Nigeria’s bid to overturn a “sham” $11 billion arbitral award to P&ID

30 January, 2023 | 4 minute read

One of the biggest arbitral enforcement disputes kicked off in London last week, as Nigeria seeks to overturn an award worth $11.1 billion obtained by a small offshore company following a failed gas project.

The court is confronted with two conflicting versions of events. Nigeria claims that Process & Industrial Developments (P&ID) not only procured this lucrative gas contract through bribery, but then corrupted Nigeria’s legal team to cash out its ill-gotten gains through sham arbitration proceedings. But P&ID told the court this allegation of a “vast premeditated fraud” was “a conclusion in search of facts”. The company claims the real reason Nigeria lost the arbitration is not because of collusion by its lawyers, but rather because of its own incompetent handling of the case.

With the scene set for a spectacular trial, here are three burning questions we’ll be looking to answer as the evidence unfolds over the coming weeks.

Was the gas project built on bribes and lies?

Nigeria’s case is that the arbitral awards were procured through an “audacious and ongoing fraud” that began with the award of a gas processing contract to P&ID in 2010. Key officials were allegedly bribed to ensure P&ID – a BVI company with no significant track record in the industry – would get the contract. This includes long-running payments to Ms Grace Taiga, the legal director of the Ministry of Petroleum Resources (MPR) at the time, as well as the striking allegation that Mr Taofiq Tijani, a senior technical assistant at the MPR, deliberately overlooked shortcomings in P&ID’s bid after receiving $50,000 cash in a black bag.

But the ambition of this alleged bribery scheme is said to have gone much further. According to Nigeria, P&ID continued to pay and promise bribes in order to sustain a lie about its ability and readiness to perform the gas contract. A key question that the court will have to decide is whether the arbitral award was procured on the basis of perjured evidence by Mr Michael Quinn, the late co-founder of P&ID, about their progress on the gas project.

In rejecting these bribery claims, P&ID explains certain payments as being customary personal gifts or benefits to public officials, and suggests Mr Quinn had a particularly close relationship with Ms Taiga. Far from misleading the tribunal as to its progress, P&ID claims it had a “genuine and long-standing desire” to complete a gas project in Nigeria.

Were lawyers behaving badly?

At the centre of the complex web of corruption allegations in this case are lawyers – from successive legal directors at the MPR and members of Nigeria’s legal team, to the London-based lawyers acting for and advising P&ID. Nigeria claims that P&ID corrupted their legal team, paying bribes to divide their loyalty and obtain privileged documents that gave the company a “real-time inside track” into their litigation strategy.

The first witness to take the stand this week was Mr Seamus Andrew, an English solicitor who acted for P&ID in the arbitration. His firm, Lismore Capital, subsequently bought P&ID – paying no financial consideration for these shares – and now has a 75% stake in the award.

As P&ID’s solicitor during the arbitration and now its director, Mr Andrew had some tough questions to answer about the steady stream of privileged documents, including sensitive legal advice obtained by Nigeria, that had been circulated within P&ID. Although acknowledging he received privileged documents and did not disclose this to either the arbitration tribunal or the court at the time, Mr Andrew resisted the suggestion they were improperly obtained. Instead, he maintained there was an informal practice of sharing privileged documents in Nigeria and they may have been provided for the purpose of settlement negotiations.

The question for the court, as Nigeria’s lead counsel observed, is whether Mr Andrew failed in his duties as a solicitor – and now also as a director of P&ID – to investigate the red flags of corruption that are raised by his receipt of legally privileged material.

What are the stakes?

The stakes in this case could not be higher: the arbitral award now stands at $11.1 billion, and gains $1.3 million every day in interest. Nigeria contends that the evidence heard in the trial should be seen through the “prism of the life-changing sums of money” that those implicated in the alleged bribery scheme stand to earn if the litigation succeeds:

  • Mr Andrew, through Lismore Capital’s stake in P&ID, stands to earn at least $825 million.
  • Mr Brendan Cahill, the co-founder of P&ID, would allegedly collect $2.5 billion.
  • Mr Trevor Burke KC, a barrister and the nephew of Mr Quinn, allegedly stands to receive $825 million from the proceeds of the award, over and above the $1,175,000 already paid for “work” done on the case;
  • “Commitments” are also owed to certain P&ID employees and “associates”, such as $500 million to Ms Taiga and $825 million to Mr Adetunji Adebayo, who operated as P&ID’s “man on the ground in Nigeria”.

On the other hand, the $11.1 billion that Nigeria stands to lose would be equally life-changing for the Nigerian people, 40% of whom already live below the country’s poverty line. The arbitral award – equivalent to a third of Nigeria’s total annual budget for 2023 and five times its health budget – brings home the cost of this failed gas project. Given these stakes, it is absolutely vital that this trial gets to the bottom of the bribery allegations to ensure the UK legal system is not used as the unwitting vehicle of an elaborate scheme to defraud the Nigerian people.

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