The UK Commercial Court has granted the Nigerian government’s application for a ‘stay of execution’ of a $9 billion judgment debt in favour of the Irish firm, P&ID.
The judge however ordered Nigeria to deposit $200 million in the court’s account within 60 days pending its appeal, and Nigeria must pay some court costs to P&ID within 14 days, Reuters news agency reported.
If Nigeria fails to deposit the amount in the court’s account within the stipulated period, which the P&ID lawyer said was the minimum period it will take Nigeria to raise the funds from the capital markets, the court will have no option than to lift the stay of execution order.
P&ID said it was satisfied with the order for Nigeria to deposit $200 million pending the appeal, describing the allegations of fraud by Nigeria as “red herring”.
The UK Business & Property Courts (the Commercial Court), presided by Justice Butcher, on August 16 granted P&ID’s request to enforce a March 20, 2013 award against Nigeria by a District Circuit Court in Washington DC.
During Thursday’s proceedings, Nigeria’s legal team led by Attorney-General and Minister of Justice, Abubakar Malami, argued the August 16 ruling was flawed as the damages awarded P&ID was “clearly unreasonable and manifestly excessive and exorbitant.”
The Nigerian government welcomed the court’s decision on Thursday, according to a Presidency statement.
“I am pleased with today’s development in the court and see this as a positive resolution that constitutes an important step in the Government’s efforts to defend itself in a fair and just process,” the statement quoted Mr Malami as saying.
“We look forward to challenging the UK Commercial Court’s recognition of the tribunal’s decision in the UK Court of Appeal, uncovering P&ID’s outrageous approach for what it is: a sham based on a fraudulent and criminal activity developed to profit from a developing country.”
Channels TV reported Thursday night that Mr Malami had announced that the government will appeal against the demand for $200 million.
P&ID approached the court to seek compensation after accusing the Nigerian government of breaching a 2010 gas contract agreement.
The contract for gas supply and processing was signed by the administration of late President Umaru Yar’Adua and P&ID.
The contract was to build gas processing facilities around Calabar, Cross River State, and the government was to supply wet gas up to 400 million standard cubic feet per day.
PREMIUM TIMES reported how the agreement was designed to fail as key elements necessary for its success was missing.
The court initially granted the firm an arbitral award of $6.6 billion. But, the figure rose to about $8.9billion with an additional $2.3 billion in accumulated interest at 7 per cent rate, after Nigeria refused to enter an appeal for over five years.
The company said the accumulated interest was based on claims that the damages were calculated at the current value of 20-year income accumulated since 2013 when the ruling was first given.