UK Court Rejects P&ID Appeal, Upholds $43m Award to Nigeria

Nigeria Secures Major Victory as UK Court Upholds $43m Award

Nigeria wins a £43 million award after the UK court dismisses the P&ID appeal...

UK court rules in favor of Nigeria, dismissing P&ID's appeal and upholding £43m award. Nigeria wins major legal battle, avoiding $11bn payout over disputed gas deal.

Process & Industrial Development, P&ID's appeal against a prior ruling that stopped the enforcement of its $11 billion award against Nigeria was rejected by a UK court of appeals.

The senior judge, Lord Justice Snowden, allowed P&ID to appeal the ruling but dismissed the appeal in a unanimous ruling.

The P&ID appeal revolved around a question of whether the lower court erred in directing that the £43 million legal bill be paid in British pounds sterling rather than naira, as stated in a copy of the ruling that was made public on the UK courts website.

A key aspect of P&ID's appeal centered on whether the lower court erred in directing the payment of £43 million in legal costs in British pounds sterling instead of Nigerian naira.

Nigeria exchanged naira from its consolidated revenue fund, according to the corporation, to pay for its legal services.

The second question concerned the Judge's authority to mandate that P&ID reimburse Nigeria's fees in sterling.

"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.

“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 is reported to have spent almost £43 million on legal fees and expenses. According to P&ID, Nigeria would have paid a total of roughly 23 billion naira for these fees and disbursements at the relevant times. However, if P&ID is forced to pay £43 million in charges today, Nigeria could exchange that amount, at the present rate, for almost 76 billion naira.

The lead judge, Snowden, agreed with Nigeria's arguments that the cost order ought to be paid in sterling as well, given that the legal costs were covered by that 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.”

According to the federal authorities, the gas agreement was a hoax intended to deceive the nation.

However, P&ID refuted the claim and charged the Nigerian government with making up stories and fabricating conspiracy theories.

As a result, P&ID filed a lawsuit and won an arbitral judgment against the nation.

Nigeria was ordered by a tribunal on January 31, 2017, to pay P&ID $6.6 billion in damages in addition to seven percent pre- and post-judgment interest, which ultimately came to $11 billion.

P&ID alleged that the reason the arrangement fell through was because the Nigerian government failed to uphold its half of the bargain when it came to building a gas processing plant in Calabar, Cross River state, in 2010.

The implementation of the award was stopped in October 2023 by Robin Knowles, a justice of the commercial courts of England and Wales. Nigeria had prayed that the award was obtained fraudulently and in contravention of section 68 of the English Arbitration Act 1996.

The 2010 gas supply and processing deal was drafted by Nigerian officials, and the judge determined that P&ID had bribed them for their services.

Additionally, he discovered that P&ID had unlawfully obtained Nigeria's confidential legal documents during the arbitration proceedings.

The corporation was ordered by the judge to reimburse Nigeria with £43 million, covering legal fees and disbursements.