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London court nullifies $11 billion claim against Nigeria in P&ID gas project dispute

High Court Cites Bribery and Non-disclosure, Marking a Historic Victory for Nigeria and a Blow to Economic Exploitation

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A London court has dismissed an $11 billion damage claim against Nigeria by Process & Industrial Developments Limited Gas Company (P&ID), stemming from a collapsed gas processing project in Cross River, Nigeria. The ruling, delivered by the High Court in October, revealed that P&ID had engaged in bribery and failed to disclose these activities during arbitration, providing a significant legal victory for Nigeria.

The potential payment of $11 billion, approximately one-third of Nigeria’s foreign exchange reserves, was averted as the court established that P&ID had paid bribes to a Nigerian oil ministry official in connection with the 2010 gas contract. The project’s subsequent failure led P&ID to take Nigeria to arbitration.

Described by Nigerian President Bola Tinubu as a blow against economic malpractice and the exploitation of Africa, the court’s decision offers relief to Africa’s largest economy grappling with mounting debt, high inflation, and unemployment.

P&ID, seeking a return to arbitration, faced another setback as Judge Robin Knowles ruled on Thursday to dismiss the award immediately. The judge denied P&ID permission to appeal, effectively concluding the case, as the company cannot apply for permission from the Court of Appeal.

A London-based spokesperson for the Nigerian government stated, according to Reuters, that the decision “marks the conclusion of a historic victory for the people of Nigeria.”

The legal battle originated from a 2010 gas deal gone awry between Nigeria and P&ID, a British Virgin Islands-registered firm founded by two Irish businessmen. The company had initially been contracted for military repairs, but in 2010, it secured a 20-year contract to process gas for Nigeria’s domestic energy market.

Following arbitration in 2012, P&ID was awarded $6.6 billion, which later escalated to over $11 billion with interest. However, the recent court ruling seems to definitively quash the company’s avenues for legal recourse in the dispute.

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