The Nigerian government has filed a new lawsuit against the management of British Virgin Island firm, Process and Industrial Development (P&ID).
This is based on new evidence discovered days after a London high court received a bank guarantee of $200 million from the Federal Government of Nigeria to secure a stay of execution on asset seizures of up to $9 billion.
According to the Attorney general of the federation, Abubakar Malami the new court case is a bid to overturn the tribunal order which directed Nigeria to pay $6.6 billion in damages in 2013. Nigeria’s refusal to pay led to the fee’s increase to about $9 billion due to interests accrued daily since 2013.
What happened: P&ID‘s contract with the Federal Government started in 2010 when former President Umaru Musa Yar’Adua authorised partnerships with private companies to fix the power problem in Nigeria. P&ID signed an agreement with the Ministry of Petroleum Resources in January 2010. But the deal broke down, resulting into a lawsuit against Nigeria.
New development: According to a statement issued by Umar Gwandu, the Special Assistant, Media and Public Relations to the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, new evidence from investigations has proved that the 2010 contract was a sham that was never meant to succeed.
Malami said the lawsuit “is a major step forward in a bid to overturn the injustice of the US$9.6bn award” adding that “The filing challenges both the underlying arbitral award and its enforcement, and lodges a fresh appeal against the subsequent High Court judgment.
“Based on new evidence that has come to light in recent investigations, it is clear that the original contract was a sham commercial deal and designed to fail from the outset. The fraud was only recently discovered as a result of President (Muhamadu) Buhari’s anti-corruption efforts spearheaded by the Economic and Financial Crimes Commission.” Punch quoted the statement in a report.
Nigeria argued that the contract “was procured on the basis of fraud and corruption, while the subsequent arbitral process was riddled with irregularities and deliberately concealed from the rest of the government
What Nigeria stands to lose: The situation is dire for Nigeria if it eventually loses the case altogether. The $9 billion is equivalent to almost 2.5% of the country’s annual gross domestic product. Also, if Nigeria can’t afford to pay the sum, the country will lose its assets in UK and the United States, depending on the assets P&ID choose to seize and sell. (NairaMetrix)