$6.6 billion Damages: Nigeria floors P&ID again, wins UK appeal

A UK appeal court dismissed an application by a director of Process and Industrial Development (P&ID) seeking permission to appeal a high court decision that overturned an award of $6.6 billion in damages against Nigeria in 2017 in favour of the British Virgin Islands-based company

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Seamus Andrew, counsel to P&ID during the arbitration, became a director of the company in October 2017 after obtaining a stake in the firm through his company, Lismore Capital Limited, according to a copy of the Tuesday judgement, obtained by PREMIUM TIMES.

Mr Andrew is an additional appellant in the suit, with the Federal Republic of Nigeria as the claimant/respondent and P&ID as the defendant.

Justice Robin Knowles of High Court of Justice Business and Property Courts of England and Wales Commercial Court had on 21 December 2023 handed down his ruling, setting aside the award and refusing P&ID leave to appeal.

His order, however, contained a general liberty to apply to the judge.

Jia Wei Lee, a counsel to Mr Andrew, sent an email to the judge’s clerk a day after, stating that Mr Andrew would not be making an application for permission to appeal to the judge.

He noted that, rather, Mr Andrew would file an appellant notice seeking permission to appeal directly from the Court of Appeal.

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“No disrespect is intended by seeking permission directly from the Court of Appeal. The reason for this choice is that, given that Mr Andrew’s application was not considered and determined at the consequential hearing, and no extension of time was granted, the lower court is now functus officio and no longer has jurisdiction to determine an application for permission to appeal,” the court document stated.

In their verdict on Tuesday, Sir Julian Flaux, Lord Justice Phillips and Lord Justice Jeremy Baker remarked that “this court then analysed the relevant provisions of CPR 52.3 and the Practice Direction, concluding that the proper practice was to apply for permission to appeal to the first instance judge at the hand down of the judgment.”

The court document noted that Mr Andrew’s appellant’s notice in the court had been issued on 21 December 2023, more than five weeks after the date for filing any appellant’s notice with the Court of Appeal which, under relevant law, was 21 days after the hand-down of the judgement, that is 13 November 2023.

According to Justice Knowles’ decision of 23 October 2023, P&ID paid bribes to Grace Taiga, director of legal at Nigeria’s Ministry of Petroleum Resources, in connection with a gas contract signed in 2010 and failed to mention it when P&ID initiated the legal action over the botched deal. The judge also observed that P&ID had improperly retained and used internal documents of the Federal Republic of Nigeria that it had received during the arbitration.

Many of the documents were clearly subject to legal professional privilege and were confidential documents which P&ID was not eligible to see.

“The documents were transmitted to P&ID deliberately by the individuals in Nigeria who procured them. FRN did not authorise their release to and retention by P&ID. Among those acting for P&ID who received the FRN internal legal documents were Mr Cahill, Mr Andrew and Mr Trevor Burke,” the court paper said.

“P&ID has offered no sensible explanation for why these documents were leaked by [Nigeria’s] lawyers and has presented this Court with a conspiracy of silence. The obvious and correct inference is that they were obtained through corruption of [Nigeria’s] legal advisers carried out by P&ID and Mr Adebayo. … Mr Murray all but admitted in his oral evidence that [they] were procured by corruption, and no P&ID witness proffered an otherwise honest explanation”.

Background

In January 2010, Nigeria and P&ID entered into a gas supply and processing agreement, requiring the company to build and operate an accelerated gas development project at Adiabo in the Odukpani Local Government Area of Cross River State. The Nigerian Government was to source natural gas from oil mining leases (OMLs) 123 and 67 operated by Addax Petroleum and supply it to P&ID for processing into fuel suitable for power generation.

P&ID alleged that Nigeria breached the contract after negotiations were opened with the Cross River State government to allocate land for the project.

It claimed that efforts to settle the matter out of court with the Nigerian government failed, prompting the company to institute legal action.

READ ALSO: Falling oil prices stall Nigeria’s $5 billion loan bid with Aramco

An arbitral tribunal awarded $6.6 billion in damages against Nigeria and in favour of P&ID in January 2017. The sum later ballooned to more than $11 billion due to an accumulation of interest.

Nigeria challenged the award in December 2019, claiming that P&ID obtained the contract by bribing officials of the Ministry of Petroleum Resources and corrupting the country’s lawyers to gain access to confidential documents while the arbitration was on.

In October 2023, Nigeria won the bid to set aside the arbitration award after its lawyers argued that the company intended to use litigation to make money out of the situation.

P&ID, founded by Irishmen Michael Quinn and Brendan Cahill, had been pursuing the claim since 2012.

In his ruling, Justice Knowles noted that P&ID and its lawyers were “driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others.”

In July 2024, an English Court of Appeal rejected the bid by P&ID to set aside a previous judgement reversing the company’s $11 billion damages claim against Nigeria. The court noted that the decision of a London high court on 21 December 2023, throwing out the $11 billion award, stands.