An English Court of Appeal has rejected a move by Process and Industrial Development (P&ID), a company owned by two Cayman Island-based entities, to set aside a previous judgement reversing the company’s $11 billion damages claim against Nigeria.
Lord Justice Snowden, a justice of the High Court of Justice of England and Wales and the lead judge in the suit,
noted that the decision of a British high court on the matter last December stands.
The verdict was delivered unanimously with other judges such as Lord Justice Snowden and Sir Julian Flaux.
P&ID was also challenging the decision of Robin Knowles, the judge who dismissed the damages claim, to deny it permission to appeal the previous judgement.
In one voice, the three judges granted P&ID’s prayer for permission to appeal and promptly dismissed it, according to a copy of the Friday ruling, seen by PREMIUM TIMES.
“I would therefore grant P&ID permission to appeal, but would dismiss the appeal,” Mr Snowden said while reading the decision he reached with his two other colleagues.
Succinctly put, the appeal dismissed by the court was P&ID’s bid to reject the ruling freeing Nigeria from paying the company the damages.
The court also rejected the prayer of the company, requesting it to set aside a ruling by the lower court regarding the currency in which the payment of the legal costs Nigeria incurred in the case.
P&ID’s contention was whether Robin Knowles, the judge who asked the company to pay Nigeria £43 million as legal fees and disbursements when the decision was made seven months ago, was in order in declaring that the payment be made in pounds sterling.
Background
Late last year, Nigeria got a breakthrough after more than ten years of a ‘breach of contract’ dispute with P&ID, originally set up by two Irish citizens and registered in the British Virgin Islands, over a failed deal to construct a gas plant in the country.
The London Court of International Arbitration awarded $6.6 billion to the company in 2017, saying Nigeria did not fulfil its contractual obligations.
The sum rocketed to $11 billion over six years after interest was factored in, putting Nigeria at risk of setting aside one-third of its external foreign exchange reserves to settle the debt if the verdict reached last December had gone against the country.
Nigeria won the bid to upturn the arbitration award after its lawyers established that the process by which P&ID got the contract had been tainted by bribery, arguing that the company intended to use litigation to make money out of the situation.
Nigeria’s legal team affirmed that the contract was a product of graft and claimed that the company greased the palm of the officials of the country’s petroleum ministry to win the construction contract in 2010.
They went ahead to assert that P&ID bribed the country’s lawyers in the course of proceedings to obtain documents that were deemed confidential.
P&ID, founded by Irishmen Michael Quinn and Brendan Cahill, had been pursuing the claim since 2012.
Robin Knowles, the judge who delivered the ruling overturning the award to P&ID, noted that P&ID and its lawyers were “driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others.”
READ ALSO: P&ID: Nigeria begins bid to overturn $11bn judgement debt
Legal costs payment gimmick
P&ID claimed that even though the £43 million payment by Nigeria to its lawyers was made in pounds, the source of such settlements is usually the country’s consolidated revenue fund, which is denominated in naira.
For that reason, P&ID said it ought to reimburse the country for the legal costs it incurred in the naira equivalent of £43 million.
“As indicated by Males LJ in NIOC at [60], one of the intentions behind the limitation in section 67(4) and equivalent provisions of the Arbitration Act, and the general policy of non-intervention of the courts in the arbitral process (see section 1(c) of the Arbitration Act), is that appeals in arbitration cases should generally be limited to some important point of principle,” Mr Snowden said.
“To the extent that this represents an additional factor in the decision whether to grant permission to appeal, I also consider that the point on the currency of the Costs Order is of sufficient general importance to meet that requirement,” he added.
The court based its decision on the analysis of Justice Kimbell QC in a case titled “Cathay Pacific” in permitting P&ID to appeal.
“In Cathay Pacific, the solicitors for the successful defendant had accounted for their time and had invoiced their client (a German company), in euros. The deputy judge was asked to assess those costs summarily and to make an order for payment of the resultant amount in euros. The paying party objected that the court could only make an order for payment of costs in sterling,” he said.
“P&ID asserts that payment of such fees and disbursements at the relevant times would have cost Nigeria a total of about 23 billion naira; but if P&ID is required to pay £43 million in costs now, that could be exchanged by Nigeria at the current rate to about 76 billion naira,” the document stated.
On account of exchange rate volatility, the sum surged by more than three times between December and now when converted into naira.
Allowing P&ID to refund the money in naira would have made the payment essentially lower than £43 million.
“In my judgment, therefore, the Judge was right to accept Nigeria’s straightforward submission that because Nigeria had been invoiced and had incurred its liability to its solicitors in sterling, and had paid those bills in sterling, the court ought to make its Costs Order in sterling,” Mr Snowden said.
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