UK court grants Nigeria stay of execution over $9.6b debt
• Ties reprieve to $200m payment within 60 days
• P&ID lauds legal window before assets seizure
• How nation lost $157.5b to illicit financial flows, by Buhari
The Federal Government yesterday achieved a major boost in its effort to upturn the $9.6 billion judgment in favour of Process and Industrial Development (P&ID) as a UK court yesterday granted the country leave to appeal, and a stay of execution of the earlier judgment.
The ruling by the Commercial and Arbitral Court of the United Kingdom (UK) offers Nigeria a fresh opportunity to prove its allegation against P&ID that the company was bent on using its alleged claim of expertise in gas processing to defraud Nigeria.
The court heard the Federal Government’s fresh grounds to review the judgment and ruled that a stay of execution be granted subject to a $200 million security payment to court within 60 days pending the determination of the appeal.
Reacting to the condition, Minister of Justice Abubakar Malami said: “I am pleased with today’s development in the court as I see this as a positive resolution that constitutes an important step in the government’s effort to defend itself in a fair and just process. We look forward to challenging the UK Commercial Court’s recognition of the tribunal’s decision in the UK Court of Appeals, uncovering P&ID’s outrageous approach for what it is: a sham based on fraudulent and criminal activity developed to profit from a developing country.
“We will study the court rulings, exercise the right of appeal, and consider the legal options available at our disposal as it relates to the payment of $200 million in view of the 60 days window stipulated by the court.”
Reacting, P&ID, in a statement sent to The Guardian, welcomed the ruling, saying: “The Nigerian government will now have to put its money where its mouth is if it wants to avoid immediate seizure of assets.”
It said further: “The Nigerian government’s recent media exercise to allege fraud against P&ID turned out to be a red herring. Indeed, the Nigerian government did not present any evidence to support Attorney General Malami’s ‘findings’ from his sham investigation. The Nigerian government knows there was no fraud and the allegations are merely political theater designed to deflect attention from its own shortcomings.”
Some Nigerians allegedly involved in the failed gas supply contract were recently convicted by the local court, which also ruled on the seizure of P&ID’s assets in Nigeria.
The project conceived by P&ID’s founders, Brendan Cahill and Michael Quinn, was to deliver “much-needed power generation to millions of Nigerians and create profitable by-products for sale on the international market. Under an agreement with Nigeria, P&ID would build a state-of-the-art gas processing plant to refine natural gas (‘wet gas’) into ‘lean gas’.”
P&ID “would receive no payment for this work: instead, it would own the by-products created by the refining such as propane, ethane and butane, known as Natural Gas Liquids (NGLs) and would have the right to sell them on the international markets. This market would be worth billions of dollars over the 20-year lifespan of the contract.”
Nigeria reportedly failed to supply the ‘wet gas’ (which was required under the terms of the contract) and so the project could not continue.
P&ID claimed it made multiple compromises in an attempt to find a workable solution but did “not find a willing partner on the other side of the table.”
In 2012, P&ID went to arbitration to try to resolve the dispute, and in 2016, the panel of independent arbitrators ruled that Nigeria was liable to the company, a decision that has led to the current situation.
President Muhammadu Buhari, meanwhile, has disclosed that Nigeria lost an estimated US$157.5 billion to illicit financial flows between 2003 and 2012.
Quoting from the 2014 Global Financial Integrity Report in his address to the High-Level National Side-Event, he noted that such massive loss of assets resulted in dearth of resources “to fund public services or to alleviate poverty” in the country.
The event was organised by the African Union Development Agency and New Partnership for Africa’s Development (AUDA-NEPAD) and the Economic and Financial Crimes Commission (EFCC) on Wednesday in New York, on the margins of the 74th United Nations General Assembly.
“That is why our government has made it a war we intend to win. We will give all it takes to ensure there is no hiding place for purveyors of corrupt practices who are truly enemies of the people,” Buhari said.
Details of the president’s address were disclosed in a statement by his Special Adviser on Media and Publicity, Femi Adesina, and made available to newsmen in the early hours of yesterday.
Stressing the need to strengthen good practices on asset recovery and return, Buhari said: “In the last five years, our government has made significant progress to curb corruption. And we have recovered millions of dollars stolen from our country.”
He however noted: “There are still a lot of other funds that are stuck in foreign bank accounts due to international laws, different jurisdictions and justice systems that make it difficult for repatriation.”
Describing illicit financial flows as “illegal movement of funds from one country to another,” Buhari lamented: “These flows deplete Africa’s internally generated revenues, foreign exchange earnings, reduce tax revenues, drain natural resources, facilitate corruption and stunt private sector development.”
Citing tax avoidance as another form of illicit financial flow, he quoted the Tax Justice Network and the International Monetary Fund to have estimated over US$200 billion per year “lost by developing countries when multinational enterprises do not pay taxes in the countries where they made the profit. This amount is significantly higher than the annual development aid received by these countries which are estimated to be about US$143 billion.”
Buhari commended the organisers of the meeting designed to finding “pragmatic ways to promote international cooperation to combat illicit financial flows and strengthen good practices on asset recovery and return, as an arm of sustainable development policies in Africa.” He also lauded their “shared commitment to root out corruption from our continent.”
Emphasising the imperative of international cooperation towards stemming the incidence of illegal financial flows, Buhari said: “Any lasting solution to the above challenges will require international cooperation and coordination,” of African countries and their international counterparts.
“This is one reason why the Nigerian government supports this initiative of AUDA/NEPAD and remains committed until we ensure that there are no safe-havens for stolen assets from Africa,” he said.
On the outcome of the meeting, Buhari said: “I have high expectations. At the end of the deliberations, I expect other African leaders to see the pragmatic ideas on how to strengthen our anti-corruption institutions to reduce or effectively eliminate illicit financial flows.”