By Olu Fasan
Some Nigerians, out of sheer sentimental or romantic patriotism,condemned the recent decision of an English judge, Mr Justice Christopher Butcher, to uphold the arbitral award of $9.6 billion against Nigeria in a breach of contract case brought by Process & Industrial Development, P&ID, Ltd, a company based in British Virgin Islands. But count me out! Proper patriotism is not about defending the indefensible! How could “patriotism” make anyone blind to the utter misrule in Nigeria? A country where most citizens have no faith in government, trust in politics or expectation of good governance.
Recently, in London, I trained a group of Nigerian councillors and local government officials on policymaking and public governance. As I discussed international best practices, they kept saying: “Sir, what you are saying can’t work in Nigeria”. Governance in Nigeria, they said, is not about the public interest, but private gains. But you can be change agents, I said, making a difference in your spheres of influence. They laughed, amazed about my seeming naivety. Their point, made with a tone of complete resignation and fatalism, was that the universal idea of sound public policy and good governance is totally alien to Nigeria.
It was depressing, but that dismal state of affairs is the prism through which one must view the P&ID case. At its root are the familiar problems of Nigeria: corruption and abuse of power; utter disregard for the legality and the rule of law. In Nigeria, the rule of men trumps the rule of law. According to the National Content Standards in Civics and Government, the rule of men involves “the ability of government officials and others to govern by their personal whim or desire”. Which, precisely, is how Nigeria is being governed, by the personal whim or desire of the corrupt political and bureaucratic elites!
The P&ID case is a clear example of such impunity. It was an attempt by powerful individuals to commit Nigeria to a shoddy international contract for personal gains. That’s not new, of course. Virtually every government-awarded contract in Nigeria is intended, in large part, to serve personal interests. Dr Ngozi Okonjo-Iweala, former Finance Minister, addressed this issue in her book, Fighting Corruption Is Dangerous. She described a common practice in which politicians and officials awarded contracts with a view to defaulting on them, and when the contractors went to court, judges, conniving with the parties, would award inflated damages, “and all parties would share in the proceeds after payment”. As a result, judgement debt became an intractable fiscal problem, totalling N80 billion in 2012!
This recklessness in awarding contracts with dubious or self-interested motives was evident in the P&ID contract, signed with two Irish businessmen, Brendan Cahill and Michael Quinn, in 2010. Under the contract, P&ID would build a gas process plant, while the government would lay all the pipelines and supply gas to the plant. But, although the company claimed it spent $40 million in preparatory work, it never broke ground on the project, arguing that the government had frustrated the contract by reneging on its commitment to lay the pipes. They went to arbitration in 2012, seeking an award for breach of contract.
President Muhammadu Buhari said this week while addressing the UN General Assembly, that the P&ID judgement “is an international scam to cheat Nigeria”. But at no time during the arbitration did Nigeria allege that the contract was fraudulent or invalid. Instead, President Goodluck Jonathan’s government agreed a settlement of $850 million with the company on May 3, 2015, about 26 days before President Buhari was sworn in. But, on assuming office, Buhari treated the matter as if it was a problem for his predecessor, and not for him! But he was wrong in law. His predecessor’s government may have entered into the contract, but it was Nigeria’s contractual obligation, and his own government must honour or challenge it.
But the Buhari administration did neither. It ignored the legal risks and treated the arbitration with total levity. Even when the government eventually began to take some interest in the matter, it’s handling of the arbitration was embarrassingly shambolic. For instance, Nigeria did not challenge the Arbitration Tribunal’s initial decision in favour of P&ID in July 2015; it appealed the decision on jurisdiction or forum in 2016 several months after the 28-day deadline, leading to the dismissal of the appeal; and it didn’t appeal the final arbitral award of $9 billion made in January 2017. It was an unmitigated mess, a combination of utter incompetence and total disregard for the rule of law and legal process.
In November last year, the former British Secretary of State for International Development, Priti Patel, now Home Secretary, wrote a damning article, titled: “If Nigeria wants to take part in global markets, it must shape up and honour its obligations.” She accused President Buhari of cancelling a compensation settlement between P&ID and the Jonathan government, adding that, since taking office, Buhari “has done his level best to pretend Nigeria’s obligations to P&ID do not exist, refusing to respect the various tribunal decisions”.
Of course, Nigeria continued to ignore the arbitral award. Well, on August 16, the English commercial court upheld the award, thus converting it into a judgement debt. The implication is that, unless Nigeria successfully appeals the case, its commercial assets worldwide are at risk of being confiscated. That would be a heavy price, but it would be a price paid for utter lawlessness and violation of universal norms of state behaviour!