Olisa Agbakoba, Senior Partner and Head of the Arbitration and ADR practice group at Olisa Agbakoba Legal, has cautioned Nigerian government to be vigilant when entering into international contracts to prevent a recurrence of the legal battle with Process & Industrial Developments (P&ID) Limited.
Agbakoba, who also holds the position of chairman in the national arbitration policy committee established by the former Attorney General of the federation, Abubakar Malami, expressed his concerns in an exclusive interview with BusinessDay.
During the interview, Agbakoba commended the Nigerian government for its successful reversal of the arbitration award, emphasizing the rarity of such an achievement. He remarked, “We are fortunate to have emerged from this situation because overturning an arbitration award is no easy task. This marks only the third instance in UK history where an award has been overturned, and I extend my congratulations to the Nigerian government for their outstanding efforts,” Agbakoba conveyed in an interview with The BusinessDay Exclusive, a program that addresses significant national issues and features prominent social and economic commentators.
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Agbakoba went on to address a broader issue facing Nigeria, emphasizing that the country is embroiled in approximately 1,000 pending cases globally due to the government’s perceived lack of commitment to honouring its contracts. He attributed this problem to inconsistent contract practices and policy reversals by successive administrations. He advised the Nigerian government to treat contract agreements with greater seriousness and review the way policies are overturned.
The caution comes in the wake of the recent developments in the legal battle between Nigeria and P&ID. On October 23, 2023, the Business and Property Court in London, presided over by Justice Robert Knowles, officially ended the enforcement of an $11 billion arbitration case initially awarded to P&ID on January 31, 2017, by the London Court of International Arbitration (LCIA), under the jurisdiction of Justice Christopher Butcher. The initial arbitration ruling had ordered Nigeria to pay $6.6 billion to P&ID for an alleged breach of contract.
A legal dispute originating in January 2010 stems from a Gas Supply and Processing Agreement between the Nigerian government, led by the late President Umaru Yar’Adua, and P&ID. The agreement unraveled by August 2012 due to P&ID’s failure to meet expectations, leading to their accusations of Nigeria’s failure to provide the necessary gas supply. In response, P&ID initiated legal action, claiming a breach of contract.
