A UK judge has overturned an $11 billion arbitration award against Nigeria in the Process & Industrial Developments (P&ID) case, citing that the award was obtained through false evidence, corrupt payments and improper retention of leaked documents.
The case revolves around a gas supply and processing agreement signed between P&ID, a British Virgin Islands company, and Nigeria in 2010. However, the agreement was allegedly a sham from the start, with P&ID securing the deal through bribing government officials.
In 2017, a tribunal ruled that Nigeria should pay P&ID $6.6 billion as damages, which accumulated to over $11 billion with interest. But Mr. Justice Robin Knowles found that P&ID had engaged in abusive practices, including bribery and retaining confidential Nigerian legal documents. He criticized the arbitration tribunal and Nigeria’s legal team for allowing inflated damage calculations to go unchallenged.
The judge expressed concerns about “vast awards” in arbitration, stating they can harm economies and erode public trust in international dispute resolution. He suggested introducing limits or exceptions in international law to prevent such outcomes.
This case highlights the importance of rigorous discovery processes in arbitration claims. The judge’s decision emphasizes the need for tribunals to actively test evidence and for parties to present robust defenses.
The judge’s ruling not only overturned the massive award but also ordered P&ID to pay £43 million in compensation to Nigeria for legal fees and disbursements.
