P&ID v Nigeria: the gas contract awards and the 2023 fraud ruling
- Forum
- Arbitration under the Nigerian Arbitration and Conciliation Act, seated in London 4
- Parties
- Process and Industrial Developments Ltd and the Federal Republic of Nigeria (Ministry of Petroleum Resources) 1,4
- Contract
- Gas Supply and Processing Agreement of 11 January 2010 1
- Award amount
- US$6.6 billion plus 7 percent interest, Final Award of 31 January 2017 1
- Remedy
- Awards set aside in their entirety by order of 21 December 2023 2
- Status (22 October 2026)
- Awards set aside, leave to appeal refused by the judge 2
The contract and the awards
P&ID and Nigeria signed the Gas Supply and Processing Agreement (GSPA) on 11 January 2010 1. The arbitral tribunal fixed the juridical seat in London in Procedural Order No. 12 of 26 April 2016 4.
The tribunal's Award on Liability of 17 July 2015 found that Nigeria committed a repudiatory breach 1. The Final Award of 31 January 2017 ordered Nigeria to pay US$6.6 billion with interest at 7 percent 1. The High Court said interest had taken the sum above US$11 billion 1. Chief Ojo SAN dissented 1. italaw records that his dissent proposed limiting the compensable period to three years and an award of US$250 million 4.
| Date | Step |
|---|---|
| 11 January 2010 | GSPA signed 1 |
| 17 July 2015 | Award on Liability 1 |
| 24 May 2016 | Federal High Court in Lagos order purporting to set aside the liability award, as described by italaw 4 |
| 31 January 2017 | Final Award of US$6.6 billion plus interest 1 |
| 16 March 2018 | P&ID petition to confirm the award in the US District Court for the District of Columbia 4 |
| 23 October 2023 | English Commercial Court finds the awards were obtained by fraud 1,3 |
| 21 December 2023 | Order setting aside both awards 2 |
Nigeria's fraud challenge
Nigeria challenged the awards under section 68 of the Arbitration Act 1996 3. It alleged bribery, corruption and perjury across the arbitral process (judgment, para. 11) 1. It alleged bribery by P&ID and that some of its own lawyers, including two Leading Counsel, were corrupted (para. 12) 1.
P&ID described Nigeria's case as false and dishonest (para. 12) 1. The hearing ran from January to March 2023 1.
What the court found
The judge was "quite satisfied" that payments made in December 2009 and March 2010 for the benefit of Mrs Grace Taiga, a Nigerian official, were bribes and were deliberately kept secret from Nigeria (paras. 170 to 172) 1. He found she understood they were meant to make her favour P&ID (para. 173) 1.
He found that P&ID, Mr Michael Quinn, Mr Cahill and Mrs Taiga "were dishonest and their motivation was corrupt, applying the standards of ordinary decent people" (para. 177) 1. He said the case touches the reputation of arbitration as a dispute resolution process (para. 14) 1.
The court did not accept every allegation. It was not persuaded that some unexplained cash movements proved bribes to Nigerian officials (para. 179) 1. It rejected the claim that Mr Cahill lied throughout, and it declined to draw adverse inferences from missing witnesses (paras. 21 and 30) 1.
italaw's summary of the judgment says the court held that the serious irregularities caused substantial injustice to Nigeria, that P&ID's co-founder gave knowingly false evidence to the tribunal, and that Nigeria could not have found the fraud with reasonable diligence during the arbitration 3.
The order of 21 December 2023
In a consequential order of 21 December 2023, Mr Justice Robin Knowles set aside the Award on Liability and the Final Award in their entirety, according to italaw's summary 2. The order refused leave to appeal, set aside the earlier enforcement order and dismissed P&ID's enforcement application 2. It ordered P&ID to pay Nigeria's costs, with an interim payment of £20 million within 28 days 2.
No source opened for this page says whether the £20 million has been paid 2.
Common questions
Why were the P&ID awards against Nigeria set aside?
The English Commercial Court found on 23 October 2023 that the awards were obtained by fraud, including bribes to a Nigerian official 1,3.
How much was the P&ID award?
The Final Award ordered US$6.6 billion plus 7 percent interest, which the court said had grown to more than US$11 billion 1.
Who was the judge in Nigeria v P&ID?
Mr Justice Robin Knowles CBE of the Commercial Court 1.
Can P&ID still enforce the awards?
The order of 21 December 2023 set aside both awards and dismissed P&ID's enforcement application in England 2.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email hello@arbitrationoutcomes.org with the official link.
Sources
- The National Archives: The Federal Republic of Nigeria v Process and Industrial Developments Limited, 2023 EWHC 2638 (Comm) (23 October 2023)
- italaw: Order of the High Court of Justice of England and Wales, P&ID v. Nigeria (21 December 2023)
- italaw: Judgment of the High Court of Justice of England and Wales, P&ID v. Nigeria (23 October 2023)
- italaw: case page, P&ID v. Nigeria
Related
- Setting aside an arbitration award
The grounds and deadlines for asking a court to set aside an award under the UNCITRAL Model Law and the English Arbitration Act 1996, with a case example.
- The corruption defence in arbitration
How states raise bribery against investor claims and awards, with what tribunals and courts decided in World Duty Free, Metal-Tech and Nigeria v P&ID.
- Commercial and investment arbitration compared
How contract-based commercial arbitration differs from investor-state arbitration on consent, review, transparency and enforcement, with official sources.
- Enforcing arbitration awards against states
How ICSID and New York Convention awards are recognised, and how state immunity from execution limits what assets can be seized in the UK and US.