Indications have emerged that Nigeria’s plans to have the $9.6bn awarded in favour of Process and Industrial Developments nullified on the grounds of the allegation of fraud regarding the Gas Supply Processing Agreement may fail.

This emerged from the September 26 ruling of the London Commercial Court.

The court in its ruling granted Nigeria leave to appeal against the enforcement of the $9.6bn arbitration award.

It also granted Nigeria a conditional stay of execution of the enforcement of the award anchored on Nigeria’s payment of $200m into the court’s account within 60 days and £250,000 as costs to P&ID within 14 days.

But the court said it did not consider Nigeria’s allegations of fraud and tax evasion in the GSPA in granting the stay and leave to appeal.

Many local and international media platforms only reported the most important decisions reached by the court at the September 26 proceedings, but a copy of the full ruling was seen on Saturday by newsmen.

Justice Christopher Butcher’s September 26 ruling highlighting the grounds upon which Nigeria could file an appeal to challenge the $9.6bn award noted that the allegation of fraud by Nigeria was never raised in the proceedings leading to his August 16, 2019 judgment in which he affirmed the award as earlier issued a London-based arbitration panel on January 31, 2017.

“I should state expressly that there has been some mention before me of there being an investigation conducted by Nigeria into the award of the GSPA and related matters,” Justice Butcher said in the September 26 ruling.

He said the allegation played no role in arriving at the decision to allow Nigeria to appeal against the award.

He added, “There is a suggestion that there may have been some sort of fraud, conspiracy or tax evasion.

“Those were not grounds which were relied upon before me at the hearing in June as reasons why the Final Award should not be enforced.

“They are not relied upon now as reasons for the grant of permission to appeal nor as grounds of appeal.”


The judge concluded on the subject of fraud, “Those allegations have accordingly played no part in my decision in relation to permission to appeal.”

The Attorney General of the Federation, Abubakar Malami (SAN), had said Nigeria would rely on the established case of fraud in the GSPA in setting aside the $9.6bn award.

He had said the Federal Government would rely on the outcome of an investigation conducted by the Economic and Financial Crimes Commission into the alleged fraud in the GSPA and the recent conviction of P&ID Limited incorporated in the British Virgin Island and its Nigerian affiliate by the Federal High Court in Abuja on various fraudulent conducts leading to the contract.

The award arose from a dispute concerning a 20-year GSPA signed in 2010 between P&ID and Nigeria through the Ministry of Petroleum Resources.

Under the agreement, the firm was to build in Niger Delta a gas processing plant for the refining of natural gas, also known as “wet gas” into “lean gas” which would be used by Nigeria to generate electricity.

The two parties subsequently approached an arbitration tribunal in London which on January 31, 2017 issued a final award of $6.56bn damages with accumulated interest worth over $9.6bn in favour of P&ID.

P&ID subsequently approached the London court to enforce the final award as a judgment or order of the court.

In its judgment delivered on August 16, 2019, the London court adopted the award issued in favour of P&ID.

Nigeria’s lead counsel at the court, Harry Matovu, a Queen’s Counsel, highlighted the most important aspect of the September 26 ruling of the court in an article published on the website of his Brick Court Chambers on September 30.

He repeated the aspect of the ruling which said Nigeria “had a real prospect of success on appeal”.

During the week, the Minister of Information and Culture, Lai Mohammed, also expressed optimism that the Federal Government had a good case, saying, “The P&ID never kick-started the construction of the project facility, despite its claim to have invested $40m in Nigeria. It also never acquired any land to build the gas processing plant.”

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