The Federal government has commenced move to reverse the judgment of a British court which Friday ordered the seizure of 20 per cent in assets of Nigeria’s foreign reserves, amounting to $9bn (£7.4bn).
Justice Butcher of the British Commercial Court had on Friday while delivering judgment in the suit filed by an Irish firm, Process and Industrial Developments Ltd (P&ID) against Nigeria gave the firm the go-ahead to seize Nigeria’s asset to the tune of $9bn in terms of judgment debt in favour of the firm.
However barely few hours the judgment was given in favour of P&ID, Nigeria has indicated it would appeal the judgment.
A statement from the Federal Ministry of Justice, signed by the Solicitor-General of the Federation, Dayo Apata, on Friday disclosed that the FG had already instructed its lawyers to initiate appeal proceedings against the judgment at the British court.
Apata, while assuring that the Federal government would do everything possible to defend vigorously its interest and that of the people of Nigeria, hinted that part of the move is to seek for a Stay of Execution of the said judgment, adding that the issue is a current litigation issue in the United States of America.
“As regards the recent Judgment of the English Court of 16 August 2019, the Federal Government’s Counsel have been instructed to pursue an appeal on the judgment of the English Court dated 16 August, 2019 and at the same time seek for a Stay of Execution of the said judgment.
“In view of the above, please be informed that the Federal Government of Nigeria is making vigorous efforts to defend its interest in this matter and would not relent in exploring every viable option in doing so”, the statement read in part.
P&ID had dragged the Federal government and the Ministry of Petroleum Resources to court over alleged breach of a agreement entered in 2010 by Nigeria to supply gas to a processing plant built and run by P&ID in Calabar.
The agreement was for a 20-year deal but the Nigerian government failed to keep to her own side of the agreement, prompting the legal action against the country.
But in the statement issued to journalists, Apata disclosed that since the matter came up the government has continued to “pursue the validity of its jurisdictional defense as a preliminary matter which must be conclusively resolved prior to any consideration of the merit argument up to the Court of Appeal”.
The Federal government had continued to maintain that P&ID never began the construction of the project facility for which it claimed about $40m in preliminary expenses.
The FG said the firm’s claim in the arbitration proceedings was mainly for loss of profit for the entire twenty-year term of the GSPA, “initially claiming the sum of US$1.9 Billion and later increasing its claim to US$5.9bn.
Apata however disclosed that though the Arbitral Tribunal had on 31st January 2017 rendered its Final Award against the Ministry of Petroleum Resources in the sum of US$6.597bn together with pre-award interest at the rate of 7% per annum effective from March 20, 2013 and post award interest at the same rate till date of payment, the government had challenged the decision.
“In granting the huge arbitration award against Nigeria the tribunal decided the following:
i. that the project would operate at 93% uptime during the twenty year of the GSPA despite the well-known risks of operating such a project in the Niger-Delta.
ii. that the average price of Natural Gas Liquids (the main revenue earner for P&ID assuming the GSPA had been implemented), should be based on an average oil price in excess of $100 per barrel over the twenty-year life of the project;
iii. to apply a discount rate to P&ID’s supposed lost profits of 2.65%, the same interest rate paid on United States treasury notes thereby adjudging P&ID, a start-up company that never commenced any physical work on the project but planned to operate in the midst of the Niger-Delta crisis, using a novel and unproven technology, a virtually “risk free” investment.
“Upon the Award, P & ID commenced recognition and enforcement proceedings of the arbitration award against FGN in March 2018 in both the United Kingdom (“UK”) and the United States of America (the “United States”).
“The FGN is duly represented in the proceedings in the United States by the Law Firm of Curtis, Mallet-Prevost, Colt & Mosle LLP which also tepresented it in the UK proceedings of which judgement was given on 16th August, 2019 in favour of the P&ID to commence enforcement proceeding against the FGN assets in the UK.
“Recall further that this matter was inherited from the previous Administration by the present one. Upon inheriting this matter, this Government engaged the renowned US Law Firm of Curtis, Mallet-Prevost, Colt & Mosle LLP to defend the interest of the FGN. The Law Firm has taken step to defend the proceedings in the United Stated by urging the District Court to dismiss the P&ID application for enforcement of the award on the ground that Nigeria as a sovereign state has an absolute right to obtain an authoritative determination of its sovereign immunity.
“The FGN therefore demanded that the jurisdictional issue must be conclusively resolved before Nigeria may be required to litigate the merits of P&ID’s petition.