A report in the UK Independent Newspaper said Priti repeatedly backed Process & Industrial Development (P&ID), a British Virgin Islands-registered gas company, in its long legal dispute with the Nigerian government over a gas processing plant.
The British minister, accused of bullying staff in her department, faces calls to resign after a probe concluded that she had breached the ministerial code of conduct, although it also found her actions may have been “unintentional”.
The report, however, noted that her intervention in the court case took place before she was appointed home secretary by Prime Minister Boris Johnson.
The Home Secretary, who sought to intervene on behalf of the firm in dispute with Nigerian government, was joined in supporting the company in the lingering legal battle by UK Government Trade Adviser Shanker Singham.
The case which has been an issue of huge public interest in Nigeria with accusations of bribery and collusion between public officials and private concerns, shows how shell companies attempt to fleece the oil rich West African country of its assets through dubious contracts.
P&ID had an agreement with Nigeria to build a massive plant to process natural gas but no work was carried out on the plant. The company blamed the government for not supplying the gas, but the government claimed the contract was part of a fraudulent scheme.
A London Arbitration Tribunal had in January 2017 awarded $6.6 billion judgement debt against the federal government over alleged breach of a gas supply and processing agreement (GSPA) it allegedly signed with P&ID.
The tribunal had ruled that Nigeria was liable for $6.6 billion in damages, which increased to about $10 billion with interest accruing daily.
The tribunal judgement was affirmed by a British Commercial Court in August 2019, despite Nigeria’s objection that the contract was obtained fraudulently.
The court in September 2020 granted Nigeria’s application seeking permission to challenge the $9.6 billion arbitration award obtained by the firm and on September 10 the British Court directed P&ID to make an interim payment of more than £1.5 million within 21 days to cover legal costs Nigeria had incurred in getting the court to allow the nation file court processes outside the time provided by law.
Later in that month, Nigeria obtained another victory against P&ID as the London Commercial Court ordered the release of the $200 million guarantee for the stay of execution granted the country pending the appeal filed against the judgment of Justice Christopher Butcher for the execution of the Arbitral award of $10 billion to the company.
P&ID had sought to increase the security to $400 million, but the court presided over by Sir Ross Cranston rejected the request and ordered cost of £70,000 against P&ID.
According to the report in the British newspaper, Patel first publicly supported P&ID in an article for the newspaper City AM in November 2018, saying that Nigeria “must honour its obligations to companies like P&ID” and pay the firm “almost $9bn” (as the sum in legal action was at that stage).
She also condemned the legal action by the Nigerian government as a “running scandal”, “obstinate”, and “flouting international law and convention”.
In May 2019, Ms Patel wrote an introduction to a pamphlet by Shanker Singham which also backed P&ID against Nigeria. The pamphlet had been produced by a consultancy firm run by Mr Singham, called Competere.
That same month, she co-wrote an article in the Daily Telegraph newspaper with Mr Singham about post-Brexit aid and trade, offering support once again for P&ID, and an apparent warning to Nigeria on the consequences for its alleged failure to adhere to laws.
“The erosion of Nigeria’s commitment to the rule of law is highly worrying. Currently, Nigeria is a defendant in multiple investor disputes, including with telecoms firm MTN; an energy project with P&ID; and a hydroelectric contract with Sunrise Power. In the P&ID case, Nigeria owes the company over $9bn, due to Nigeria’s failure to honour a gas supply contract,” the article said.
The duo further said in the article: “The UK’s national interest is best-served by an open system that encourages free trade, protects property rights, and upholds the rule of law. Our development strategy and our independent trade policy post-Brexit can be harnessed to ensure maximum value for the British taxpayer.”
The report noted that there were already recurring allegations of corruption in Nigeria over the deal when Ms Patel and Mr Singham expressed their support for P&ID in the second article.
“The day before the Telegraph article appeared there was an interview with Brendan Cahill, from Ireland, one of the co-founders of P&ID, in a Nigerian newspaper during which he was asked “there has been a persistent claim that P&ID is a ‘fake’ company that made a ‘fraudulent arrangement’ with some persons in Nigeria. How do you react to this claim?”
“Mr Cahill replied: ‘We are well aware of the government’s efforts to characterise P&ID, and its founders, as frauds. This is absolutely false. The arbitrators in London spent five years carefully reviewing the written agreement and all the facts surrounding the deal, and in the end they unanimously concluded that Nigeria was to blame for the deal’s collapse and had to pay damages to P&ID,’ “ the report stated.
The Nigerian government had alleged that P&ID paid more than $390,000 (almost £303,000) in bribes to secure the contract.
Attorney general, Abubakar Malami, in a witness statement to the Property Courts of England and Wales, High Courts of Justice in January, alleged that P&ID indirectly paid more than $300,000 (£225, 850) to a company linked to an official who reviewed the contract. It also alleges two P&ID executives dropped a duffel bag packed with $50,000 in the trunk of his car in the capital, Abuja, in April 2009.
A former petroleum ministry top official in Nigeria, Grace Taiga, who oversaw a contract review committee, has also been charged with accepting bribes from P&ID-linked companies between 2015 and 2019.
The Nigerian official was scheduled to retire in September 2010, but she remained in her position for another 16 months as the P&ID contract was being finalised. Taiga has pleaded not guilty to the charges.