In 2023, Nigeria was tethering over the cliff of bankruptcy when a British Virgin Islands registered company Process and Industrial Developments, P&ID desperately pursued the enforcement of an $11 billion arbitration award against Nigeria over a failed gas processing contract.
The gas supply and processing agreement, GSPA for the construction of a processing plant in Calabar, Cross River State began with a Memorandum of Understanding, MOU signed in July 22, 2009 by then Minister of Petroleum Rilwanu Lukman (now late) and witnessed by the director of legal in the ministry, Grace Taiga. The chairman of P&ID, Michael Quinn (now late) signed for his company with the commercial director, Muhammad Kuchazi as witness. The MOU was followed by a formal agreement on January 11, 2010
The deal however did not sail through. Nigeria later alleged that the entire venture was steeped in fraud and the agreements consummated under dubious circumstances. But for P&ID, Africa’s biggest gas nation was guilty of contract breach.
The company later dragged Nigeria to the United Kingdom where it commenced arbitration proceedings before the London Court of International Arbitration, demanding $5.96 billion in compensation. In July 2015, the arbitration tribunal agreed with P&ID that Nigeria had indeed breached the terms of contract and in January 2017, asked Nigeria to pay the sum of $6.7 billion including interest. Armed with the award, P&ID began moves towards enforcement, setting into motion a complex legal process by Nigeria to extricate itself from possible sovereign insolvency.
By 2023, the award and accumulated interests had risen to $11 billion. But for Nigeria to get itself out of financial sanctions, it had to adduce evidence to prove that the P&ID deal itself was fraught with fraud.
In 2019, a criminal complaint was filed before Justice Inyang Ekwo, of the Federal High Court in Abuja wherein P&ID incorporated in the British Virgin Islands and P&ID Nigeria limited were charged with 11 counts of fraud, false representation, felony, tax evasion and criminal concealment of funds.
The former through its commercial director, Muhammad Kachuzi pleaded guilty to 10 out of the 11 counts while the latter represented by its director, Adamu Usman pleaded guilty to the entire counts.
While delivering his judgment, Justice Ekwo noted the flagrant abuse committed by the company which, as revealed by the investigators, showed that P&ID did not get a Certificate of No Objection from the Bureau of Public Enterprises, BPE for the purpose of the said contract. It was also revealed that P&ID made “a little above N3, 000,000.00 tax payment”, effectively undercutting the Nigerian government of N10, 000,000.00 in tax liabilities.
The company had also failed to make a declaration of its activities to the Special Control Unit against Money Laundering, as legally required. Justice Ekwo concluded that there was overwhelming evidence leading to his conviction of both the foreign and locally registered P&ID. While the details of the proof of evidence revealed gross abuse of office and economic sabotage, it took the unwavering stance of the presiding judge to make it happen.
Significantly, it was learnt that those behind the controversial P&ID deal were desperate to bribe their way through with anyone who stood in the way of them securing the billion dollars award. As it turned out, it was Justice Ekwo’s judgement convicting P&ID that the Ngerian government eventually filed before Justice Ross Cranston of the Business and Property Courts of England and Wales to suspend the enforcement of the arbitration award.
Justice Ekwo’s judgement was also tendered at the substantive hearing to set aside the arbitration award before Justice Robin Knowles in 2023 wherein Nigeria used it as evidence that the P&ID GSPA deal was contracted fraudulently.
Consequently, by October of the same year, the British court ruled that the arbitration award was obtained through fraud, effectively loosening the chokehold on a country already battling serious financial crisis.
In July 2024, the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi disclosed that Nigeria has moved beyond setting aside the $11 billion arbitration award, to obtaining an order from a United Kingdom Court of Appeal for its P&ID post judgement costs to be paid in British pounds sterling.
A statement from his office read, “the United Kingdom Court of Appeal validated Nigeria’s claim for the post-judgement costs to be paid in Pound Sterling (GBP), which P&ID tried to reduce drastically by claiming the Nigeria should only be entitled to recover costs in Naira, which evidently will produce lower cost.
“This was another misconceived and desperate attempt by fraudsters to deprive the Nigerian people of hard-earned public revenue. As a government, we are very determined to recover these costs and make P&ID and its US funders pay for their scam so as to serve as deterrence to others of their ilk”