Business

Nigeria forfeits N3.2 assets to British firm over failure to honour contract

Nigeria forfeits N3.2 assets to British firm over failure to honour contract

The Nigerian government’s failure to honour a contract is going to cost her N3.2 trillion ($9 billion) in assets to a company Process & Industrial Development Limited (P&ID). 

The High Court of Justice, Business and Property Courts of England and Wales presided by Justice Butcher of ruled on the case on Friday, two years after the Nigerian government objected to an arbitration that ordered payment of $6.6 billion as damages to the company.

 The money, however, increased to $9 billion (approximately N3.24 trillion) in accumulated interest in 2019. 

P&ID has reportedly indicated its intention to target Nigerian assets in order to satisfy the judgement. It sued the Nigerian government and secured the monetary award after arbitration by a three-member panel including Nigeria’s former attorney-general, Bayo Ojo. 

The company’s lead counsel, Andrew Stafford said in a statement; 

 “We are pleased that the Court has rejected Nigeria’s objections both to the arbitration process and to the amount of the award and that it will grant permission to P&ID to begin enforcement of the award in the United Kingdom.

“The Court has ruled decisively in P&ID’s favour and has comprehensively rejected Nigeria’s efforts to avoid payment of this award of over $9.6 Billion.

“P&ID is committed to vigorously enforce its rights, and we intend to begin the process of seizing Nigerian assets in order to satisfy this award as soon as possible.

“Process and Industrial Developments Limited (P&ID) is an engineering and project management company founded and led by Brendan Cahill and the late Michael Quinn, who had over 30 years’ experience of project management and execution in Nigeria.

“P&ID and Nigeria entered into a 20-year Agreement – known as the Gas Supply and Processing Agreement (GSPA) – to refine natural gas for Nigeria’s electricity grid. The GSPA would have been very profitable for both P&ID and Nigeria.

“The GSPA failed when the government did not uphold its commitments. In August 2012, after several attempts over two and a half years by P&ID to salvage the agreement, including offers to renegotiate the deal, the company initiated arbitration proceedings.

“The tribunal was organised in London under the rules of the Nigerian Arbitration and Conciliation Act as part of the original contractual agreement between parties.

“In January 2017, the tribunal ruled that Nigeria was liable for $6.6 billion in damages, which by now has increased to well over $9 billion with interest accruing daily.”

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