Malami vows heads’ll roll over $9 billion judgment debt against Nigeria

 

• Abati blames Nigeria’s habitual disregard for sanctity of contracts and terms of agreement for huge judgment debt

 

BY OUR EDITOR

The Federal Government on Thursday vowed to bring to book anyone found culpable in the agreement between Nigeria and a foreign firm, P & ID, that led to the award of $9 billion judgment debt against Nigeria.

A British Court had in a judgement delivered on August 16 ordered the seizure of 20 per cent in assets of Nigeria’s foreign reserves, amounting to $9bn (£7.4bn).

Justice Butcher of the British Commercial Court while delivering judgment in the suit filed by an Irish firm, Process and Industrial Developments Ltd (P&ID), against Nigeria gave the firm the go-ahead to seize Nigeria’s asset to the tune of $9bn.

The government has said it would appeal the judgment and has instructed its lawyers to initiate appeal proceedings against the judgment in the British court.

However, the Attorney General of the Federation and Minister of Justice, Abubakar Malami SAN, in his maiden speech at the ministry said the administration of President Muhammadu Buhari would not allow the matter to be swept under the carpet, adding that all those involved in the agreement which, according to him, was not made in the interest of the nation shall be punished.

While indicting the previous administration, Malami said, “As a government we would not fold our hands, we shall do everything to bring to book all those involved in the conception, negotiation, signing and execution of the agreement”.

Apart from his promise to deal with those who according to him have plunged the nation into difficulty, Malami disclosed that henceforth financial institutions found to have aided corruption and corrupt politicians in the country would be brought to book.

But Reuben Abati, former Special Adviser on Media and Publicity to erstwhile President Godluck Jonathan, writing in his weekly column, Tuesday with Reuben Abati, in Thisday, gave a brief insight to the Nigeria-P&ID transaction.

He wrote: “The first issue is Nigeria’s habitual disregard for the sanctity of contracts and terms of agreement, and the failure of Nigeria’s representatives in many cases to enter into agreements that are in the best interest of the country. The facts of the case in Process & Industrial Development vs. Federal Republic of Nigeria (2019) EWHC2241 (Comm), by way of summary are as follows: In January 2010, the Federal Republic of Nigeria (FRN), through its Ministry of Petroleum Resources entered into a Gas Supply and Processing Agreement (GSPA) with P&ID. Under the terms of the agreement, Nigeria “was to supply natural gas (wet gas) at no cost to P&ID via a government pipeline to the site of P&ID’s production facility.” P&ID was required to construct and operate the facility, process the wet gas and return to the government of Nigeria, lean gas to be used for power generation at no cost to the government of Nigeria.”

Abati continued: “P&ID was entitled to other derivatives stripped from the wet gas. The GSPA had a tenure of 20 years from the date of first supply of wet gas. Clause 20 of the GSPA provided for (a) the agreement to be construed in accordance with the laws of Nigeria; (b) in the event of a dispute over the interpretation or performance of the Agreement, which cannot be resolved amicably, either party will serve on the other a notice of arbitration, (c) the Arbitration award shall be final and binding upon the parties and (d) “the venue of the arbitration shall be London, England or otherwise as agreed by the Parties.” Two years later, a dispute arose between the P&ID and the Nigerian Government, and as this could not be settled amicably, the former served a notice of arbitration on the Nigerian government on the grounds that Nigeria had failed to make Wet Gas available in accordance with the GSPA.

“The matter went before an Arbitration Tribunal, under the Rules of the Nigerian Arbitration and Conciliation Act 2004, with London, England as place of Arbitration. After affirming its jurisdiction in the matter, the Tribunal began its procedural hearing to determine whether or not there was any repudiatory breach of contract. At this point, there was an attempt by the Ministry of Petroleum to reach a settlement agreement with P&ID to the tune of $850 million, payable in instalments. This was submitted for Presidential approval a week to President Jonathan’s departure from office.

“It would have amounted to tying the hands of the incoming government to grant the approval for the payment of that sum. Meanwhile, the Arbitration Tribunal had bifurcated the case and by July 2015, it affirmed that indeed Nigeria had failed to perform its obligations under the GSPA and then unanimously decided that P&ID was entitled to damages with interest. It took the new Nigerian government more than 4 months to respond. The excuse given for the delay, by Ms. Folakemi Adelore, witness for Nigeria, was that there had been a change of administration in Nigeria and that Ministers, including the Attorney General had only just been appointed. Nigeria asked for an extension of time to act on the outcome of the Arbitration Tribunal.

He added: “The Commercial court led by Phillips J. dismissed that appeal and the explanation for the delay at the time. Unsuccessful in having its way in England, Nigeria took up the matter at the Lagos Judicial Division of the Federal High Court of Nigeria, seeking essentially the same reliefs that were rejected by Phillips J. When notified of the proceedings in the Lagos High Court, P&ID dismissed the proceedings as “abusive and as a deeply unattractive attempt to forum shop”. There was a back-and-forth exchange of emails between the parties involved and the Tribunal over the meaning of venue or seat of arbitration. The Tribunal would eventually rule that London is the seat of arbitration “in the juridical sense”. The Nigerian government then went back to the Lagos High Court to set aside the Tribunal’s Procedural Order No. 12 and got favourable judgment.

“The Arbitration proceedings in London continued nonetheless to determine the quantum of damages and on January 31, 2017, the Tribunal issued its Final Award. The Tribunal insisted that P&ID would have played its own part in the contract if Nigeria had not repudiated its own obligations. It therefore ruled in favour of P&ID and ordered Nigeria to pay US$6.597,000, 000 being net present value of the profits which would have been earned by the P&ID. The Federal Government was also asked to pay interest on the amount at 7% per annum from March 2013. This final ruling was given in 2017. The Nigerian Government refused to pay and also failed to appeal the ruling! Why?” (WITH THISDAY REPORT)