After over five years of legal fireworks, Nigeria has
finally succeeded in halting the enforcement of the $11 billion arbitration
award in favour of P&ID.
In a judgment delivered by email, Robin Knowles, justice of
the Commercial Courts of England
and Wales, upheld Nigeria’s prayer on the
ground that the award was obtained by fraud.
Having accepted Nigeria’s argument, Knowles will now have to
choose from three options: to return the award to the tribunal, in whole or in
part, for reconsideration; to set the award aside in whole or in part; or to
declare the award to be of no effect, in whole or in part.
He has asked the parties to make their arguments on the next
line of action at a date to be arranged.
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.
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 verdict.
‘AWARDS OBTAINED BY FRAUD’
In making his determination, Knowles said: “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.
“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.
“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.”
NIGERIA’S DEFENCE
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”.
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