That was the question discussed by the Nigerian Bar Association, Ajuba Branch-Unity Bar, in a Section of Business Law webinar that considered a recent ruling by London’s Commercial Court, moderated by Omakwu Marx Ikongbeh, principal of Everlaw Associates.
That ruling saw High Court judge, Sir Ross Cranston, allow Nigeria to make an exceptional legal challenge to a multi-billion dollar arbitration award entered against it - more than three years ago - after he found that Nigeria established a strong case for fraud, despite “unprecedented’ and “very significant” delays in doing so.
The ruling, in the P&ID vs Nigeria litigation, related to a long-running, multi-jurisdictional legal dispute between the Federal Republic of Nigeria and offshore shell company P&ID, over a gas supply and processing agreement (GSPA).
The judge had found: “Nigeria has established a strong prima facie case that the GSPA was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria”, adding there was a strong prima facie case as to perjured evidence, given to the tribunal, as well as allegations – vigorously denied – as to the conduct of Nigeria’s (then) advocate, Olasapo Shasore SAN.
In a statement made by Shasore, (shared on LinkedIn by partner, Duncan Bagshaw, of London firm, Howard Kennedy, one of the participants in the webinar) he said he had “made every effort to defend and vindicate my client at every stage with minimal tools and with very little support from the government itself”, detailing the work undertaken to protect Nigeria.
However, Cranston ultimately concluded: “Nigeria has made a good case that, at the time it took part or continued to take part in the arbitration, it did not know and could not with reasonable diligence have discovered the grounds it now advances,” such that the allegations of fraud should be tested in court.
A spokesman for the Federal Attorney-General said the ruling was “a major victory in our ongoing fight against the vulture-fund-backed P&ID,” adding “We are firmly committed to overturning the award – no matter how long it takes – to ensure that this money goes towards Nigeria's future, not into the pockets of millionaires trying to exploit our country.”
In the webinar, hosted by Marx Ikongbeh, the panel discussed the ruling, its ramifications, and the considerable difficulties experienced by Nigeria in seeking to persuade the court to overlook UK arbitration legislation, which prizes speed and finality, as well as its significance to the Nigerian energy industry – and Nigerian lawyers.
Common to all speakers was the awareness cited by Cranston that, “fraud has been endemic … at the very highest levels, and especially in the oil and gas sector,” while the Nigerian media having reported on the decision extensively, given the allegations made.
Bagshaw outlined the lengthy arbitral and procedural timelines that had led to the challenge, noting that normally, awards would be enforced within 28 days of the award being made. Cranston’s ruling, he noted, allowed Nigeria to challenge the award, and for its case to be heard; Nigeria had also sought relief from sanctions enforcing the award, and an appeal against it, both now stayed.
Kester Oyibo, of Compos Mentis Chambers, for his part, outlined to the audience the significance of the deal, the commercial ramifications of such deals for Nigeria and the energy industry, and outlined the developing story of Nigerian policy towards such oil deals, as well as oil and gas industry practice, noting this was an “evolving policy” of Nigeria at the time.
Emilia Onyema, a reader in international commercial law at SOAS, University of London, was on hand to discuss the procedure and practice adopted by the arbitral tribunal, noting the split between liability and quantum stages, while Ikongbeh compared how the Nigerian courts had, and do, deal with such matters, making one ruling that combines both elements, which was arguably more efficient.
Onyema also discussed how the figure of £10 billion had been reached, explaining the process by which damages, which should be foreseeable, and flow from the breach, would suffer loss, and the role of expert witnesses in projecting the same, while Oyibo discussed the pricing considerations that would have been discussed at the beginning of the dispute arising.
The public perception of the dispute in Nigeria was also discussed; as Ikongbeh said, people were entitled to discuss issues of public concern, while Onyema’s review of the various awards, including Nigeria’s dissenting ruling, and the Nigerian court rulings in the case, were positively considered, and also compared to the English proceedings.
Cranston’s ruling, noted Onyema, had “an air of authority” and “strong credibility”, saying that, for Nigeria, “the key thing is how to progress – how do we improve public discourse on the contracting system.” To her “arbitration [was] not the problem,” with both judges and arbitrators in Nigeria and London keen to ensure that proceedings did not camouflage questionable contracting practices.
Bagshaw told his Nigerian audience that the award had not yet been set aside; nor was there a final ruling on fraud, merely a prima facie case that there was one. That, he said, would need a ruling on the balance of probabilities, but finding a case to answer was a long way from reaching final conclusions.
Long term, said Oyibo, P&ID was “an unprecedented case”, noting statements that there had been “a fraud on the nation”. While fraud, he said, should be challenged, so parties could not benefit from it, this was an exceptional case, resulting in the third biggest arbitral award made – ever. Like his fellow panellists, he agreed that justice required the allegations should be looked at.
With a lively exchange of questions from participants to close, one thing was clear; Nigeria is not out of the woods, yet, but Cranston’s ruling has shone new light on the case.
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