UK Court awards £20m damages to Nigeria in case with P&ID

The said sum must be paid to Nigeria in the next 28 days.

The award of the £20 million as damages was disclosed during a consequential ruling on the matter that took place in London, yesterday, to find out what next after the October ruling.

Yesterday’s hearing was also to find out if P&ID would be given permission to appeal the case.

“The court refused to grant P&ID permission to take the matter back to arbitration, saying that the company’s conduct during the process was reprehensible and therefore it completely set aside the $11 billion judgment.

“Nigeria was seeking at least £20 million back from P&ID to cover its damages and legal fees. Essentially, what P&ID lawyers were trying to do was to try and limit the amount it would pay to Nigeria as damages and they fought hard to see if it would be in naira.

“But the court ruled that they must pay £20 million to Nigeria and it must come in 28 days. Then came the request for appeal. Their request for appeal on the currency at which they were going to pay Nigeria was also denied. So, in 28 days, P&ID must pay Nigeria at least 20 million pounds.”

Nigeria had in October, received great relief as the UK court set the country from its entanglement in the $11bn judgment debt previously awarded in favour of P&ID Limited.

In a judgment delivered by Justice Robin Knowles of the Commercial Courts of England and Wales, in the case between the Federal Government of Nigeria and P&ID, the court had upheld Nigeria’s prayer that the gas processing contract was obtained by fraud.

In the judgment delivered after five years of legal battle, Judge Knowles had said: “In the circumstances and the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68. I have not accepted all of Nigeria’s allegations. But the awards were obtained by fraud and the awards were and the way in which they were procured was contrary to public policy.

“What happened in this case is very serious indeed, and it is important that Section 68 has been available to maintain the rule of law.
Citing Section 68 (3), Judge Knowles said: “ ‘(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may – (a) remit the award to the tribunal, in  whole or in part, or (c) declare the award to be of no effect, in the whole or in part. The court shall not exercise its power to set  aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.’

“I was asked by Lord Wolfson KC in closing that should my judgment conclude in favour of Nigeria, as it does, to leave over the question of the order the court should make so that the parties have the opportunity to present argument once they have considered the judgment. I respect and will hear that argument as soon as that can be arranged.”

Recall that P&ID had agreed with Nigeria in 2010 to build a gas processing plant in Calabar, Cross River State, but the company said the deal collapsed because the Nigerian government did not fulfil its end of the bargain.

Claiming Nigeria breached the terms of the contract, P&ID took a legal recourse and secured an arbitral award against the country.