The Royal Courts of Justice, London, presided over by Justice Sir Ross Cranston, recently granted the Nigerian government’s application for extension of time to challenge the arbitral award of USD$9,600,000,000 (Nine Billion, Six Hundred Million United States Dollars) in favour of Process and Industrial Development Limited (P & ID). The ruling of the Royal Courts was based on the discovery of new evidence alleging fraud/illegality of the agreement.
It may be recalled that in 2010 the Ministry of Petroleum Resources, on behalf of the Nigerian government, entered into a gas supply and processing agreement with P&ID. P&ID subsequently alleged that the Nigerian government failed to honour its obligation under the agreement and took the matter to arbitration in London.
In January 2017, a three-member arbitral tribunal led by Lord Hoffmanan, ruled that the Nigerian government was liable to P&ID in the sum of $6,600,000,00 (Six Billion, Six Hundred Million United States Dollars) as damages suffered by P&ID in potential loss of net income resulting from the alleged breach with pre-award and post-award interest at seven percent (7%) per annum.
The Nigerian government had, since then, made several attempts to set aside the award. In 2019, the Nigerian government filed an application for a stay of execution, which was granted by the UK Courts subject to the deposit of the sum of $200,000,000 (Two Hundred Million United States Dollars) in the court’s accounts.
The recent, ruling of the Royal Courts of Justice, London granted the Nigerian government’s application for extension of time to challenge the arbitral award in favour of P&ID. It is important to note, however, that the ruling is a temporary reprieve for the Nigerian government, as it merely provides an opportunity for the Court to review the new evidence of fraud alleged by the Nigerian government. The ruling does not amount to a repeal of the arbitral award.
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