UK Court of Appeal Dismisses P&ID’s Appeal on $11 Billion Award Enforcement Against Nigeria

The Court of Appeal in the United Kingdom has dismissed an appeal by Process & Industrial Development (P&ID) against a prior judgment halting the enforcement of its $11 billion award against Nigeria.

The appeal was led by Lord Justice Snowden, with Lord Justice Fraser and Lord Justice Julian Flaux concurring in the unanimous decision. Despite permitting P&ID to appeal the judgment, the court ultimately dismissed their appeal.

The case dates back to 2010 when P&ID entered into an agreement with Nigeria to construct a gas processing plant in Calabar, Cross River State. 

P&ID claimed the agreement fell apart due to Nigeria’s failure to fulfill its obligations. The Nigerian government, however, alleged that the deal was a scam intended to defraud the country, a claim P&ID vehemently denied, labeling them as “false allegations and wild conspiracy theories.”

Following the breakdown of the agreement, P&ID sought legal recourse and was awarded $6.6 billion in damages by a tribunal on January 31, 2017. 

This amount, combined with pre- and post-judgment interest at seven percent, eventually totaled $11 billion.

In October 2023, Robin Knowles, a justice of the commercial courts of England and Wales, halted the enforcement of the award, ruling that it was obtained through fraudulent means and in violation of section 68 of the English Arbitration Act 1996. 

Justice Knowles found that P&ID had bribed Nigerian officials involved in the drafting of the gas supply and processing agreement (GSPA) in 2010 and had illicitly accessed Nigeria’s privileged legal documents during the arbitration hearings. 

Consequently, the judge ordered P&ID to pay £43 million in legal fees and disbursements to Nigeria.

One of the key issues in the appeal was whether the lower court was correct in ordering the £43 million legal costs to be paid in British pounds sterling rather than in Nigerian naira. 

P&ID argued that Nigeria funded its legal services by converting naira from its consolidated revenue fund, implying that the costs order should have been in naira. P&ID highlighted the financial impact of the naira’s significant depreciation against the pound sterling during the relevant period.

However, Lord Justice Snowden upheld Nigeria’s argument that since the legal costs were invoiced and paid in sterling, the costs order should remain in the same currency. 

“In my judgment, therefore, the judge was right to accept Nigeria’s straightforward submission that because Nigeria had been invoiced and had incurred its liability to its solicitors in sterling and had paid those bills in sterling, the court ought to make its Costs Order in sterling,” he ruled.

Thus, while granting P&ID permission to appeal, Lord Justice Snowden dismissed the appeal, marking another victory for Nigeria in this protracted legal battle.