The UK-court judgment against Nigeria raises many questions begging for answers
Wriggling out of the $9.6 billion judgment debt arising from the controversial agreement between Nigeria and a United Kingdom-based natural gas company, Process & Industrial Developments Limited (P&ID) is going to be pretty difficult. From the history of the case, there have been too many missteps and outright irresponsibility. Representatives of the Nigerian government were either not in court when required or refused to follow up on negotiated out of court settlements. If the judgment is executed and the debt is to be paid, the UK firm might walk away with 20 per cent of Nigeria’s external reserves, which stood at $44.425 billion and 2.5 per cent of Nigeria’s Gross Domestic Product (GDP). Were Nigeria to lose that much in return for nothing, the consequences are better imagined.
Sadly, rather than looking for a solution, what we see are cynical attempts to further compound the problem. The arbitration for the Gas Supply and Processing Agreement (GSPA) between P&ID and Nigeria, presided over by some retired English Judges, had a former Attorney General of Nigeria, Mr Bayo Ojo, SAN, as member. The matter also lasted for more than four years. Besides, the appeal at the English Commercial Court involved live testimony and the cross-examination of experts in the oil and gas industry. At every point in this process, it was ruled that Nigeria was liable to the P&ID. That was never contested. The allegation of fraud now being used to explain away the tardiness of our officials was also never raised.
While we therefore wait for the authorities to shed more light on how they intend to resolve the issue with P&ID, many questions continue to agitate the minds. Critical among them are: Why are our officials ever so eager to surrender jurisdiction clause to overseas and by so doing externalise the choice of law in contracts to be executed within our jurisdictions? Is it because the civil servants and public officers involved want to earn estacodes? Or worse still, were these deals done with corrupt motives? Who exactly signed the contract with P&ID? What were the obligations of the parties? What amount of money did the firm invest in Nigeria in furtherance to the contract? Where is the office of the firm located in the country? Who are the staff and principal officers of the firm in Nigeria? There are even bigger posers: What role did the reappointed Attorney General and Justice Minister, Abubakar Malami play in getting Nigeria into this expensive mess? How do we ensure that this does not happen again?
These questions arise against the background that the P&ID contract fiasco is not the first of such deals. Not long ago, a US company obtained a judgment debt of $1.2 billion against the Nigerian National Petroleum Corporation (NNPC) for default on a project to build an oil refinery. In other sectors of the economy, we have over the years witnessed several contracts that were arranged essentially to dupe Nigeria. The Ajaokuta Steel Mills is, for instance, an endless scam.
Meanwhile, if we go to the background of the deal that has gone sour, it appears that it is easier for senior public officers to arrange a contract with foreign entities. May be it is time we overhauled the process with a view to eliminating all loopholes that make it easier for a few individuals to mortgage our future. Today it is (P&ID), tomorrow it may be a Chinese company. A careful reading of the judgment also reveals that had we acted on time, the judgment debt would not have been this much. President Muhammadu Buhari’s delay in setting up a cabinet in 2015 did not only lead to capital flight, it also deprived the nation the opportunity to apply on time to set aside the judgment.
Some legal experts are positive that there’s still a window of opportunity to seek an amicable resolution that may not involve the payment of a hefty judgment debt. Rather than grandstanding, the administration should explore those avenues to resolve the dispute with P&ID before it is too late.
If the judgment is executed and the debt is to be paid, the UK firm might walk away with 20 per cent of Nigeria’s external reserves, which stood at $44.425 billion and 2.5 per cent of Nigeria’s Gross Domestic Product