The Nigerian government has provided a bond of $200 million to a court in the United Kingdom, as part of efforts to overturn the $9.2 billion judgement debt against it, in favour of an Irish firm, Process and Industrial Development (P&ID).
The Attorney General of the Federation and Minister of Justice, Abubakar Malami, said this in a statement on Thursday.
He described the development as a positive step for Nigeria to set aside the judgement.
He said the decision to provide the bond emanated from the British court’s acceptance of a request from Nigeria for a variation of the September decision of the court.
The court had ordered Nigeria to pay $200 million to the court, while permitting the stay of execution of the judgement.
The statement also said the Nigerian government “does not plan to forfeit the guaranteed sum to the High Court in UK.”
“The Federal Republic of Nigeria today provided the English High Court with a bank guarantee as a security in compliance with the Court order. This variation in security, which was proposed by Nigeria as an alternative solution during a procedural hearing on 22nd November, has been accepted by the Court and P&ID. The deadline was extended by the Court to the 28th November.
“The provision of today’s security is a positive step forward for Nigeria to overturn the injustice of the US$9.6 billion award, which was a direct result of fraud and corruption.”
The statement reiterated the point raised by the Nigerian government that the contract was fictitious.
It said Nigeria was expending efforts towards ensuring the nullification of the controversial contract.
“Over the last few weeks, investigations have revealed a very serious fraud, bringing into question both the legitimacy of the GSPA (gas supply and processing agreement) and the subsequent award itself.
“As a result of these investigations, the Federation has recently expanded its legal team, which will now enable us to launch in full our challenge against the fraudulently procured agreement and award.”
The UK Business & Property Courts (the Commercial Court), presided by Justice Butcher, on August 16 granted P&ID’s request to enforce a March 20, 2013 award against Nigeria by a District Circuit Court in Washington DC.
The $6.6 billion Nigeria was ordered to pay had accumulated to $9.6 billion due to interests accrued over the period.
Following an application by the Nigerian government in September, the court granted a stay of execution of the judgement preventing the seizure of Nigerian assets while its legal challenge was pending.
The court, however, ordered it to pay $200 million to the court within 60 days to ensure the stay.
P&ID approached the court to seek compensation after accusing the Nigerian government of breaching a 2010 gas contract agreement.
The contract for gas supply and processing was signed by the administration of late President Umaru Yar’Adua and P&ID.
The contract was to build gas processing facilities around Calabar, Cross River State, and the government was to supply wet gas up to 400 million standard cubic feet per day.
The agreement was designed to fail as key elements necessary for its success were missing.
The court initially granted the firm an arbitral award of $6.6 billion.
But, the figure rose to about $8.9 billion with an additional $2.3 billion in accumulated interest at 7 per cent rate, after Nigeria refused to enter an appeal for over five years.
The company said the accumulated interest was based on claims that the damages were calculated at the current value of 20-year income accumulated since 2013 when the ruling was first given.