9.6BIL DOLLAR FINE: FG RAISES 13 GROUNDS WHY BRITISH COURT SHOULD DISREGARD P I&D CASE SHOWS FRAUDULENT CLAUSE IN AGREEMENT

Twenty Four hours to its sitting, the Federal Government team has raised 13 grounds on why a London court should reverse the $9.6billion judgment secured against Nigeria by Process and Industrial Developments (P&ID).

The delegation has also  exposed the trick clause used by P&ID to secure the Gas Supply and Processing Agreement (GSPA), which led to  the controversial arbitration award.

The government has discovered that the Memorandum of Understanding on the gas contract was signed in 2009 by P&ID Nigeria Limited with the Ministry of Petroleum Resources.

But, a trick clause was inserted in the MoU, which allowed the British Virgin Island (BVI)- registered P&ID to replace the original contractual party, P&ID Nigeria Limited, to sign the contract on January 11, 2010.

The team said the P&ID case cannot stand because the contract was fraudulent.

According to sources, who spoke with The Nation, the government was able to discover the supplanting of P&ID Nigeria Limited in the course of the ongoing probe by the Economic and Financial Crimes Commission (EFCC), the Police and others security agencies.

The latest evidence is one of the strongest points to be tabled by Nigeria’s lawyers tomorrow when the legal battle on the arbitral award begins.

Nigeria is also insisting that the contract was not  vetted by the office of the Attorney- General of the Federation and it was not taken to the Federal Executive Council (FEC) for  approval.

One of the sources said: “We are raising 13 grounds  of defence on Thursday against P&ID  for a stay of execution and a declaration of the arbitral award as a nullity, based on substantial evidence of fraud and economic sabotage.

“Of importance, detectives have  discovered that the MoU for the GSPA was entered into with the Ministry of Petroleum Resources  by P&ID Nigeria Limited and the contract signed by P&ID of the British Virgin Island.

“It was a contract filled with deception, with an ultimate target of swindling Nigeria. Our legal team has taken judicious notice of this amorphous clause.”

The source added: “A contract of that magnitude cannot be valid until it has been vetted by the office of the Attorney- General of the Federation and taken to the Federal Executive Council for approval. None of these was done. The sham contract was also signed in contravention of the infrastructural Regulatory Commission Act and Public Procurement Act.

”While the initial MOU for the project was signed in 2009 by P&ID Nigeria Limited and the Nigerian government (Ministry of Petroleum Resources), a ‘trick’ clause in the MoU was curiously activated that allowed British Virgin Island (BVI) registered P&ID to replace the original contractual party, P&ID Nigeria Limited, to sign the contract in January 11, 2010.

“ P&ID incorporated in the British Virgin Island is a Shell Company that has no history of any business except the phantom gas supply project in Nigeria. There was no board resolution approving the assignment of the contractual interest to the BVI registered entity.

” P&ID never kick started the construction of the project facility, it claimed to have incurred $40 million in preliminary expenses. The Central Bank of Nigeria (CBN) has confirmed that there is no record of such investment, or any transaction related to the gas project in Nigeria by P&ID from 2010 to date.

“There is no proof of any initial commitment by P&ID toward the execution and implementation as its own obligations as stipulated in the agreement signed in 2010.

“P&ID could not meet any of the requirements the company was asked to provide. They include:

  • Updated proposal for the gas processing and utilisation
  • Identification of project site
  • Land acquisition
  • MoU with other agencies pertaining to gas processing in Nigeria
  • Evidence of financial capacity

Another source, who is privileged to be involved in the investigation and legal battle against P&ID, said the contract was a sham dotted with bribery and corruption.

The source said: “Suspicious payments were made to Mrs. Grace Taiga who, as the Legal Director in the Ministry of Petroleum Resources, was vested with the responsibility of providing legal counsel to the Federal Government and ensuring that the interest of the country was adequately protected in the contract. Industrial Consultants International limited, a company associated with P&ID, made two transfers to Ms. Taiga in 2017 and 2018. These transfers could only have been made in appreciation of the ‘good deed’ done to the company by Mrs. Taiga, which has entitled her to agreed or perpetual benefits.

”There was no budgetary provision for the implementation of the GSPA in the Ministry of Petroleum Resources in 2010 while the P&ID did not have any licence to deal in petroleum product.

“The firm also failed to file tax returns and pay VAT to the Federal Inland Revenue Service as required by law.

”The unprecedented $9.6 billion in arbitration award to P&ID is an unreasonable reward to a company that has done nothing more than to engage in fraud and economic sabotage.

“Not only does this run against the course of justice, but more importantly, failing to recognize this sham would bring harm and hardship to Nigeria, as well as the wider region.

”Two directors of P&ID in Nigeria have been convicted of charges of money laundering and economic sabotage. Muhammad Kuchazi, commercial director of P&ID, the British Virgin Islands, and Adamu Usman, a director of the company in Nigeria, pleaded guilty to 11 counts of economic sabotage and money laundering at a Federal High Court in Abuja last Thursday.”

It was learnt that the government delegation in the United Kingdom has so far succeeded in setting the records straight to stakeholders, investors and the media.

Another source said: “We have been going round in the last three days to meet with the critical segments of the UK society. We discovered that many stakeholders did not have balanced information on what led to the $9.6billion, which was a judicial ambush.

”The dispute that led to Arbitration between the Nigerian government (Ministry of Petroleum Resources) and the Irish engineering company P&ID arose from a 20-year Gas Supply and Processing Agreement (GSPA) entered in 2010 between the two parties in respect of an accelerated gas development project in Nigeria’s OMLs 67 and 123.

“P&ID’s claim in the arbitration proceedings was mainly for loss of profit for the entire 20-year term of the GSPA, initially claiming the sum of  $1.9 billion and later increasing its claim to  $5.9 billion.

“The Arbitral Tribunal on 3lst January, 2017, rendered its Final Award against Nigeria (Ministry of Petroleum Resources) in the sum of  $6.597 billion together with pre-award interest at the rate of seven per cent per annum effective from 20th March 2013 and post-award interest at the same rate till date of payment. This interest has increased the size of the award to $9.6 billion.

“In arriving at this decision, the tribunal ignored the ruling of a Federal High Court in Lagos that the award be set aside.

“On Friday 16 August 2019 at the United Kingdom’s Business & Property Courts (the Commercial Court), Mr. Justice Butcher granted P&ID’s enforcement application which converts the arbitration award secured by P&ID into a domestic UK judgment against Nigeria.”

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