Explainer: What you should know about the P&ID vs Nigeria’s N11 billion legal battle
Nigeria and Nigerians heaved a sigh of relief as a decade-long legal battle against P&ID received a favourable judgment on the 23rd of September, 2023, which prevented the loss of 11 billion dollars by Nigeria.
This piece gives an insight into the who, what, why, and the implications of the lawsuit.
P&ID: A Closer Look
Process and Industrial Developments Limited (P&ID) is a shell company located in the British Virgin Islands.
Available website information projects P&ID as an engineering and project management company founded and led by Michael Quinn and Brendan Cahill who have over 30 years experience of in project management and execution in Nigeria.
P&ID is mostly owned by Lismore Capital Limited, an obscure entity in the Cayman Islands. The remaining 25% of the company was recently acquired by VR Advisory Services Limited, a powerful vulture fund.
The Nigerian government identifies P&ID as being co-founded in 2006 by a music producer from Ireland who had no “substantive experience in managing any notable infrastructure projects”.
The founders were linked to other corrupt activities in Nigeria and provided false information about their experience.
Shell also confirmed that co-founder Michael Quinn had no prior oil and gas project experience.
What is the bone of contention?
In 2010, Nigeria and P&ID agreed to a 20-year gas supply and processing deal. Nigeria would provide wet gas, and P&ID was to process and return 85% as usable lean gas. P&ID was to construct processing plants, which they never did.
In 2012, P&ID claimed the Nigerian government breached the agreement and sought around $6 billion in lost profits which they won.
However, Nigeria contested the 2017 arbitration ruling, which now stands at nearly $11 billion with interest, claiming P&ID obtained the contract through bribing officials.
Nigeria argues it should not be obligated to pay because P&ID, allegedly obtained the contract through bribing government officials, which P&ID denied.
The billion-dollar lawsuit
The implications of losing $11 billion which is a substantial portion of Nigeria’s GDP and national budgets are huge.
Nigeria a developing country, with a large impoverished population of 200 million, faces serious economic challenges.
The World Poverty Clock, 2023 data reveals that “Nigeria has the awful distinction of being the world capital of poverty, with 71 million people living in extreme poverty today and a total of 133 million people classed as multidimensionally poor according to National Bureau of Statistics data” and this shows how terrible losing the court case would be for Nigeria, even with inflation and increased cost of living.
During the 74th United Nations General Assembly in September 2019, President Buhari discussed the P&ID case, underscoring its importance alongside topics like climate change, international security, healthcare, and poverty.
He conveyed Nigeria’s determination to prosecute the P&ID “scam”, a significant threat attempting to defraud the nation of billions of dollars.
Latest development: Nigeria’s victory
In September 2020, the London Commercial Court permitted the Federal Republic of Nigeria to challenge the $11 billion arbitral award due to exceptional circumstances and evidence of substantial fraud.
The September 23 judgment on the case was ruled in favour of Nigeria.
The judge, Sir Ross Cranston, the judge, stated that Nigeria had a strong case of bribery in obtaining the agreement and perjury in the arbitration. He emphasized that Nigeria didn’t know about these grounds earlier.
This is seen as a major victory for both Nigeria and the legal system. Enforcing the award would have made English Courts unwittingly complicit in this large-scale fraud against the Nigerian people according to Sir Ross.
Also, the Nigerian economy was saved from what would have been a historic loss, which would have added to the current hardship and might not be easy to recover from.