Nigeria, on Monday, resumed an attempt at London’s High Court to overturn the $11 billion debt awarded in favour of Process and Industrial Developments (P&ID).
Gatekeepers News reports that a British court, in 2019, granted P&ID’s request to seize Nigerian assets worth $9 billion over a 2010 contract.
The company maintained that it entered into an agreement with Nigeria to build a gas processing plant in Calabar, Cross River state but that the deal collapsed because the Nigerian government did not fulfil its end of the bargain.
The award, which has been accruing interest since 2013, is now worth $11 billion.
At the proceedings in London’s high court on Monday, Mark Howard, Nigeria’s lawyer, told the court that P&ID obtained its contract “by telling repeated lies and paying bribes to officials”.
As a result, the lawyer also argued that P&ID “corrupted” Nigeria’s attorneys to obtain secret information during the arbitration.
In his written submissions, Howard added that the company paid bribes and relied on false evidence “to dupe (Nigeria), the tribunal, and this court into giving P&ID an extraordinary amount of money on the back of a campaign of bribery, corruption and deception”.
However, P&ID has maintained innocence.
The company said the gas processing agreement was “a genuine contract which P&ID genuinely wanted to perform”.
In court records, David Wolfson, P&ID attorney, claimed that Nigeria’s arbitration defeat “had nothing to do with any corruption.”
Wolfson will make opening arguments on behalf of P&ID on Tuesday.
The trial, which started on Monday, is expected to last for eight weeks.
That amount equals almost a third of Nigeria’s forex reserves, and its payout would deal a huge blow to Africa’s largest economy, which is still recovering from a pandemic-induced recession.
Meanwhile, Nigeria will elect a new President in February and if it lost in London, the incoming President will have to make the crucial decision of whether to re-enter settlement talks with P&ID or continue claiming fraud.
The company has said it will seek authorisation to seize the state’s overseas assets, and liability from an unresolved payment could make it more expensive for Nigeria to raise money in international capital markets.
The trial comes at an economically vulnerable moment for Africa’s largest oil producer. During the first 11 months of last year, Nigeria’s government spent 80% of its income on servicing debt as oil production declined and spending rose on fuel subsidies.
Gatekeepers News reports that whatever the trial’s outcome, the high court’s decision can be further challenged in the UK Court of Appeal, and ultimately, the Supreme Court.