Nigeria has successfully overturned an $11 billion damages bill associated with a collapsed gas processing project that was alleged to be tainted by bribery.
The West African nation had been facing an enormous financial burden, amounting to approximately one-third of its foreign exchange reserves. The dispute had arisen when a relatively unknown British Virgin Islands-based company, Process & Industrial Developments (P&ID), initiated arbitration proceedings against Nigeria.
P&ID had been granted a 20-year contract in 2010 to build and operate a gas processing plant in southern Nigeria, forming part of a larger strategy to harness the country’s substantial gas reserves. When the project eventually collapsed, P&ID sought arbitration in London and was awarded $6.6 billion in 2017, which had grown to over $11 billion with accumulated interest. This astounding amount was equivalent to ten times Nigeria’s 2019 health budget.
Nigeria’s legal team contended that their nation had fallen victim to “a campaign of bribery and deception” orchestrated by P&ID. They alleged that P&ID had paid bribes to high-ranking officials to secure the contract and had subsequently corrupted Nigeria’s legal representatives to acquire confidential documents during the arbitration process.
P&ID vehemently denied any allegations of securing the contract through bribery or manipulating Nigeria’s legal team during arbitration, instead attributing the failure of the gas deal and their arbitration loss to institutional incompetence.
In a written ruling on Monday, Judge Robin Knowles allowed Nigeria’s challenge, stating, “I have not accepted all of Nigeria’s allegations.” Nevertheless, he emphatically noted that the arbitration awards “were obtained by fraud and the awards were, and the way in which they were procured was, contrary to public policy.”