Nigeria risks $20bn in failed transaction with consortium
Amidst the controversial award of $9.6b to process and Industrial Development (P&ID) by a British Commercial Court, Nigeria may soon be caught again in the web of another failed transaction with a Nigerian-American Consortium, the BF1 Group, to the tune of about $20bn.
Recently out of exasperation, BFI threatened to reactivate an existing indemnity agreement, which provided for the Federal Government to indemnify Rusal-Russian aluminum producers and managers of Aluminum Smelter Company of Nigeria (Alscon) in case of legal action against UC Rusal et al.
The Chief Co-coordinator, South South of the Institute of Chartered Economist of Nigeria, Mr. Friday Nathaniel Udoh on behalf of BFI said: “If BF1 Group fails to recover Alscon, for which they were declared rightful owners by the National Council for Privatisation (NCP) in 2004, and affirmed by the Supreme Court of Nigeria in July 2012, they will re-introduce the claim of $2.8bn initiated in 2013 in New York against Rusal, for which the Federal Government guaranteed to pay the cost for Rusal. Apparently, the staggering cost for seven years now stands at over $20bn.”
In a statement made available to The Guardian in Calabar at the weekend, Udoh said BF1 Group initiated the 2013 New York arbitration against UC Rusal “for conspiracy to defraud BFI, interference in contractual relations with Federal Government, interference with prospective business advantages, and unfair competition.
“The matter was transferred to Nigeria for reasons of jurisdiction. UC Rusal pleaded to join the Federal Government in the matter and succeeded, despite vigorous objections by BF1 Group. The Court allowed their petition, based on the fact that the share purchase agreement (SPA) provided for the Federal Government to indemnify Rusal in case of action, should the BF1 group fail to enforce the Supreme Court decision.”
“Surprisingly, despite having reached such weighty agreement with foreign inventors, supervised by a competent court of law, the Federal Government, through its agency, the Bureau for Public Enterprises (BPE) has repeatedly ignored the Supreme Court order and frustrated all efforts by BF1 Group to enforce the court order, and take over Alscon.
“As at last count, there are two Supreme Court judgments, and several other Appeal and High court judgments all in favour of BFI. The BPE’s continued snub of these judgments and consequential order only increases the amount of dollars Federal Government will pay, should the arbitration resume in US court.”
The BF1 Group Chief Executive Officer, Dr. Reuben Jaja, said: “The American firm has shown faith in our legal system, considering the number of needless litigations initiated by BPE, all in attempt to thwart the Supreme Court judgment. Their simple gesture should not be mistaken for weakness, or this recent threat ignored. It is time for BPE to be called to order…”
Udoh recalled that it was the Obasanjo administration that gave the smelter to UC Rusal in “a spurious willing seller willing buyer deal.”
No comments yet