Federal Government’s moves to overturn the $9.6 billion judgment debt awarded against it in favour of Process and Industrial Development Limited (P&ID) by a United Kingdom (UK) will come up for hearing in London next week. The hearing is slated for 13-14 July.
The appeal got positive feedback with a United States court granting Nigeria permission to request documents from VR Capital Group Ltd, the part owner of a company that received a $9.6 billion arbitration award the government is trying to overturn.
Next week’s hearing in London is seen by many people familiar with the case as a threshold hearing.
In a statement to The Blast News on Friday, P&ID explained that in December 2019, Nigeria had applied to have the arbitration award set aside in the UK, claiming that the underlying agreement is tainted by fraud and corruption. The claim had been brought years out of time (the arbitration award was made in 2017 and English law usually only permits such challenges if brought within 28 days after an award is issued), meaning Nigeria needs permission to proceed with its application, which is the purpose of the hearing.
P&ID said that while Nigeria, under Attorney General of the Federation, Abubakar Malami’s watch, had the right to challenge the arbitration award in February 2017, it did not do so until after it successfully won the right to enforce the Arbitration Award in August 2019 decision, a decision Nigeria is also appealing.
At that point Nigeria claimed that the GSPA (which had been signed almost a decade earlier) was tainted by fraud and corruption. If the London Court decides that Nigeria should not be excused the years-long delay in filing a challenge, Nigeria can no longer seek to nullify the award in favor of P&ID. This is Nigeria’s last chance saloon.
P&ID has written to the court in United States alleging that Nigeria willfully misled the U.S. Court about its intentions for how to use the documents it was seeking and then obtained documents outside the limits of what the U.S. Court had authorised.
The P&ID legal team said it can find no legal precedent for a foreign government going direct to the U.S. court rather than via the DOJ for permission to collect evidence in the US in support of a criminal investigation. Nigeria’s 1782 application illustrates a deliberate effort to subvert established diplomatic protocols in order to carry out their politically motivated campaign against P&ID without scrutiny by the DOJ – which might have questioned whether Nigeria’s campaign was appropriate under the U.S. Constitution.
Earlier on, U.S. District Judge Paul Engelmayer had ordered in New York that Nigeria can subpoena information from London-based hedge fund VR Capital, four subsidiaries and three of its directors.
The Federal Government had inApril, sought documents from 10 banks, including Citigroup and JPMorgan Chase & Co., in a bid to overturn the judgement related to a business deal that the country contends is shrouded in allegations of corruption.
Nigeria asked a federal court in New York for permission to subpoena information about transactions involving government officials, including former President Goodluck Jonathan. The politicians were in office when the state signed a contract with Process & Industrial Developments Ltd (P&ID), and later became involved in a costly dispute with the company.
But London-based iNHouse Communications, representing P&ID, said: ” Nigeria’s “efforts to seek information on a crime that never occurred from a party that was never involved with P&ID until years after the alleged events is prima facie evidence that it has no case at all. The claim that P&ID deliberately concealed documents by destroying them is totally false.”
Economic and Financial Crimes Commission (EFCC) plans to use the data in its probe of British Virgin Islands-registered P&ID and allegedly corrupt government officials.
A Cayman Islands-registered unit of VR Capital acquired a 25 per cent interest in P&ID about two years ago and will have conducted due diligence on the firm that is “highly relevant” to the ongoing investigation, according to a court filing submitted by Nigerian Attorney General Abubakar Malami on May 12.
Bloomberg report said the successful court application is part of Nigeria’s efforts to show that a 2010 gas-supply contract with P&ID was a sham designed to fail by the company and government officials. P&ID denies any wrongdoing, saying that Nigeria invented the allegations to evade its legal obligations.
The dispute between Nigerian government and P&ID became a crisis in August, when a U.K. judge ruled P&ID could enforce a 2017 arbitration tribunal’s decision that Nigeria breached the gas-supply contract. The resulting award now totals $9.8 billion including interest and is equivalent to about 30 per cent of Nigeria’s foreign reserves.
An investigation by the EFCC has already resulted in criminal charges in Nigeria and will form the basis of the government’s appeal against the ruling.
The contract and arbitration award are P&ID’s “sole assets,” according to Nigeria’s filings to the District Court for the Southern District of New York. The company was supposed to build a gas-processing plant, while the government was to supply the raw material. “The only thing P&ID engineered was a fraudulent arbitration claim,” the country said.
The Federal Government wants VR Capital to hand over documents concerning the company’s purchase of P&ID shares as well as the contract and arbitration proceedings, according to court filings. The EFCC said its investigations showed that P&ID acknowledged destroying records “in or around January 2017” and VR Capital is “a logical source” for recovering such information, according to the filing.
VR Capital can still seek to quash the subpoena. VR Capital, which has offices in New York, London and Moscow, is an asset manager that focuses on distressed securities and “event-driven/special situations investments,” according to its website.
Malami described the firm as a “vulture fund” in December in a statement to a U.K. court. P&ID said the hedge fund has given it assistance toward enforcing the arbitration award.
A judge at the same New York court on May 7 granted another application by Nigeria to request information from 10 banks, including Citigroup Inc. and JPMorgan Chase & Co., on transactions involving companies and individuals affiliated with P&ID as well as former government officials.
