$9.6bn mess: Lies, desperation won’t help Nigeria, P&ID tells Buhari

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Irish firm enmeshed in the $9.6 billion compensation claim from Nigeria, Process and Industrial Designs on Thursday said the Buhari administration was resorting to desperate tactics over the pending award of $9.6 billion compensation against Nigeria by the English Commercial Court.

The award pertains to a failed contract for the use of flared gas for electricity generation.

On Wednesday, some key officials of the administration held a press conference in Abuja, in which they made certain allegations about the compensation.

Among officials at the briefing were Minister of Information, Lai Mohammed; Attorney-General of the Federation and Minister of Justice, Abubakar Malani; Minister of finance, Zainab Ahmed; and Central Bank Governor, Godwin Emefiele.

However, P&ID in a statement made available to Metrostarng said their comments amounted to desperate antics to cover up Nigeria’s liability in the case.

The Nigerian government has already filed an appeal against the award in a United States court but P&ID said it was a futile efforts as the English arbitration panel had informed it of the facts that led to its decision.

It also described the announcement by the Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, that it was investigating the matter as a “sham.”

In the statement titled’ Desperation Sets In For Buhari’s Administration,’ the Irish firm said: “Yesterday in Abuja, we witnessed an elaborate theatrical performance by the Nigerian Government’s Minister of Information and Culture, Lai Mohammed, where he presented an alternative reality to the Nigerian media and public following the English Commercial Court’s ruling in favour of P&ID.

Minister Mohammed was flanked by key Buhari Administration officials, including: Attorney General, Abubakar Malami; Central Bank Governor, Godwin Emefiele; and Minister of Finance, Zainab Shamsuna Ahmed.

The rhetoric was flamboyant, but what their comments cannot disguise is the fact that their account of events related to the P&ID project is entirely fictional. These allegations are old tired, and have been rejected many times before.

The Arbitration Tribunal, and the English Commercial Court, combined have held years of hearings and considered volumes of expert testimony, and have concluded, time and again, that P&ID is entitled to compensation for the Nigerian Government’s failure to meet its contractual commitments. The arguments, which the Buhari Administration continues to repeat, have been comprehensively rejected in arbitration and in court, and Nigeria is now facing a judgment approaching $10 billion.

Neither the Nigerian Government’s sham investigation, nor the attempts to silence debate, will change this simple and powerful fact.

Instead of pursuing a mature path, the Buhari Administration has resorted to a series of desperate attacks on everyone from the English judge, to Nigeria’s own civil servants. In fact, the Administration’s accusations have been directed at pretty much everyone except themselves. This response – personified by Minister Lai Mohammed’s press conference – signals that the Administration is clearly intent on evading their international legal responsibilities.

These contrived “facts” have been repeated since 2012; the current Nigerian Government has had many opportunities, over many years, to engage in good-faith negotiations and to find a solution on a reasonable basis. They have not done that.

Nevertheless, it is important to address each false allegation in turn, to demonstrate again the emptiness of their conspiracy theories.

Minister Lai Mohammed Press Conference

Minister Mohammed made a series of unsubstantiated and false claims, including:
Claiming that Nigeria has “recorded some successes… in the US”. However, the reality is that Nigeria has run scared in the US, and does not want to present its defence on the merits, relying instead upon Sovereign Immunity – a defence which is bound to fail because the Nigerian Government signed an arbitration agreement. In any event, the US court has now been formally notified that the English Court has rejected all of Nigeria’s defences.

Claiming that the Gas Supply Processing Agreement (GSPA) was “purportedly entered into” and the “company never performed as agreed.” All of the Arbitrators and the Court conclusively agreed that the Nigerian Government failed to uphold its contractual commitments to P&ID. The project, therefore, could not be completed as planned. If P&ID had been the entity to breach the contract, or if there was no actual agreement, as the Minister suggests, P&ID would not have succeeded before the Tribunal and English Commercial Court.

Notably, one of the arbitrators on the Tribunal was a former Attorney General of Nigeria, and he agreed that Nigeria was at fault in this case.

That “Nigeria successfully applied to have [an interim award finding that Nigeria was liable to P&ID] set aside by the Federal High Court in Lagos, the Tribunal ignored this decision.” However, Nigeria knew in 2016 that it had not successfully set aside the Liability Award. On 27 May 2016, the Tribunal wrote to Nigeria to confirm that: “As the parties will be aware from Procedural Order No 12, the Tribunal has decided that the seat of the arbitration is England. It follows that the Federal Court of Nigeria had no jurisdiction to set aside its Award.” Nigeria did nothing in response other than continue with the proceedings, thereby tacitly accepting the analysis of the Tribunal.
Furthermore, the English Commercial Court reviewed this claim by the Nigerian Government and decisively rejected it, writing: “Procedural Order No. 12 was issued before the order of the Nigerian Court purporting to set aside or remit the Liability Award for consideration.

As long as Procedural Order No. 12 stood, it of itself created a basis for saying that the order of the Nigerian Court of 24 May 2016 was ineffective, as being made by a court which was not the supervisory court as determined by the decision of the arbitral panel.”

That Buhari Administration has “… serious concerns about the underhanded manner in which the contract was negotiated and signed.” Nothing could be further from the truth. The agreement P&ID had with the Nigerian Government is well-documented and provided the Government with ample opportunity to provide input and affect decisions. Here’s a good overview of how transparent this agreement was between parties:

Article 9 of the GSPA establishes that a Joint Operating Committee had been set up on 22 July 2009, “comprising of two representatives from the Ministry of Petroleum Resources and two representatives from NNPC nominated by the Government and two representatives nominated by P&ID.”

A letter from the Ministry of Petroleum Resources to the Department of Petroleum Resources on 15 January 2010, states “The Hon. Minister of Petroleum Resources has approved the Agreement.”

In a follow-up letter from P&ID to the Group Managing Director of NNPC, dated 14 May 2010, reporting on the progress of the project, the Group Managing Director of the NNPC verifies receipt of the letter and notes, “Please proceed as prayed and appraise me subsequently.”

Moreover, minutes from a Ministerial Stakeholders meeting on the P&ID project from 10 August 2010 confirm the Ministry’s Permanent Secretary directed the National Petroleum Investment Management Services (NAPIMS) to “obtain a Letter of Undertaking from Addax Petroleum confirming that 150MMSCuFD of associated Wet Gas from OML123 will be made available to P&ID in conformity with the Government’s obligations under the terms of the Definitive Agreement dated 11th January, 2010 with P&ID.”

It might be helpful to remind the Minister of some basic facts about the case:
The Court rejected the Nigerian Government’s arguments and agreed with P&ID on every point;
London was the seat of the arbitration;
The Award does not violate UK public policy; and
Nigeria cannot now challenge the Tribunal’s awarding of pre-award interest.
Moreover, Justice Butcher stated that many of the arguments made by the Nigerian Government could not be made on this application (para. 83), that there were avenues open to Nigeria “but it did not utilise them” (para. 62), and that applications could have been made but Nigeria “did not do so” (para. 63). This chronology demonstrates how the Nigerian Government recognized the validity of P&ID’s case, but now seeks to revise history to avoid their obligations.

For all the misinformation and bravado emanating from the press conference, Minister Mohammed did get one thing right when he stated that the “UK Court has recognized the Award and given the company the authorization to seize Nigeria’s assets.”

Attorney General Abubakar Malami
The AG falsely claims that the contract was “never performed as agreed” by P&ID. This is the same line used by Minister Mohammed. This has been flatly rejected by both the Tribunal and the English Court. The judgment is clear, and decisive. It is also consistent with prior legal findings, including those of the original Tribunal, which identified the Nigerian Government as at fault and determined that compensation must be paid.

The AG has also changed his story about his own involvement and responsibility in the case. The AG has been handling this matter for the last four years, since November 2015. This was just under three months after the Liability Award was announced. Moreover, one of his first official acts as AG was to ignore the offer from P&ID to settle for $850 million. The facts are clear, the AG’s legal team lost and is now refusing to accept its international legal responsibilities.

Central Bank Governor Godwin Emefiele
The Central Bank Governor Godwin Emefiele claimed there was “certain anomalies in the process leading to the Award of that contract.” This is a desperate attempt by the Buhari Administration to insinuate irregularities that never existed.

The Governor may be referring to the fact that the GSPA was signed by the Minister of Petroleum Resources without being vetted by the Attorney General (if indeed that be the case).

However, the authority of the Minister of Petroleum Resources to sign the GSPA was specifically challenged by Nigeria in the liability phase, and the Tribunal found in favour of P&ID (see paragraphs 41 – 54 of the Liability Award).

Buhari Media Advisor Louis Odion
President Buhari’s Senior Technical Assistant on Media, Louis Odion, has attempted to smear a respected judge in the English Court, underscoring the anxiety and panic that is overwhelming the Buhari Administration.
Louis Odion’s claims that English courts accept bribes is an outrageous allegation with zero evidence to support it. Mr Odion cites Transparency International as a source, but does not provide a link or source material.

In fact, the evidence shows Mr Odion has no ground to make such an allegation. The latest Transparency International report describes the level of bribery in the UK as “0%” and says the country is “low risk” for corruption and bribery. Mr Odion’s smears are baseless.

This outright lie is sadly consistent with the Buhari Administration’s reckless and baseless allegations against P&ID.

Economic and Financial Crimes Commission Chairman Ibrahim Magu
The Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, has announced an investigation into the P&ID contract. This is a sham investigation– indeed the Chairman appears to have reached a conclusion before commencing the investigation, referring to the GSPA as “daylight robbery.” That is nothing more than an imagined conspiracy to distract attention from the real issues, which have been proven in court: that the Nigerian Government repudiated the contract with P&ID, the Attorney General’s legal team lost its case in Court, and is now refusing to accept its international legal responsibilities.
There was no fraud or corruption in the formation of the GSPA. Therefore, at no time has any evidence been produced to support a claim of fraud in the formation of the GSPA or a “sham” in the conduct of the arbitration – there was no fraud or sham.”

 

 

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