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Commercial Court grants “unprecedented” extension of time in US$10bn arbitration award case against Nigeria

Posted on 4 September 2020

The English Commercial Court has today delivered a landmark judgment allowing the Federal Republic of Nigeria (FRN) permission to proceed with its challenge to the $10 billion arbitral award made against it over three years ago. The Court has allowed the FRN to bring this challenge well outside the normal time limits due to the exceptional circumstances where the FRN has uncovered evidence of a massive fraud in procuring the award.

The Court heard evidence from the FRN and the offshore shell company P&ID in relation to the gas supply and processing agreement (GSPA) which the parties entered into 10 years ago and which was never performed. The Buhari Administration, having inherited this dispute from the previous administration, only recently uncovered evidence that the GSPA was a sham commercial deal designed to fail from the start, and that its subsequent arbitral award was based on fraud and corruption. The FRN relied on a number of ongoing investigations across multiple jurisdictions, including the US, to build its case. During the hearing, new evidence was presented to further support the FRN's challenge.

The Judge, Sir Ross Cranston, found that: "Nigeria has established a strong prima facie case that the GSPA was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria. There is also a strong prima facie case that P&ID’s main witness in the arbitration, Mr Quinn, gave perjured evidence to the Tribunal and that, contrary to that evidence, P&ID was not in the position to perform the contract. As to the Jurisdiction and Liability stages of the arbitration, there is a prima facie case that they were tainted by the conduct of Nigeria’s advocate, Mr Shasore. … It seems to me that Nigeria has made a good case that, at the time it took part or continued to take part in the arbitration, it did not know and could not with reasonable diligence have discovered the grounds it now advances."

This is a significant win for the FRN as well as the Court system, as Sir Ross Cranston stated: “Not only is the integrity of the arbitration system threatened, but that of the court as well, since to enforce an award in such circumstances would implicate it in the fraudulent scheme.”

The FRN will now proceed to a full trial of the issues where the FRN's substantive application to finally set aside the award will be heard.

Shaistah Akhtar, the lead Partner from Mishcon de Reya who represented the FRN said; "This is an unprecedented decision by the Commercial Court, where a party has been granted an exceptional extension beyond the usual 28 days to set aside an arbitral award – in this case more than 3 years after the quantum award was made and more than 5 years after the liability award was made.  This outcome is of particular significance in symbolising progress in Nigeria's war against corruption.  We are extremely pleased with the result, and look forward to continuing work on the substantive application to set aside the award."

A spokesperson for the Attorney General of the Federation said:

The Federal Republic of Nigeria is pleased with the outcome from the High Court hearing today. This is a major victory in our ongoing fight against the vulture-fund-backed P&ID, to overturn the injustice of the multibillion dollar arbitral award. In light of the new and substantive evidence presented regarding P&ID’s fraudulent and corrupt activities, the Court has granted our application for an extension of time to hear our challenge out of normal time limits. We will now proceed to a full hearing of our fraud challenge in the coming months.

Investigations into the GSPA are ongoing, and we are firmly committed to overturning the award – no matter how long it takes – to ensure that this money goes towards Nigeria's future, not into the pockets of millionaires trying to exploit our country."

Related Coverage

Statement from the Presidency of Nigeria
This Day
Global Arbitration Review
Financial Times


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