The Federal Government of Nigeria has won its case against Process & Industrial Developments (P&ID) Limited, which had been pursuing the enforcement of an $11 billion debt in its favor.
This marks the end of a five years intense legal battle between Nigeria and the company.
If lost, Nigeria would have had to pay the company $11 billion (N8.4 trillion) to P&ID Limited.
However, UK court on Monday quashed the enforcement of the judgment on the grounds that it was fraudulently obtained.
Justice Robin Knowles of the Commercial Courts of England and Wales supported Nigeria’s plea to annul the judgment.
The Nigerian government had asserted that it had fallen victim to bribery and deception in the contentious gas deal.
The roots of the P&ID controversy extend back to January 2010 when the company entered into a gas supply and processing agreement with the Ministry of Petroleum Resources on behalf of the Nigerian government.
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According to the terms of this agreement, P&ID was tasked with constructing and operating an Accelerated Gas Development project, to be situated in Adiabo within the Odukpani Local Government Area of Cross River State.
The Nigerian government, on the other hand, was to secure natural gas from oil mining leases (OMLs) 123 and 67, operated by Addax Petroleum, and provide it to P&ID for refinement into fuel suitable for electricity generation within the nation.
Nonetheless, P&ID alleged that after the accord was inked, the Nigerian government failed to fulfill its obligations when it initiated discussions with the Cross River State government regarding land allocation for the project.
According to the company, the absence of a pipeline system to deliver the gas obstructed the construction of the gas project, depriving P&ID of the anticipated benefits from over two decades’ worth of gas supplies.
Efforts to resolve the matter amicably with the Nigerian government proved unfruitful.
In August 2012, P&ID initiated an arbitration request against the Nigerian government.
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In response, Nigeria argued before the tribunal that “the failure of P&ID to secure the site and construct Gas Processing Facilities constituted a fundamental breach, and gas delivery could not commence until this was completed.”
The tribunal ultimately ruled that Nigeria’s obligations, as per Article 6B, were not contingent upon P&ID having already constructed the gas processing facilities.
The court decision marks the conclusion of a prolonged legal battle that has been closely monitored by international observers.
