A London tribunal ruled this month Nigeria was obligated to pay compensation to Process and Industrial Developments Ltd (P&ID), a company setup in the British Virgin Islands by two Irish businessmen, to build a gas refinery in Calabar, in the oil-rich Niger Delta.
The presiding judge ruled the company had the right to seize $9bn in assets from the Nigerian government over the aborted project.
Officials of the Muhammadu Buhari and Goodluck Jonathan administrations are now blaming each other.
Certainly, officials in both administrations have not covered themselves in glory.
- The agreement, which set the basis for the current legal action, was a Gas Supply and Processing Agreement signed in January 2010.
- If concluded, the deal would have offset a significant percentage of Nigeria’s energy deficit (Africa’s largest oil and gas producer has a notoriously epileptic power supply).
- P&ID claims about $40m were expended on the project, but Nigeria did not meet its obligations and cost the company billions in damages representing future profits it had lost.
The value of the landmark ruling represents approximately a fifth of Nigeria’s foreign reserves of $45bn.
- In 2013, after the deal failed, P&ID dragged the government to court and won a $6.6bn arbitration case against the Federal Government.
- Four years later, the firm was awarded $6.6bn, with an additional $2.4bn included as accrued interest.
- Nigeria for years resisted P&ID’s attempts to begin enforcement proceedings of the rulings in the US and the UK; last week’s judgement by the British court now allows the firm to begin seizing Nigerian assets.
- Under the Jonathan administration, Nigeria negotiated an out-of-court settlement with P&ID for a far smaller sum of $850m. However, the president left the payment to the incoming Buhari administration, which set aside the settlement and asked its lawyers to return to litigation.
Jonathan’s men claim his successor delayed and ignored payments to spite him. Remo Omokri, a former presidential spokesman, has now shed more light on the deal.
“This transaction occurred in January of 2010,” he said, in a statement at the weekend. “Former President Jonathan was not president in January 2010. During that time, he was completely shut out of power by an unelected cabal that ran Nigeria during the period of the ill health of the late President Yar’Adua, before the National Assembly courageously intervened on February 9, 2010.”
Jonathan assumed office in February 2010 and, according to Omokri, the deal had by then already been set in motion by Rilwanu Lukman, Umaru Musa Yar’Adua’s petroleum minister. The cabinet and close allies of the late president had refused to turn over sensitive documents to his deputy because Yar’Adua hadn’t handed over to him as constitutionally stipulated.
“That same cabal has resurrected and has now coalesced around President Muhammadu Buhari, with some of them being made either ministers, or formal and informal advisers,” Omokri added. “As a matter of fact, the main man behind that cabal is now one of the closest persons to General Buhari.”
Unsurprisingly, Buhari’s administration has pushed back, with the Attorney General of the Federation (AGF), Abubakar Malami saying he will prosecute everyone linked to the judgement debt.
- “…in spite of the spirited and concerted efforts of the current administration to combat corrupt practices and rent-seeking in all its forms, Nigerians woke up on Friday 16th August, 2019 to the rudest consequences of the underhand dealings of the past administration”, said Malami.
Bottom line: Political actors are constantly recycled in Nigeria, where ethnicity and religion are big identity markers. While the identity of the “cabal” remains obscure, Yar’Adua and Buhari hail from the same state and have common allies. Ruthless politicians will no doubt use this to further divide Nigerians.
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