Nigeria’s fight to overturn an $11.1bn arbitration award – more than the country’s most recent budget for its health and justice ministries – over a failed gas processing project opened today in the Business and Property Court in London.
Federal Republic of Nigeria v Process & Industrial Developments Limited centres on an oil and gas contract reached by alleged ‘fraud and bribery’ of senior legal representatives and key officials in the country’s government.
Court 19 of the Rolls Building had standing room only for the first day’s hearing before Mr Justice Robin Knowles into the enforceability of arbitration awards. The public gallery was full and more than 16 members of counsel were in attendance. The hearing was also accessed remotely.
The court heard that P&ID, an offshore company belonging to Michael Quinn and Brendan Cahill, was awarded a contract for gas supply and processing by Nigerian government officials in 2010. The project was never started and P&ID began arbitration proceedings for breach of contract. P&ID was awarded $6.6bn, a bill which currently stands at $11.1bn with interest.
The Federal Republic of Nigeria took the dispute to the High Court claiming the arbitration was based on ‘fraud and bribery.’ Its skeleton argument runs to some 248 pages while P&ID’s totals 300 pages.
In his opening statement for Nigeria, Mark Howard KC said he needs to prove that only one person who touched the contract was bribed. ‘There are many documents that are as close to a smoking gun as one will ever see in a fraud case,’ he said. ‘There are so many incriminating documents in this case, there is a risk of being desensitised. If only one document was found in another case, it would be extraordinary. What we have uncovered is a whole cascade.’
Nigeria also claims that P&ID bribed Nigeria’s legal representatives, who then did not properly defend the arbitration case.
Howard told the court that P&ID paid bribes prior to the awarded contract and after in a bid to conceal evidence of earlier corruption. P&ID’s documents used codewords for bribes such as ‘PR’ and ‘Dublin Expenses.’ Spreadsheets were highlighted during the claimant’s opening which, Howard said, listed PR, marketing, and Dublin Expenses payments made to ministers. The court heard many bribes were made in cash.
Howard said: ‘What do P&ID say about this? Very little indeed, as you will see in cross examination, witnesses have given explanations that are contradictory and nothing short of ridiculous. As I say it is difficult to keep the smile of one’s face – but payments to ministers, “PR”, brown envelopes, are you serious?’
Howard said: ‘This is how corrupt people operate.’
Whatsapp messages were also read out in court which, Howard argued, showed obvious corruption and bribery including messages talking of the need to be ‘discreet’ between the legal director and Cahill. ‘$10m was being spent on bribes, [you’ve] got to remember this is not over the entire life of P&ID and these other companies. We do not have any record after 2012,’ Howard said.
P&ID denies it paid any bribes and denies any wrongdoing. The company claims it is entitled to the tribunal’s arbitration award as Nigeria breached the contract.
Lord Wolfson KC, for P&ID, will make his opening statement tomorrow (Tuesday).
The trial, which is expected to last eight weeks, continues.
