BREAKING: FG Rejects British Court Order On $9b Judgment, Set For Appeal
Federal government said it has instructed its lawyers to appeal against Friday’s judgment by an English court which gave Process and Industrial Development Limited (P&ID) the go-ahead to seize Nigerian assets worth $9 billion.
In a statement released on Friday evening, the solicitor general of the federation and permanent secretary, federal ministry of justice, Dayo Apata said Nigeria will seek for a stay of execution.
See the full statement issued by the Solicitor General of the Federation and Permanent Secretary, Federal Ministry of Justice, Abuja below:
PROCESS & INDUSTRIAL DEVELOPMENT LIMITED (P&ID) V. FGN
Please recall the dispute that led to Arbitration between Federal Government of Nigeria (FGN) and Process and Industrial Development Ltd which arose from a 20 year Gas Supply and Processing Agreement (GSPA) entered in 2010 between FGN (through the Ministry of Petroleum Resources) and P & ID in respect of an accelerated gas development project in Nigeria’s OMLs 67 & 123. P&ID never began the construction of the project facility although it alleges it incurred about $40m in preliminary expenses.
P&ID’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$5.9 Billion.
The Arbitral Tribunal on 31 Jan 2017 rendered its Final Award against the Min of Petr. Resources in the sum of US$6.597 Billion together with pre-award interest at the rate of 7% per annum effective from 20 March 2013 & post award interest at the same rate till date of payment.
In granting the huge arbitration award against Nigeria the tribunal decided the following:
i. that the project would operate at 93% uptime during the twenty year of the GSPA despite the well-known risks of operating such a project in the Niger-Delta.
ii. that the average price of Natural Gas Liquids (the main revenue earner for P&ID assuming the GSPA had been implemented), should be based on an average oil price in excess of $100 per barrel over the twenty-year life of the project;
iii. to apply a discount rate to P&ID’s supposed lost profits of 2.65%, the same interest rate paid on United States treasury notes thereby adjudging P&ID, a start-up company that never commenced any physical work on the project but planned to operate in the midst of the Niger-Delta crisis, using a novel and unproven technology, a virtually “risk free” investment.
Upon the Award, P & ID commenced recognition and enforcement proceedings of the arbitration award against FGN in March 2018 in both the United Kingdom (“UK”) and the United States of America (the “United States”).
The FGN is duly represented in the proceedings in the United States by the Law Firm of Curtis, Mallet-Prevost, Colt & Mosle LLP which also represented it in the UK proceedings of which judgement was given on 16th August, 2019 in favour of the P&ID to commence enforcement proceeding against the FGN assets in the UK.
Recall further that this matter was inherited from the previous Administration by the present one. Upon inheriting this matter, this Government engaged the renowned US Law Firm of Curtis, Mallet-Prevost, Colt & Mosle LLP to defend the interest of the FGN.
The Law Firm has taken steps to defend proceedings in the US by urging the District Court to dismiss P&ID application for enforcement of the award on ground that Nigeria as a sovereign state has an absolute right to obtain an authoritative determination of its sovereign immunity.
The FGN therefore demanded that the jurisdictional issue must be conclusively resolved before Nigeria may be required to litigate the merits of P&ID’s petition.