…Orders £43m payment to Nigeria
The United Kingdom (UK)’s Supreme Court has dismissed the appeal filed by Process & Industrial Development (P&ID), affirming that the £43 million cost award granted to Nigeria should be paid in pound sterling and not in naira.
In a unanimous decision delivered on Wednesday by a five-member panel comprising Robert Reed, Dame Simler, David Richards, Ben Stephens, and Patrick Hodge, the court ruled that there was no basis to alter the currency of payment, noting that Nigeria had paid its lawyers in pounds throughout the case.
The judgment marks the latest chapter in a legal battle that began over a failed 2010 gas processing deal between P&ID and the Nigerian government. The company had accused Nigeria of breaching contractual obligations after the agreement to build a gas plant in Calabar, Cross River State, collapsed. However, Nigeria maintained that the deal was fraudulent and designed to defraud the country.
In 2017, an arbitral tribunal awarded P&ID $6.6 billion in damages plus 7 percent interest, which grew to about $11 billion. But in October 2023, Justice Robin Knowles of the Commercial Court of England and Wales nullified the enforcement of the award, finding that it was obtained through fraud and serious breaches of Section 68 of the English Arbitration Act 1996.
Justice Knowles ruled that P&ID had bribed Nigerian officials involved in the Gas Supply and Processing Agreement (GSPA) and illegally accessed Nigeria’s privileged legal documents. He ordered the firm to pay £43 million in compensation for Nigeria’s legal costs and disbursements.
P&ID later appealed, arguing that since Nigeria’s legal expenses were funded by converting naira from its consolidated revenue fund, the £43 million should be paid in Nigerian currency. However, in July 2024, the UK Court of Appeal upheld the lower court’s ruling, emphasising that since the legal fees were charged and paid in pounds, the cost order should remain in that currency.
Delivering its final verdict, the Supreme Court agreed with the Court of Appeal’s reasoning, stating there was no justification for awarding the costs in another currency. The panel also declined to probe how Nigeria sourced funds for payment, rejecting P&ID’s claim that Nigeria would enjoy a “windfall” due to the Naira’s depreciation.
The justices observed that the currency’s steep decline since 2019, and especially after 2023, had already diminished Nigeria’s purchasing power.
“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. We add that contrary to P&ID’s submission, Nigeria does not enjoy a large windfall from this decision”, the panel said.
The court awarded costs in Nigeria’s favour, dismissing P&ID’s appeal in full.
Analysts have however pointed out that while the UK Supreme Court’s ruling cements Nigeria’s legal triumph over P&ID, it also exposes the deeper failures that made such a costly dispute possible in the first place.
The £43 million award may mark a symbolic victory abroad, but it underscores years of institutional negligence, corruption, and weak contract oversight at home.
