UK Court Ruling On $9.6 Billion Nigeria’s Assets Seizure: FG Says No Cause For Alarm.




 

The Federal Government has assured Nigerians that everything is being done to stave off seizure of its assets.

Nigeria’s Information Minister, Lai Mohamed gave the assurance on Tuesday at a news briefing over a British court ruling that Process and Industrial Development (P&ID) Ltd “can seize $9.6 Billion Nigerian assets “, over botched contract entered between it and Ministry of Petroleum Resources in 2010.

The minister disclosed that after the arbitration award, Nigeria made several attempts to negotiate the award and resolve the issue amicably with P&ID but to no avail which led to the enforcement.

The Federal Government, the Minister said, viewed with serious concern the underhanded manner in which the contract was negotiated and signed.

According to Mohammed, some vested interests in the past Administration colluded with their local and international conspirators to inflict grave economic injury on Nigeria and her people.

While steps had been taken by Nigeria’s anti graft agencies to unravel circumstances surrounding the botche contract, the Minister urged Nigerians to be rest assured every necessary step was being taken by the Federal government to appeal the UK court for stay of execution.

He gives the back ground of the issue.

BACKGROUND

  1. Gentlemen, the judgment that was delivered on Friday, 16 August 2019 is a fallout of the contract purportedly entered into in 2010 between the Federal Ministry of Petroleum Resources and P&ID.

Please note that in the 20-year Gas Supply Processing Agreement (GSPA) purportedly entered into with the P&ID in 2010, the company never performed as agreed.

  1. With the contract having suffered a setback, the case went to arbitration.

P&ID’s claim in the arbitration proceedings was mainly for the loss of profit for the 20-year term of the GSPA. In an interim award, the Arbitration Tribunal ruled that Nigeria has breached the contract. Though Nigeria successfully applied to have that award set aside by the Federal High Court in Lagos, the Tribunal ignored this decision.

  1. Consequently, on 31 January 2017, the Tribunal rendered its final award against the Ministry of Petroleum Resources in the sum of 6.597 Billion U.S. Dollars, together with .pre-award interest at the rate of 7% per annum, effective from 20 March 2013 and post-award interest at the same rate from the date of the award. This interest increased the size of the award to US$9.6 Billion.

WHAT NIGERIA DID AFTER THE ARBITRATION AWARD

  1. After the arbitration award in 2017, Nigeria made several attempts to negotiate the award and resolve the whole issue amicably with P&ID but to no avail, which eventually led to the enforcement proceedings instituted, simultaneously, by the company in the UK and the US.
  2. The Federal Government then engaged the services of the US law firm of Curtis, Mallet-Prevost, Colt & Mosle LLP, which took steps to defend the proceedings in the US District Court of Columbia to dismiss

P&ID’s application for the enforcement of the award on the grounds that Nigeria, as a sovereign state, has an absolute right to obtain an authoritative determination of its sovereign immunity. While Nigeria has recorded some successes in that case in the US, the proceedings are currently on-going in the US and the Federal Government will ensure that its interest and that of the people of Nigeria are vigorously defended.

  1. It is worth mentioning that in challenging the award, the Federal Government relied upon an expert report analyzing the damages given to the P&ID. The expert concluded that the damages were clearly unreasonable and manifestly excessive and exorbitant; went far beyond any legitimate protection of the commercial interest of the P&ID were completely wrong and obviously unjustifiable; and that the damages overcompensated P&ID on a frankly gargantuan scale and imposed a punitive award on Nigeria.
  2. It was on this ground and others that the Federal Government took all available steps to resist enforcement before the courts of the United Kingdom (UK). Unfortunately, the UK Court has recognized the award and given the company the authorization to seize Nigeria’s assets.

THE CONTRACT

  1. We want to place on record that the Federal Government views with serious concerns the underhanded manner in which the contract was negotiated and signed. Indications are that the whole process was carried out by some vested interests in the past administration, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people.
  2. In view of the above, and in an attempt to unravel the circumstances surrounding the entire transaction, the Honorable Attorney General of the Federation, with the approval of Mr President, has requested the Economic and Financial Crimes Commission (EFCC), the National Intelligence Agency (NIA) and the Inspector General of Police IGP) to conduct a thorough investigation into the company, the circumstances surrounding the agreement and the subsequent event, which includes commencing a full-scale criminal investigation.

CONCLUSION

  1. Gentlemen of the press, despite the recent recognition of the award by a UK court, and contrary to some reports, Nigeria IS NOT about to lose any of its assets to P&ID. There is no imminent threat to Nigeria’s assets!
  2. In the first instance, the enforcement of the award cannot even commence now because the Judge in the UK court ordered that the P&ID cannot enforce the judgment against Nigeria until after the court resumes from its current vacation.
  3. What this means is that enforcement action cannot begin until further hearing on the matter, which will take place on a date to be determined by the court upon its resumption.
  4. The Federal Government therefore wishes to use this opportunity to assure Nigerians that there is no immediate threat to Nigeria’s assets as has been wrongly interpreted by a section of the media.
  5. Nigerians should be assured that the Federal Government is taking all necessary steps to appeal the decision of the UK Court, to seek for a Stay of Execution of the decision, to defend its rights and to protect the assets of the people of the Federal Republic of Nigeria.
  6. Nigerians should please be assured that the Federal Government will strongly avail itself of all defences customarily afforded to sovereign states under the United Kingdom Sovereign Immunity Act to stave off any enforcement of the award”.

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Posted by on 28/08/2019. Filed under Energy. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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