The federal government yesterday disclaimed a report that it had lost its appeal against the order of a British commercial court directing it to deposit $200 million as security before the court could grant a stay of execution of the $9.6 billion judgment debt awarded in favour of a British Islands firm, Process and Industrial Developments (P&ID) Limited.
Justice Christopher Butcher of the Commercial Court in London had in August awarded the sum of $9.6 billion judgment debt against Nigeria over an alleged botched gas contract between the country and P&ID.
However, following Nigeria’s appeal against the judgment, the London court ordered the country to deposit $200 million as security into the court’s account while granting request to stay execution of the $9.6 billion award in favour of P&ID.
The court in addition gave Nigeria up till November 25 to make the deposit but the federal government appealed the court’s decision.
But a news report claimed that at the hearing of the appeal on Friday the court refused to grant Nigeria’s bid to stop the deposit of the security.
However, reacting to report that the government failed in its bid to stop the $200 million security deposit, the Solicitor General of the Federation and Permanent Secretary of the Ministry of Justice, Mr. Dayo Apata (SAN), said the government did not lose its appeal, adding that the report in the media was “wrong and twisted.”
Apata stated that parties in the suit would appear before the court today for the court’s decision on whether to allow bank guarantee in place of actual payment, adding that there are indications from Friday’s proceedings that the court might accept a bank guarantee.
“There is no loss of any appeal. The media reports are wrong and twisted,” Apata said, adding: “We are in court on Monday (today) again for Butcher’s decision on whether he will substitute actual payment for bank guarantee. He was said to have indicated on Friday that a satisfactory bank guarantee would be acceptable to him.”
P&ID was reported to have claimed that Nigeria failed to avoid the deposit of $200million security required to stay the execution of the $9.6 billion judgment debt.
The report added that Nigeria accordingly agreed to pay the $200 million security deposit as ordered by Justice Christopher Butcher of the Commercial Court in London in September.
The report was tied to a statement from P&ID, wherein the federal government’s legal team was quoted to have said that Nigeria has agreed to pay the security deposit.
The statement read in part, “Before Justice Butcher today (Friday) in London, the Nigerian legal team acknowledged that President Buhari has authorised the steps to provide a bank guarantee for the $200m in security that was ordered by the English Court in September.
“Moreover, the following steps have already been taken by the Nigerian Government: Ministry of Finance has received approval to proceed with obtaining the bank guarantee; Minister of Finance has submitted a request to the Central Bank of Nigeria to proceed with procuring the bank guarantee; the Central Bank of Nigeria has submitted a request to an unnamed foreign correspondent bank to issue the bank guarantee from London and provide the relevant information to the court.”
However, Apata dismissed the report, saying parties will appear before the court today (Monday) on the issue.
P&ID had in 2012 instituted the legal battle against Nigeria in the Court of Arbitration in the UK in 2012 following Nigeria’s refusal to carry on with the GSPA agreement entered with the firm in 2010.
By the terms of the agreement, P&ID was to build and operate an accelerated gas development project at Adiabo in Odukpani Local Government Area (LGA) of Cross River State. The agreement required the federal government to supply natural gas from Addax Petroleum-operated Oil Mining Leases (OMLs) 123 and 67 for P&ID to refine into fuel suitable for power generation in the country.
According to the terms, the initial volume of gas was about 150 million cubic feet of gas per day, which would be ramped up to about 400 million cubic feet per day during the 20-year period.
P&ID alleged that after signing the agreement, the federal government reneged on its obligation after it had opened negotiations with the Cross River State Government for allocation of land for the project.
P&ID claimed that the failure of the federal government to construct the pipeline system to supply the gas frustrated the construction of the gas project and deprived it the potential benefits expected from 20 years’ worth of gas supplies.
But the federal government has continued to maintain that P&ID never began the construction of the project facility for which it claimed about $40 million in preliminary expenses.
The government said the firm’s claim in the arbitration proceedings was mainly for loss of profit for the entire twenty-year term of the GSPA, “initially claiming the sum of US$1.9 billion and later increasing its claim to US$5.9bn.
Solicitor General of the Federation had in a statement on August 16, said though the arbitral tribunal had on January 31, 2017 rendered its final award against the Ministry of Petroleum Resources in the sum of $6.597 billion together with pre-award interest at the rate of 7% per annum effective from March 20, 2013 and post award interest at the same rate till date of payment, the government had challenged the decision.
Meanwhile, the Abuja Division of the Federal High Court had on September 19 convicted and subsequently ordered the winding up of P&ID and its Nigerian affiliate, P&ID Nigeria Limited.
The court also ordered the forfeiture of “the assets and properties” of the two firms to the Nigerian government.
Justice Inyang Ekwo made the orders after the two firms, through their representatives, pleaded guilty to the 11-count charges of fraud, money laundering, tax evasion and other sundry charges in connection with a year 2010 contract leading to the recent controversial judgment of a British court recognising the award of $9.6bn in favour of P&ID by an arbitration panel.
