Nigeria wins time to challenge £10 billion gas project ruling

Nigerian government was ordered to pay after the collapse of a gas project at the centre of corruption claims

Nigeria's president Muhammadu Buhari has promised action against corruption. Reuters

Nigeria has won extra time to appeal against a $10 billion penalty over the collapse of a gas project after a London judge ruled on Friday that there was evidence the deal was riddled with corruption.

The African nation’s government was ordered to pay a British Virgin Islands-based company $6.6 billion in 2017 by an arbitration tribunal after it failed to deliver on a promise to build a pipeline agreed as part of an energy deal. The amount has since increased to $10bn with interest.

But Nigeria claimed that it had been the victim of a complex and massive fraud and went to the High Court in London in July to challenge the ruling, claiming that Nigerian officials and their family members had been bribed.

The Nigerian government also alleged that a lawyer who had been acting on its behalf had colluded with the company against its interests and had been involved in bribing key officials.

The deal struck in 2010 was designed to provide gas to generate power for millions of people but never got off the ground. Its failure resulted in the arbitration ruling in favour of Process and Industrial Developments Ltd (P&ID), set up by two Irishmen in 2006.

The Nigerian government had missed a deadline to appeal against the ruling but successfully argued for more time and said new evidence came to light in late 2019 that suggested the deal was riven with corruption. Nigeria will return to court at a future date to appeal against the $10 billion judgment.

In a ruling published on Friday, Judge Ross Cranston said that Nigeria had established a “strong” case that the deal was struck because of “bribes paid to insiders as part of a larger scheme to defraud Nigeria”.

He said there was a case to answer that one of the two Irishmen behind the company, Michael Quinn, who died in 2015, lied to the tribunal about the company’s ability to carry out the contract.

He also found that Nigeria’s ability to argue its case had been “tainted” by the conduct of one of its senior lawyers, who was accused of colluding with the company to put up a poor defence and inevitably lose.

The company had admitted that senior Nigerian officials, with influence over the deal, had been paid but only for medical expenses. The judge said the claim was not backed up by medical records.

The court was told that the Nigerian government accepted that fraud was endemic in the country at the highest levels, especially in the oil and gas sector, until the arrival of President Muhammadu Buhari in 2015.

“We will now proceed to a full hearing of our fraud challenge in the coming months,” a spokesman for Nigeria's attorney general said following the ruling.

“We are firmly committed to overturning the award – no matter how long it takes – to ensure that this money goes toward Nigeria's future.”

A spokesperson for P&ID, a vehicle created for the gas deal, said on Friday it welcomed the opportunity to "refute Nigeria's false allegations and wild conspiracy theories at trial".

The company said it had every confidence the English court would "resolve the case justly and expeditiously".