$11bn P&ID Debt: Nigeria’s Long Road To Victory

• How Osinbajo’s Intervention Swung Case In Nigeria’s Favour
• Relief For Shasore As Court Clears Him Of Corruption
• Tinubu, Nigerians Hail Judgement

By Babajide Okeowo

After a gruelling, nerve-racking legal tussle that lasted the whole of six years and a whopping $11.5bn at stake, Nigeria, Monday in far away United Kingdom secured a landmark judgement against the controversial shell company, Process & Industry Development (P&ID) Limited.

Justice Robin Knowles of the Business and Property Court in his 140-page judgment held that P&ID obtained its multi-billion-dollar arbitration award against Nigeria by fraud.

Nigeria’s long legal tussle with P&ID began on 11th January 2010, when the company entered into a deal with Nigeria to build a gas processing plant in Calabar, Cross River state, but the company said the deal collapsed because the Nigerian government did not fulfil its end of the bargain.

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Consequently, the company approached a London Court claiming Nigeria breached the terms of the contract and subsequently secured an arbitral award against the country.

A private arbitration tribunal ruled that Nigeria should pay P&ID $6.6 billion as damages, as well as pre-and post-judgment interest at 7 per cent.

However, the Federal Government appealed the judgement alleging that the contract was secured through dishonest means that included bribery and perjury and that the arbitration award, which has now risen to $11 billion because of interests, should be quashed.

Ruling on the appeal, Justice Knowles upheld Nigeria’s prayer on the ground that the ill-fated gas processing contract was obtained by fraud.

The court held that the agreement signed by the Federal Government of Nigeria and P&ID was an overall fraudulent enterprise.

“I am satisfied P&ID did intend to perform the Gas Supply and Processing Agreement (GSPA) when it entered into it, and that there were means by which it could have done so. Nigeria has characterised the GSPA as a sham and contended that P&ID as a BVI-registered company with no obvious assets, no relevant experience and few employees, had no genuine intention of performing the GSPA, and would never have been able to do so.

“Whilst P&ID was prepared to bribe in the course of its business, I do not accept it was of the sophistication to conceive at the contract stage a plan to extract large sums of money from Nigeria by means of an arbitration or a corrupt settlement. Consistently, P&ID did not use the GSPA to move directly to arbitration at the first available opportunity.

“I have no hesitation in concluding that Nigeria suffered substantial injustice… And that is even before taking into account what P&ID did with Nigeria’s Internal Legal Documents,” the judge added.

He subsequently held that the awards were obtained by fraud and the Awards were and the way in which they were procured was contrary to public policy.

“I have concluded that when the parties entered into the GSPA, P&ID’s intention was to perform and not simply use the GSPA as a device to get an award or settlement,” he ruled.

Meanwhile, The Matrix gathered from very reliable sources that the tipping point in the case happened in 2018 when then Vice President Yemi Osinbajo penned a weighty letter to then-President Muhammadu Buhari seeking the involvement of the Economics and Financial Crimes Commission (EFCC) to investigate the case.

According to court documents obtained by The Matrix, the EFCC investigation began in 2018 following Osinbajo’s suspicion that the whole arrangement reeked of fraud and his subsequent letter to the then-President.

“On 12 June 2018, the Vice President’s office (no doubt using his manuscript on the joint ministerial letter) replied formally to the Attorney General and Minister of State, stating his view that “the whole arrangement amounts to a fraud on the nation”, and that he had therefore additionally recommended to the President “the need to independently investigate all the relevant circumstances”.

That same day, 12 June 2018, the Vice President wrote to the President recommending that as well as reopening negotiations with P&ID he might also wish to direct the acting chairman of the EFCC “to independently investigate all relevant circumstances surrounding the transaction underlying the arbitral award with a view to determining whether or not there was a fraudulent intent in the conception of the agreement”.

The President issued a direction on 26 June 2018 that the Ministry and the Ministry of Justice were to provide all necessary information, documents and support to the EFCC to enable a thorough investigation of the circumstances surrounding the GSPA and subsequent events. In addition, he directed the Director-General of the National Intelligence Agency to investigate P&ID with a view to uncovering the identities of all the promoters, directors and shareholders of the firm. The President also ordered an urgent review into any lapses that had led to the current situation.

On 28 June 2018 the then Attorney General, Mr Abubakar Malami, wrote to the acting chairman of the EFCC, passing on the President’s instructions to conduct “a thorough investigation of the circumstances surrounding the [GSPA] and the subsequent events”. As well he sent the documents his department had as part of the inquiry” the court document stated. It was this coordinated effort by the multi-agency cooperation in Nigeria instigated by Osinbajo that led to the unravelling of the cesspit of corruption that paved the way for yesterday’s landmark judgement.

In yesterday’s judgement, The Matrix learnt that a former attorney-general and commissioner for justice in Lagos State, Olasupo Shasore was also cleared of corruption charges in the case.

Mr Shasore was appointed as Nigeria’s lawyer in the P&ID case in 2012, he was accused of compromising the country’s defence at a British arbitration tribunal, contributing to the humongous award issued against Nigeria by the panel.

However, on Monday, according to the judgment exclusively obtained by The Matrix, Justice Knowles cleared Shasore of any wrongdoing.

On Pages 96 &97, item 440 of the judgement titled “Nigeria’s Allegations Against Its Lawyers, Mr Shasore SAN” the Justice premised Shasore’s innocence on four pillars.

“Did P&ID corrupt Mr Shasore SAN, Leading Counsel for Nigeria in the Arbitration until they parted way into its quantum stage, with a view to achieving a negotiated outcome or an arbitration award which it could then seek to enforce? Were the arbitration proceedings themselves affected by corruption by P&ID of Mr Shasore SAN?

 Nigeria contends that Mr Michael Quinn gave false evidence in the Arbitration and that P&ID colluded with Mr Shasore SAN, as Nigeria’s advocate in the Arbitration, to ensure that he did not challenge that false evidence and he was involved in preventing or hindering Nigeria from putting up a proper defence. Reference is made to his not seeking documents and to delays.

Neither party called Mr Shasore SAN as a witness at the hearing before me. As far as I am aware, he has not sought independently to provide an account to the Court. However, Mr Shasore SAN has not, in my judgment, been shown to be corrupt. His actions are inconsistent with Nigeria’s theory that he was. Four examples suffice.

First, his advice to Nigeria to investigate, and allow expert evidence to be obtained, and to proceed in a timely fashion, was sound and constant. Second, he assisted Nigeria in succeeding in its applications to the Nigerian Court. Third, his participation in the various settlement discussions helped reduce the figures. Fourth, a review of the transcript of the hearing on liability shows repeated robust challenges by him of P&ID, and indeed of the Tribunal; and it is impossible to read pages 55-59 and 68-71 of that transcripts as other than properly attempting through argument to secure an outcome in favour of Nigeria. On the other hand, the account given in this judgment shows that responsibility for failures to obtain evidence and to avoid delay lay rather with many ministers and officials, whom Mr Shasore SAN and others (including Stephenson Harwood and Mr Cordara QC at one stage) pressed repeatedly.

In a “statement of facts and documents concerning bribery”, prepared by Nigeria, it is alleged that a payment of US$300,000 by Mr Shasore SAN to Mr Ukiri was a corrupt payment to Mr Ukiri in return for which Mr Ukiri (who did not do any work on the P&ID case) “acted as one of Mr Shasore’s conduits in leaking [Nigeria’s Internal Legal Documents]”, and in particular by the email of 28 October 2014 in which Mr Ukiri sent to Mr Adebayo such a document.

There is no evidence before me at this trial to substantiate this. Mr Shasore had just been paid more than US$1 million by Nigeria for his legal work. The payment was to his partner in a legal practice. Nothing links Mr Ukiri’s email with the payment or shows why Mr Shasore SAN should go about things in this way if (which I do not accept has been established at this trial) he was behind P&ID receiving copies of Nigeria’s Internal Legal Documents.

I add that in my view, Nigeria (and specifically Mr Malami SAN, then-Attorney General) did not in truth believe Mr Shasore SAN was corrupt. On 21 November 2017, Mr Shasore SAN was engaged by Nigeria to represent the Ministry of Power in a $2.4bn arbitration claim by Sunrise Power and Transmission Co. His appointment was approved by Mr Malami SAN on 6 March 2018 and formally confirmed by Mr Malami SAN on 18 March 2018. On 1 September 2021, Mr Malami SAN approved the engagement of Mr Shasore SAN’s firm to act for Nigeria in a second arbitration brought by Sunrise, resulting from Nigeria’s failure to comply with the settlement agreement. The agreed fee was up to US$1.15m. Mr Malami SAN has not explained to this Court how these events are consistent with a belief on his and Nigeria’s part that Mr Shasore SAN had been corrupt, in his professional work for Nigeria in the Arbitration against P&ID” the Justice held.

In a related development, President Bola Tinubu applauded the judgment rendered by Justice Robin Knowles.

In a statement by his media aide, Ajuri Ngelale, on Monday, Mr Tinubu commended the UK court for prioritising the merit of the case above all other considerations.

The statement said, “Following Mr Knowles’ dismissal of the $11.5 billion value of the award plus accumulated interest, previously won by P&ID over a failed 2010 deal to allegedly build a gas processing plant, on the grounds that the award was obtained by fraud, President Tinubu commends the UK Court for prioritising the merits of the case above all other considerations.

“This landmark judgment proves conclusively that nation-states will no longer be held hostage by economic conspiracies between private firms and solitarily corrupt officials who conspire to extort and indebt the very nations they swear to defend and protect.

“Today’s victory is not for Nigeria alone. It is a victory for our long-exploited continent and for the developing world at large, which has for too long been on the receiving end of unjust economic malpractice and overt exploitation.

“Nigeria is appreciative of the tremendous efforts of the defence team and acknowledges the role of the Federal Ministry of Justice and the Office of the Attorney-General in the process of defending Nigeria’s interest in this case.”

Similarly, Nigerians from social media have also hailed the judgement describing it as a victory for the country.

At the time of filing this report, the hashtag #CongratulationsToNigeria is trending and has already gathered over 10k posts.