A court of appeal in the United Kingdom (UK) has dismissed the appeal of Process & Industrial Development (P&ID) on a previous judgment halting the enforcement of its $11 billion award against Nigeria.
In a unanimous decision, Lord Justice Snowden, the lead
judge, permitted P&ID to appeal the judgment but dismissed the appeal.
The two other judges are Lord Justice Fraser and Julian
Flaux.
BACKGROUND
P&ID had entered into a deal in 2010 to build a gas
processing plant in Calabar, Cross River state, but the company said the
agreement collapsed because the Nigerian government did not fulfil its end of
the bargain.
The Nigerian government alleged that the gas deal was a scam
conceived to defraud the country.
But P&ID denied the allegation and accused the Nigerian
government of “false allegations and wild conspiracy theories”.
Consequently, P&ID took legal recourse and secured an
arbitral award against the country.
On January 31, 2017, a tribunal ruled that Nigeria should
pay P&ID $6.6 billion as damages, as well as pre and post-judgment interest
at seven percent, which later amounted to $11 billion.
In October 2023, Robin Knowles, justice of the commercial
courts of England and Wales, halted the enforcement of the award by upholding
Nigeria’s prayer that it was obtained by fraud and in violation of section 68
of the English Arbitration Act 1996.
The judge found that P&ID paid bribes to Nigerian officials involved in the drafting of the gas supply and processing agreement (GSPA) in 2010.
He also found that P&ID was illegally in possession of
Nigeria’s privileged legal documents during the arbitration hearings.
The judge ordered that the company pay £43 million in
compensation to Nigeria as legal fees and disbursements.
THE CONTENTIOUS ISSUES IN THE APPEAL
The judgment of the UK court of appeal was delivered on Friday.
In a copy of the judgment published on the UK judiciary website, one
of the issues raised in the P&ID appeal bordered on whether the lower court
was wrong to order the £43 million legal cost to be paid in British pound
sterling and not in naira.
The company argued that Nigeria funded its legal services by
exchanging naira from its consolidated revenue fund.
“The second issue
(which is only reached if this Court has jurisdiction and grants permission to
appeal) is whether the Judge was right to order P&ID to pay Nigeria’s costs
in sterling,” part of the court judgment reads.
“Although Nigeria was billed by its English lawyers in
sterling and paid them in sterling, P&ID contends that Nigeria funded such
payments by exchanging naira from its consolidated revenue fund, so that the
Costs Order should have been in naira.
“The issue is of some
financial consequence because the naira depreciated significantly against
sterling in the period between Nigeria’s payments to its lawyers and the making
of the Costs Order.
“Nigeria’s legal fees and disbursements are said to have
amounted to around £43 million. P&ID asserts that payment of such fees and
disbursements at the relevant times would have cost Nigeria a total of about 23
billion naira; but if P&ID is required to pay £43 million in costs now,
that could be exchanged by Nigeria at the current rate to about 76 billion
naira.”
Snowden, the lead judge, accepted the arguments of Nigeria
that since the legal cost was paid in sterling, the cost order should be paid
in the same currency.
“In my judgment, therefore, the judge was right to accept
Nigeria’s straightforward submission that because Nigeria had been invoiced and
had incurred its liability to its solicitors in sterling and had paid those
bills in sterling, the court ought to make its Costs Order in sterling,” the
judge ruled.
“I would therefore grant P&ID permission to appeal, but
would dismiss the appeal.”
A copy of the judgment can be downloaded here.
Advertise on NigerianEye.com to reach thousands of our daily users
This comment has been removed by a blog administrator.
ReplyDelete