ABUJA, Nigeria (AP) — A London judge on Monday overturned an arbitration award that would have required Nigeria to pay $11 billion over a failed gas project, finding the contract was obtained through fraud.
The High Court ruling by Justice Robin Knowles reverses the award to the British Virgin Islands-based Process & Industrial Developments Ltd. over the 2010 gas deal. The payment would have dealt a massive blow to Nigeria’s ailing economy.
The judge said although he did not accept all of Nigeria’s allegations discrediting P&ID and the contract, “the awards (of the contract) were obtained by fraud … and the way in which they were procured was contrary to public policy.”
Knowles said three things showed the case as an “irregularity”: P&ID providing evidence it knew was false in a witness statement, the company’s bribery or corrupt payment to a Nigerian civil servant and the company’s ”improper retention” of Nigeria’s legal document which it received during arbitration.
P&ID in 2017 secured the compensation award, which originally was $6.6 billion but is now estimated to be $11 bilion with accrued interest. The company’s main claim in the arbitration was for loss of profit for the 20 years the agreement covers.
The contract signed with Nigeria’s government in 2010 was for the company to build a gas processing plant in the southeastern port city of Calabar. The project collapsed not long after it was signed, and P&ID took the Nigerian government to arbitration, alleging a breach of contract.
Nigerian officials said the contract was signed under questionable circumstances while late President Umaru Musa Yar’Adua was critically ill and Goodluck Jonathan, his deputy, was acting president. Officials accused P&ID of bribery and corruption in securing the contract and during arbitration, which the company denied.
Associated Press writer Brian Melley in London contributed.