A UK judge has ruled that a small gas firm founded by two Irish businessmen can seize roughly $9bn in assets from the Nigerian government, the equivalent of about a fifth of the west African country’s foreign reserves.
The decision came in enforcement proceedings pursued in the London High Court by Process and Industrial Developments over an aborted 2010 gas processing plant project, for which it had been awarded $6.6bn in an arbitration case in January 2017.
With interest of over $1m a day this has ballooned to over $9bn, or roughly 2.5 per cent of Nigeria’s GDP.
In his court ruling, Justice Christopher Butcher said the company can enforce the arbitration award as if it were a UK court order, which would allow it to begin seizing Nigerian assets in the UK.
The lawyer for P&ID said the company was “committed to vigorously enforcing its rights, and we intend to begin the process of seizing Nigerian assets in order to satisfy this award as soon as possible”.
The decision represents perhaps the largest financial liability in Nigeria’s history.
Lawyers representing Nigeria, Africa’s largest economy, had argued that the arbitration award should not be enforced because it was “manifestly excessive and penal”, and that the UK was not the right jurisdiction for the case.
Mr Butcher rejected the government’s arguments. The Nigerian government has yet to make any payment, and “has not applied to set it aside in any jurisdiction”, according to the ruling.
A spokesman for the Nigerian ministry of justice and the lawyers representing the government did not immediately respond to requests for comment.
The Nigerian government had agreed to supply gas to a natural gas refinery that P&ID planned to build in 2010. The company had been established by businessmen Michael Quinn and Brendan Cahill expressly for the project.
Two years later the company, which never broke ground on the project but said it had spent around $40m, took the government to arbitration, calculating damages based on what it estimated it would have earned over the 20-year period of the contract.
P&ID, which is based in the British Virgin Islands, has also brought a suit against Nigeria in the US to enforce the arbitration award.
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