Again, Nigeria wins in UK’s Supreme Court

The United Kingdom’s Supreme Court has dismissed the appeal filed by Process & Industrial Development (P&ID), affirming that the £43 million award owed to Nigeria must be paid in pound sterling and not in naira.

A five-member panel of justices — Robert Reed, Dame Simler, David Richards, Ben Stephens, and Patrick Hodge — delivered the unanimous ruling on Wednesday, concluding that the payment should be made in the same currency Nigeria used to settle its legal fees in the case.

P&ID had signed a contract with the Nigerian government in 2010 to build a gas processing plant in Calabar, Cross River State. The company later claimed that the agreement failed because the government did not meet its obligations.

The Nigerian government, however, argued that the deal was a fraudulent scheme aimed at defrauding the country — an accusation P&ID strongly denied, calling them “false allegations and wild conspiracy theories.”

Following the dispute, an arbitration tribunal in 2017 ordered Nigeria to pay P&ID $6.6 billion in damages, plus interest, bringing the total to about $11 billion.

In October 2023, Justice Robin Knowles of the Commercial Court in England and Wales halted the enforcement of the award, ruling that it had been obtained through fraud and in breach of section 68 of the English Arbitration Act 1996.

Knowles found that P&ID had bribed Nigerian officials during the drafting of the Gas Supply and Processing Agreement (GSPA) and had unlawfully accessed confidential government legal documents. He then ordered the company to pay £43 million to Nigeria as compensation for legal costs and related expenses.

P&ID appealed, arguing that the cost order should be paid in naira, since Nigeria funded its legal expenses by converting naira from its consolidated revenue fund.

However, in July 2024, the UK Court of Appeal upheld Knowles’ ruling, maintaining that because Nigeria paid its legal costs in pounds, P&ID must do the same.

In its latest decision, the UK Supreme Court affirmed that there was no basis to award the costs in any currency other than sterling, since English solicitors billed and were paid in pounds.

The panel rejected P&ID’s contention that paying in sterling would give Nigeria a “windfall,” as the naira had significantly depreciated since the payments were made.

“The depreciation of its currency internationally has resulted in a substantial diminution of the domestic purchasing power of the naira in Nigeria since 2019 and especially since 2023,” the court said.

“For all these reasons, which are essentially the same as those given by the Court of Appeal, we conclude that Knowles did not err in law in the exercise of his discretion,” the justices added.

They further stated: “Contrary to P&ID’s submission, Nigeria does not enjoy a large windfall from this decision. The depreciation of its currency internationally has resulted in a substantial diminution of the domestic purchasing power of the naira in Nigeria since 2019 and especially since 2023.”

The court also dismissed the appeal and ordered P&ID to pay Nigeria’s legal costs on the standard basis.