Olawale Ajimotokan in Abuja
The UK Court Thursday granted the federal government of Nigeria’s request for a stay of execution which will prevent an Irish firm, P&ID, from enforcing a British Commercial Court $9.6bn judgement debt against Nigeria.
Nigeria is disputing a court judgement which awarded $9.6 billion to P&ID as compensation for a breach of contract.
Earlier on Thursday, the UK Court granted the federal government’s request for leave to appeal, enabling the government to appeal the Court’s recognition of the UK Arbitration Tribunal in the UK Court of Appeal.
In a statement issued from London on Thursday, the Attorney General and Minister of Justice, Abubakar Malami (SAN), expressed satisfaction with the development.
He described the court ruling as an important step that would allow Nigeria to defend itself.
“I am pleased with today’s development in the court and see this as a positive resolution that constitutes an important step in the government’s efforts to defend itself in a fair and just process. We look forward to challenging the UK Commercial Court’s recognition of the Tribunal’s decision in the UK Court of Appeal, uncovering P&ID’s outrageous approach for what it is: a sham based on fraudulent and criminal activity developed to profit from a developing country,” Malami said.
A British Commercial Court had on August 16 awarded judgment in the sum of $9.6bn against Nigeria over a failed contract between P&ID and the Ministry of Petroleum Resources in 2010.
The British court had in that judgment given the nod to P&ID to seize Nigeria’s foreign assets to the tune of $9.6billion.
But the federal government on its part has consistently maintained that the entire Gas Supply and Processing Agreement signed between Nigeria’s Ministry of Petroleum and P&ID in 2010 was deliberately skewed to fail so as to benefit a syndicate that was out to extort Nigeria of its resources.
Nigerian government had insisted that it will explore all options to upturn the judgment.
Last week, the Federal Government arraigned two officials of P&ID at a Federal High Court, Abuja for economic sabotage, money laundering, tax evasion amongst others.
The two officials pleaded guilty to the charges preferred against them and were consequently convicted. The court also ordered the forfeiture of assets belonging to P&ID to the federal government.
P&ID had in 2012 instituted the legal battle against Nigeria in the Court of Arbitration in the UK in 2012, following Nigeria’s refusal to carry on with the GSPA agreement entered with the firm in 2010.
By the terms of the agreement, P&ID was to build and operate an accelerated gas development project at Adiabo in Odukpani Local Government Area (LGA) of Cross River State. The agreement required the federal government to supply natural gas from Addax Petroleum-operated Oil Mining Leases (OMLs) 123 and 67 for P&ID to refine into fuel suitable for power generation in the country.
According to the terms, the initial volume of gas was about 150 million cubic feet of gas per day, which would be ramped up to about 400 million cubic feet per day during the 20-year period.
P&ID alleged that after signing the agreement, the federal government reneged on its obligation after it had opened negotiations with the Cross River State Government for allocation of land for the project.
P&ID claimed that the failure of the federal government to construct the pipeline system to supply the gas frustrated the construction of the gas project and deprived it the potential benefits expected from 20 years’ worth of gas supplies.