FG Recovers Over $200 Million Bond From P&ID Case, Additional £10 Million Awarded

• The federal government has successfully recovered over $200 million following its victory in the long-drawn P&ID case
• There are still millions of pounds outstanding as litigation claims in the case, and the federal government will also be receiving it
• The foreign lawyers who handled the case have provided details of the case and shared lessons for the government to apply in future contracts

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

The federal government of Nigeria has recovered a $200 million bond paid in arbitration towards the case with Process and Industrial Development (P&ID).

This comes following the Nigerian government’s victory in the case, and the government is also expected to recover legal costs incurred during the litigation, possibly amounting to over 10 million pounds.

Attorney-General of the Federation and Minister of Justice (AGF), Lateef Fagbemi SAN, made this disclosure while receiving the team of foreign lawyers who defended Nigeria in the case in the UK.

The AGF commended the legal team led by Shaistah Akhtar for their resilience in achieving the legal victory and recovery of funds for the government.

Nigerian Government Recovers $200 Million Arbitration Bond

Fagbemi also commended the efforts of all who played a role in the success of the case, especially Akhtar, who led the legal team, and Mr. Kofo Abdusalam-Alada, the National Coordinator, FRN Legal & Investigation for P&ID.

He said;

“For completeness, I want to say that before we went into this arbitration, there was a demand for a deposit or bond of $200 million, which Nigeria paid. After our success, this bond was released."

Background: The P&ID Gas Processing Contract Dispute

Speaking during the visit, Akthar, who led the legal team, provided details of the matter. P&ID had entered into a deal with the Nigerian government in 2010 to build a gas processing plant in Calabar, Cross River State.

The company however failed to deliver on the deal and claimed that the agreement collapsed because Nigerian government did not fulfill,l its end of the deal, the SUN reports.

The Nigerian government, on its part alleged that the gas deal was a scam conceived to defraud the nation.

Legal proceedings commence as P&ID takes FG to court

In the aftermath of allegations, counter allegations, and wild conspiracy theories, P&ID went to court and secured an arbitral award against Nigeria.

On January 31, 2017, a tribunal ruled in favour of P&ID, ordering Nigeria to pay P&ID $6.6 billion as damages, and pre and post-judgment interest of 7% amounting to about $11 billion.

In October 2023, Robin Knowles, justice of the commercial courts of England and Wales, halted the enforcement of the award. The court upheld Nigeria’s prayers that the deal had been obtained by fraud and in violation of section 68 of the English Arbitration Act 1996.

The judge found that P&ID paid bribes to Nigerian officials involved in the drafting of the gas supply and processing agreement, GSPA, in 2010, and in a unanimous decision, the court dismissed P&ID appeal.

Foreign legal team warns Nigeria to apply caution in future contracts

Akthar, Partner at Mishcon de Reya LLP—the firm that represented Nigeria in the case— noted that Nigeria was one of a small 14% of successful challenges against arbitral award cases.

Akthar added that the $10 million paid to Nigeria was part of the $20 million awarded in favour of Nigeria after P&ID lost the case. She explained that the outstanding $10m is a subject of a legal challenge by the firm.

Akhtar urged the government to apply caution in future contract award processes to avoid running into similar pitfalls.

The lead lawyer observed that the agreement guiding the contract award to P&ID lacked structural strength expected for a contract of such magnitude, and that led to issues that arose along the way.

“The contract was not as robust as it should have been. It was quite a flimsy contract for such a long-running and high-value transaction,” Akhtar said.

FG to recover over N1.1 trillion from loan scheme

On the local front, the government is also taking steps to recover funds given out in loan intervention programmes.

President Bola Tinubu has given the concerned agencies September 18 as the deadline to recover over N1.1 trillion under the Anchor Borrowers' Programme Loan.

FG moves to recover $20 billion from debtors

In related news, the federal government has drawn up plans to recover over $20 billion owed in loans to the Bank of Agriculture.

The Bank of Agriculture’s managing director and chief executive, Ayo Sotinrin, stated this at a press briefing, Legit.ng reports.

He stated that the $20 billion loan recovery plan is part of a larger strategy to raise N1 trillion in recapitalisation for the bank.

Source: Legit.ng