BREAKING: Good News Hit Nigeria As UK Court Dismisses P&ID Appeal, Upholds £43m Award In Favor Of Nigeria

Good News Hit Nigeria As UK Court Dismisses P&ID Appeal, Upholds £43m Award In Favor Of Nigeria

Written By Oshiobugie John

In a significant legal victory for Nigeria, the UK Court of Appeal has dismissed Process & Industrial Development’s (P&ID) appeal against a previous ruling that halted the enforcement of an $11 billion award in its favor. The court also upheld a £43 million compensation to Nigeria for legal fees and disbursements.

In a unanimous decision led by Lord Justice Snowden, with Lord Justice Fraser and Julian Flaux concurring, the appeal was permitted to proceed but ultimately dismissed.

BACKGROUND

The dispute dates back to a 2010 agreement in which P&ID was to construct a gas processing plant in Calabar, Cross River state. The deal fell through, with P&ID accusing the Nigerian government of failing to meet its obligations, while Nigeria countered that the agreement was a fraudulent scheme to defraud the nation.

P&ID pursued legal action, securing an arbitral award in 2017, which initially mandated Nigeria to pay $6.6 billion in damages plus interest, eventually totaling $11 billion. However, in October 2023, Justice Robin Knowles of the commercial courts of England and Wales ruled in Nigeria’s favor, stating the award was obtained through fraud and violations of the English Arbitration Act 1996. Justice Knowles found evidence of bribes paid to Nigerian officials by P&ID and their illegal possession of privileged legal documents during the arbitration.

As a result, Justice Knowles ordered P&ID to pay Nigeria £43 million in legal costs.

CONTENTIOUS ISSUES IN THE APPEAL

The UK Court of Appeal’s judgment, published on Friday, addressed key issues raised by P&ID, particularly the currency in which the £43 million legal cost should be paid. P&ID argued that since Nigeria funded its legal services by converting naira from its consolidated revenue fund, the costs should be payable in naira, not sterling.

The court found that the naira had depreciated significantly against the sterling during the period between Nigeria’s payments to its lawyers and the issuance of the costs order. P&ID contended that paying £43 million now, as opposed to the 23 billion naira initially spent, would unfairly benefit Nigeria due to the currency exchange rate.

However, Lord Justice Snowden ruled in favor of Nigeria, affirming that since the legal costs were invoiced and paid in sterling, the compensation should likewise be in sterling.

“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,” Snowden stated.

“I would therefore grant P&ID permission to appeal, but would dismiss the appeal.”