P&ID: Judge Refers UK Lawyers to Regulators in Nigeria’s $11bn Arbitration Win

P&ID: Judge Refers UK Lawyers to Regulators in Nigeria’s $11bn Arbitration Win


•They stood to share £3.9bn in the event of P&ID’s success

Alex Enumah in Abuja

Justice Robin Knowles of a Royal Courts of Justice in the United Kingdom has refered lawyers who stood to have benefited in the $11 billion judgment award against Nigeria to the body regulating the conducts of lawyers in the United Kingdom.

Specifically, Justice Knowles held that he would refer a copy of his judgment to the Solicitors Regulation Authority and Bar Standards Board in relation to the conduct of solicitor Seamus Andrew and barrister Trevor Burke KC over the handling of documents which came into P&ID’s hands during the arbitration proceedings.

Recall that the judge in a judgment delivered on Monday, quashed the $11 billion judgment debt entered against Nigeria by a United Kingdom commercial court for allegedly failing to honour the contract entered with an Irish firm, Process and Industrial Development (P$ID), for the development of

Justice Knowles had in a judgment held that the arbitration award under which Nigeria was ordered to pay a sum equal to its entire federal budget was obtained by fraud and granted Nigeria’s request to quash the said award.

“I have not accepted all of Nigeria’s allegations. But, the awards were obtained by fraud and the awards and the way in which they were procured was contrary to public policy”, the judge held.

According to Justice Knowles, “As at the time Nigeria was taking part in the arbitration, “it did not know and could not with reasonable diligence have discovered the grounds of objections on Section 68(2)”.

The judge pointed out that the reasonable diligence with which he was concerned was “confined to reasonable diligence that would have discovered the grounds that the objection, that is the award being obtained by fraud or the award or the way in which it was procured” was contrary to public policy because of bribery or corrupt payment, because of false evidence of what happened with Nigeria’s internal legal documents.

Besides bribing an official of the Ministry of Petroleum Resources, P&ID had been in possession of some legal documents used against Nigeria in the arbitration.

 “In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68″, the judge held.

Having quashed the said award, the judge remarked that the case ‘sadly brought together a combination of examples of what some individuals will do for money’.

In an endnote, the judge lambasted individuals who were ‘driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others’.

The court while observing that Andrew and Burke appreciated that [Nigeria’s internal legal documents] included documents that were privileged, rejected as ‘untrue’ Andrew’s oral evidence that the documents were shared as part of settlement discussions.

“Mr Andrew and Mr Burke knew that P&ID and they were not entitled to see these documents. Their decision not to put a stop to it, at least by informing Nigeria or immediately returning the documents they knew were received, was indefensible,’ the court held.

Adding that, “The reason Mr Andrew and Mr Burke behaved in this way was because of the money they hoped to make”.

According to the court Andrew may have had a claim for up to £3bn in the event of P&ID’s success while Burke may have had a claim for up to £850m.

Justice Knowles subsequently expressed confidence that the regulators of the legal profession in England & Wales will consider the professional consequences of the conduct of Mr Burke and Mr Andrew in relation to Nigeria’s internal legal documents.

He also expressed hope that the case would spark debate about the conduct of arbitration. “The facts and circumstances of this case, which are remarkable but very real, provide an opportunity to consider whether the arbitration process, which is of outstanding importance and value in the world, needs further attention where the value involved is so large and where a state is involved.

“The present case shows that having a tribunal of the greatest experience and expertise is not enough. Without reflection, then a case such as the present could happen again, and not reach the court”.

Meanwhile, Andrew and Burke in a statement denied any wrongdoing. On his part, Andrew stated that he does not accept the criticism in the judgment concerning Nigeria’s internal legal documents; claiming that he acted in accordance with his professional duties.

“I appeared voluntarily before the High Court as a witness and did my best to answer the questions asked of me carefully and accurately, as the judge observed. I shall not be making any further comment at this time in relation to today’s judgment”.

Similarly, Burke said: I do not accept the criticism that have been made of me in relation to Nigeria’s internal legal documents. I gave my evidence in the English proceedings in good faith and to the best of my ability.

“I am confident that my conduct will be exonerated by my professional body with whom I shall cooperate fully”.

But, the court stated that the documents in question were made available by one party by accident, without appreciating that they could have been withheld on the grounds of privilege.

Recall that Knowles had in a judgment delivered on Monday, held that the judgment awarded against Nigeria was a process of fraud.

The judge held that P&ID had engaged in fraud, bribery, concealment of material facts regarding the contract it entered with Nigeria, amongst others, adding that Nigeria was able to establish that there was indeed serious irregularity that affected the tribunal.

 “In the circumstances and for the reasons I have sought to describe and explain, Nigeria succeeds on its challenge under section 68″, the judge held.

The said section provides that : if there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may-

1- Remit the award to the tribunal in whole, or in part for reconsideration

2- set the award aside in whole or in part, or

3- declare the award to be of no effect in whole or in part.

However, Justice Knowles said he would leave the question of what order the court should make in the circumstances to parties so as to afford them the opportunity to “present arguments once they have considered the judgment.

Nigeria had filed an appeal against the enforcement of the arbitration award and the UK commercial court granted the country the relief in September 2020, returning the matter to the high court for trial.

At the two-month trial that took place before Knowles between January and March 2023, the Nigerian legal team argued that there was overwhelming evidence that the contract and the arbitration award had been procured through “an audacious fraud on Nigeria”.

They argued that the award should be set aside, citing the trials and conviction of some of the actors for corruption and money laundering as evidence of graft on an “industrial scale”.

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.

But the federal government had continued to maintain that P&ID never began the construction of the project facility for which it claimed about $40m in preliminary expenses.

The government said the firm’s claim in the arbitration proceedings was mainly for loss of profit for the entire twenty-year term of the GSPA, “initially claiming the sum of US$1.9 billion and later increasing its claim to US$5.9bn.

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