Failed P&ID Gas Contract Debt Hits N5tn
Nigeria’s debt in the ongoing case against Process and Industrial Developments Limited for a failed gas contract has risen to N5tn.
The legal dispute was a fallout of the disagreement between the Federal Government which awarded a gas project contract to P&ID in 2010. The gas processing facility has materialised because of the dispute.
After years of legal battle, a London-based arbitration tribunal in 2017 said that Nigeria had failed to deliver its side of the bargain, ordering the country to pay P&ID €6.65bn in compensation.
The award, which has been accruing on a pre and post-judgment interest of 7 per cent since 2013, has risen from an initial €6.65bn to €11.09bn about N5trn.
That sum represents close to 30 per cent of the country’s foreign exchange reserves, which stood at €37.29bn at the end of November.
“The government ought to have sought advice on what to do. We have excellent lawyers and judges in Nigeria who can look at the case and advise on whether the federal government should continue with it or settle out of court,” an economist and professor of Economics at the Olabisi Onabanjo University, Sheriffdeen Tella told journalists during a telephone interview.
Nigeria has gone to court in London arguing that P&ID obtained the original contract through bribery and used the arbitration proceedings as a means of extorting a huge sum of money from the country’s public coffers.
However, P&ID denied the allegation, and accused the Nigerian government of “false allegations and wild conspiracy theories”.
An eight-week trial is due to start in January at a High Court in London.
At a pre-trial review last Friday, a lawyer representing Nigeria, Mark Howard, told the court that evidence of “widespread corruption and bribery on an industrial scale” would be put forward.
“It was a case of bribery to get the contract- bribery of lawyers,” he said, alleging that two London-based British lawyers previously involved in the case had committed “serious misconduct”.
P&ID was originally established by two Irish nationals. Ownership of the firm has since passed to two Cayman Islands-based entities.
In August, Nigeria made fresh claims of fraud against P&ID, increasing the pressure ahead of the case described as one of the biggest London trials to take place next year.
“I am so sorry, we can’t comment on the matter because it is already in court,” a Senior Advocate of Nigeria, Yomi Alliyu told journalists when asked whether there was a prospect of Nigeria winning the case.