported that the British court in August 2019 affirmed the arbitral award of $9.6bn against Nigeria for alleged breach of a Gas Supply Project Contract reached between the Federal Government and P&ID in 2010.

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The Federal Government alleged that the contract was rooted in fraud and subsequently instituted charges against the company, which was incorporated in British Virgin Island, and its Nigerian affiliate, P&ID Nigeria Limited.

However, on Thursday, the Federal High Court sitting in Abuja presided over by Justice Nyang Ekwo convicted the companies after their representatives pleaded not guilty to the charges.

The judge also ordered the winding up of the companies and the forfeiture of their assets to the Federal Government.

Speaking to reporters, Malami said the judgment was a judicial proof that the contract leading to the &9.6bn verdict against Nigeria was fraudulent.

He said Nigeria would meet with its legal consortium early next week in the United Kingdom in preparation for the case listed for September 26.

He said: “The implication of today’s conviction is that Nigeria has a judicial proof of fraud and corruption as a foundation of the relationship that gave rise to a purported liability in the arbitral award.

“A liability that is rooted in fraud and corruption cannot stand judicial enforceability. Nigeria now has a cogent ground for setting aside the liability.

“Nigeria is meeting with is legal consortium early next week in the UK in preparation for the case listed for September 26.

The Agreement

The EFCC commenced an investigation into the contract between Nigeria and P&ID following a British court ruling that Nigeria owed the Irish firm about $9 billion for violating terms of the contract.

The contract for gas supply and processing (GSPA) was signed by the administration of late President Umaru Yar’Adua and P&ID.

The company was to build gas processing facilities around Calabar, Cross River State, and the government was to supply wet gas up to 400 million standard cubic feet per day. The agreement defined wet gas as “associated gas removed, during oil production, having a propane content of not less than 3.5 mol percent and a butane content of not less than 1.8 mol content, compressed and delivered via pipeline to the site.”

In turn, the company “shall operate and maintain the GPFs (gas processing facilities) on a professional basis to ensure a regular supply of Lean Gas (approximately 340 MMSCuFD) for power generation.” Lean gas, defined as “pipeline quality gas having a composition of not less than 95 mol percent of methane and ethane,” was what the government was to take after supplying wet gas for processing by the company.

It was earlier reported how the agreement was designed to fail as key elements necessary for its success was missing.

A three-member arbitration panel that reviewed the contract had ruled against Nigeria and ordered the government to pay the firm $6.6 billion as damages.

A British court last month ruled against Nigeria’s objection to the 2017 arbitration.

The money with interest has now accumulated to about $9 billion (approximately N3.24 trillion), over one-third of Nigeria’s 2019 budget.

The judgment was delivered by Justice Butcher of The High Court of Justice, Business and Property Courts of England and Wales.

Nigeria has since condemned the ruling and said it suspects that various officials involved in the negotiations did so for pecuniary reasons.

Thursday’s ruling is expected to give Nigeria a stronger bargaining chip in any negotiations with P&ID or in any related trial outside Nigeria.