A London court has quashed an $11bn damage bill against Nigeria lodged by Process & Industrial Developments Limited Gas Company.
The bill charge was brought forward against Nigeria for a collapsed gas processing project in Cross River, Nigeria.
Nigeria risked having to pay the sum – representing around a third of its foreign exchange reserves – to Process & Industrial Developments, a company based in the British Virgin Islands.
But the High Court ruled in October that P&ID paid bribes to a Nigerian oil ministry official in connection with the gas contract signed in 2010, and failed to disclose this when it took Nigeria to arbitration over the collapse of the deal.
The ruling was a major boost for Africa’s biggest economy, which is saddled with mounting debt, high inflation and unemployment, and was described by Nigerian President Bola Tinubu as a blow against economic malpractice and the exploitation of Africa.
P&ID argued that the case should be sent back to arbitration, but Judge Robin Knowles ruled on Thursday that the award should be thrown out immediately.
The judge also refused P&ID permission to appeal, effectively ending the case as the company cannot apply for permission from the Court of Appeal.
According to the Reuters report, a London-based spokesperson for the Nigerian government said the decision “marks the conclusion of a historic victory for the people of Nigeria.”
The trial has its origin in a failed 2010 gas deal between Nigeria and P&ID, a British Virgin Islands-registered firm founded by two Irish businessmen.
The two Irish nationals – a former music manager, Michael Quinn (who died in 2015) and his business partner Brendan Cahill had been previously contracted to repair tanks and planes for the Nigerian military.
In 2010, P&ID was awarded a 20-year contract to process gas for Nigeria’s domestic energy market.
Two years later the firm commenced arbitration proceedings, claiming that the Nigerian government had failed to build the required infrastructure for the energy project, which translated to reneging on the contract.
A resulting arbitration led to a $6.6bn award for P&ID that has now increased to more than $11bn with interest. However, the latest development almost definitively quashes the company’s chances of seeking redress through the legal system.