$9.6b judgment: How P&ID snubbed Buhari’s $600m offer

Brendan Cahill: one of the owners of P&ID: snubbed FG’s improved offer of $600m

A fact-sheet now in circulation has debunked accusations by Messrs Process and Industrial Developments (P&ID) that Nigerian officials were indifferent to their offers to settle, before a UK commercial court gave it a humongous and world record $9.6billion award on a failed gas supply deal.

According to the fact-sheet, President Muhammadu Buhari and Vice-President Yemi Osinbajo separately approved negotiation with Messrs Process and Industrial Developments (P&ID) after the Arbitration Tribunal awarded $6.597billion to the company. The two leaders at various times offered $250million and an improved offer of $600million to the Irish company.

The Vice President gave the approval on April 18, 2017, following the recommendations of the Attorney-General of the Federation (AGF) and Minister of Justice, Mallam Abubakar Malami (SAN), which included a negotiation with P&ID.

Also, President Muhammadu Buhari directed the Federal Government’s team to meet with P&ID counsel on July 12 and 13 in New York.

Based on Osinbajo’s approval, the AGF and the then Minister of State for Petroleum Resources Dr. Ibe Kachikwu, and a delegation along with counsel Chief Bolaji Ayorinde, SAN, on May 16, 2017, met with representatives of P & ID and its counsel to negotiate the judgment debt.

The government team initially on May 16, 2017 succeeded in negotiating the judgment debt from $8.4billion, to which it had risen, to $600million.

But P & ID rejected the offer on the grounds that what was agreed on to be executed was a Draft Stay of Enforcement Agreement and not a Settlement Agreement as proposed by the Federal Government.

The Federal Government offered $250million which P&ID rejected.

The document said although a former Attorney-General of the Federation, Mr. Mohammed Bello Adoke (SAN), recommended an amicable settlement with P&ID, the “ proposed settlement broke down.”

The government said the “settlement could not be reached before the time for report of settlement elapsed, therefore proceedings resumed at the Tribunal for determination.”

The fact-sheet gave insight into how the nation ran into a deeper crisis on the gas agreement with P&ID.

“The above -mentioned arbitration was commenced against the Ministry of Petroleum by Messrs Process & Industrial development (P&ID), a limited liability company, with which the Ministry of Petroleum signed a Definite Agreement dated 11th January 2010 for Accelerated Gas Development in OML 123 and 67 for a period of 20 years.

“In the year 2009, the Federal Government of Nigeria signed a Definite Agreement for Accelerated Development Policy with eight (8) companies, one of which was Process & Industrial Development Company (P&ID).

“Following the inability of the parties to implement the Agreement as envisaged, P&ID commenced the above arbitration initially claiming the sum of US$1.9 Billion against the ministry of Petroleum, and thereafter increased its claim to US$5.9Billion and has now recently submitted a final claim of US$8.1Billion.

“The former Honourable Attorney General of the Federation (Adoke SAN) engaged the services of Olasupo Shasore, SAN, of Twenty Marina Solicitors LLP to represent the Federal Government in the matter.

“Shasore raised a preliminary Objection challenging the competence of the action which was overruled by the arbitration Tribunal in its ruling of 3rd July 2014. The Ministry of Petroleum Resources also engaged the services of United Kingdom (UK)-based law Firm Stephenson Harwood to apply for extension of time within which to the Federal Government can challenge the arbitration award dated July 2014 in the UK.