The Federal Republic of Nigeria v Process & Industrial Developments Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Ross Cranston |
| Judgment Date | 04 September 2020 |
| Neutral Citation | [2020] EWHC 2379 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2019-000752 |
| Date | 04 September 2020 |
[2020] EWHC 2379 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
IN AN ARBITRATION CLAIM
AND IN THE MATTER OF APPLICATIONS UNDER S.67 AND S.68 OF THE
ARBITRATION ACT 1996
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Ross Cranston sitting as a Judge of the High Court
Case No: CL-2019-000752
Mark Howard QC, Philip Riches QC and Tom Pascoe (instructed by MISHCON DE REYA LLP) for the Claimant
Ian Mill QC and Siddharth Dhar (instructed by KOBRE & KIM (UK) LLP) for the Defendant
Hearing dates: 13 and 14 JULY 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Sir Ross Cranston sitting as a Judge of the High Court:
Introduction
These are applications by the Federal Republic of Nigeria (“Nigeria”) for an extension of time to bring challenges under sections 67 and 68(2)(g) of the Arbitration Act 1996 (“the 1996 Act” or “the Act”). There is a related application for relief from sanctions to adduce new evidence in response to an enforcement application. The hearing before me was by order of Butcher J in The Federal Republic of Nigeria v Process & Industrial Developments Limited [2020] EWHC 129 (Comm). It occurred over two days but, as I explain shortly, there were later written submissions about what was said to be new evidence.
These challenges and the enforcement application concern arbitral awards by a London Tribunal relating to a gas processing contract (“the GSPA”) between Nigeria and Process & Industrial Developments Limited (“P&ID”) dated 11 January 2010. The Tribunal's Final Award of 31 January 2017 ordered Nigeria to pay P&ID damages of US$6.6 billion, as well as pre- and post- judgment interest at 7 percent. The current outstanding amount is some US$10 billion.
Nigeria's case for an extension of time is that the GSPA, the arbitration clause in the GSPA and the awards were procured as the result of a massive fraud perpetrated by P&ID, and that to deny them the opportunity to challenge the Final Award would involve the English court being used as an unwitting vehicle of the fraud. P&ID's case is that the awards date back some three to five and a half years and it would be unprecedented to grant the extensions. Speed and finality are essential features of London arbitration and the case that there has been any fraud (which is denied) is at best weak.
The parties have produced a large volume of documents, some thirty-four bundles with hundreds of pages of evidence and thousands of pages of exhibits. It is not my function at this preliminary stage to decide whether a fraud took place. As Butcher J pointed out in ordering the hearing, it would tend to defeat the purposes of the 1996 Act for there to be a substantial investigation of the merits at this stage: at [30]. However, it has been necessary to consider a considerable amount of the material to decide firstly, whether, as Nigeria contended, there is a prima facie case of fraud and how strong that case is, and secondly, the steps Nigeria took to investigate the alleged fraud from late 2015. Both matters are relevant to the issues of whether Nigeria's claim is barred altogether and whether time should be extended in its favour and relief from sanctions granted.
Following the hearing, P&ID submitted a Supplementary Note to comment on new evidence which it said had only now come to its attention, in particular a letter dated 5 June 2020 from Nigeria's Attorney General and Minister of Justice, Mr Abubakar Malami SAN, to President Buhari. P&ID contended that the letter strongly supported the case it advanced at the hearing. On 21 August Nigeria sent a Note in response, together with the eighth witness statement in the proceedings from Mr Malami. The material is considered later in the judgment.
Background
P&ID and Project Alpha
The defendant, P&ID, was incorporated in the British Virgin Islands (“BVI”) on 30 May 2006 by Michael Quinn and Brendan Cahill, both Irish citizens. In July 2006 an associated company, Projects & Industrial Developments (Nigeria) Ltd (“P&ID Nigeria”), was established. P&ID had no assets, only a handful of employees, and was without a website or other presence.
Messrs Quinn and Cahill had a number of other companies relevant to this case, including an Irish company, Industrial Consultants International Ltd (“ICIL”). There was also Lurgi Consult Ltd (“Lurgi”), a Cypriot consulting company in the oil and gas industry. Its Nigerian counterpart had as its directors Adam Quinn, Mr Quinn's son, and James Nolan. Other associated companies appear in the course of the judgment.
The narrative conveniently begins on 27 June 2006, when P&ID signed an engineering service agreement with General T. Y. Danjuma (retired), a prominent Nigerian businessman, for the undertaking of what was called Project Alpha. That was followed by a further engineering service agreement of 6 September 2006 with General Danjuma's company, Tita-Kuru Petrochemicals Ltd (“Tita-Kuru”). Project Alpha concerned the design of a polypropylene plant in Badagry, south-west Nigeria.
In a letter to the Economic & Financial Crimes Commission (“EFCC”) dated 20 September 2019, Tita-Kuru states that one aspect of the arrangements with P&ID was that it would organise a gas offtake agreement from the Folawiyo gas field at Badagry, but that it later informed Tita-Kuru that it was unsuccessful in doing this. The letter continues that Mr Quinn of P&ID suggested that the engineering work undertaken could be used for a similar gas stripping plant at Calabar, capital of Cross River State in south-east Nigeria. The letter continues:
“3.1.6…We are therefore persuaded the studies, technology licencing fees and engineering designs that formed the basis of P&ID's presentation to the Federal Ministry of Petroleum Resources were, in fact, ours…
3.2.2…[A]s per the matters in paragraph 3.1.6 hereof, we had paid the sum of $40m (Forty Million USD) to P&ID for the development of the Engineering work, Design and Off-take Consultancy Services which P&ID later used in their presentation to FMPR [Federal Ministry of Petroleum Resources] to secure the now disputed [GSPA].”
The letter also explains that there had been a falling out between Mr Quinn and General Danjuma but that later a memorandum of understanding was signed.
Steps leading to the GSPA
The reference in the Tita-Kuru letter to P&ID's presentation to the Federal Ministry of Petroleum Resources (“MPR” or the “Ministry”) is to one of the steps in the negotiation of the GSPA. In October 2008 Mr Quinn made a power-point presentation at the Ministry. Slides 5 and 6 were computer aided design drawings, entitled “Propylene & Butane for Export, Phase 1” and “Propylene & Butane for Export, Phase 2”. They were both marked in boxes in the right side, lower corner, “Project Alpha”.
Another step was that P&ID had written to Nigeria's President Yar'Adua with a formal proposal on 7 August 2008. (Nigeria does not admit that this letter was sent.) Amongst other points the letter stated that:
“we are willing to fund, from our own resources, the entire US$700,000,000 for the gas processing facilities on land and we are also willing, if necessary, to participate in all or part of the financing of the gas gathering offshore portion of the project…”
On 18 December 2008 Dr Rilwanu Lukman was appointed as Nigeria's Minister of Petroleum Resources.
The following year there was correspondence and meetings between P&ID and members of the technical committee of the Ministry, among whose members were Dr M M Ibrahim (special senior technical assistant and head of policy at the government's Oil & Gas Sector Reform Implementation Committee) and Mr Taofiq Tijani.
In June 2009 Mr Quinn wrote to the office of the Minister of Petroleum Resources, for the attention of Dr Ibrahim, enclosing P&ID's letter to the Ministry in mid-March “detailing our expenditure of more than 40 million US dollars to date on the project”.
There was a Memorandum of Understanding (“MOU”) signed on 22 July 2009 between the Ministry and P&ID Nigeria regarding the GSPA project.
On 1 December 2009 Dr Ibrahim sent a letter to P&ID indicating that Dr Lukman had “directed all stakeholders [to] fast track their processes”.
Just over a fortnight later, on 18 December 2009, Ms Grace Eyanena Taiga, legal director of the Ministry, sent a note to Dr Lukman advising him to sign the GSPA with P&ID. She wrote: “Subject to your comments to the contrary, I advise that HMPR [the Minister] signs these Draft Agreements to ensure a leap forward for Short Term Gas operations in the country as directed by Mr President.”
In his fourth statement for the court the Attorney General of Nigeria, Mr Malami, states that the GSPA did not obtain the requisite authorisation of the Bureau of Public Procurement or consent of either the Federal Executive Council or the Infrastructure Concession Regulatory Commission. Nor was it registered with the National Office for Technology Acquisition and Promotion. In his seventh statement, the Attorney General states that the individual at the Ministry responsible for compliance with these procedures was Ms Taiga.
The GSPA and immediate aftermath
The GSPA was entered into between Nigeria and P&ID on 11 January 2010. It was signed by Dr Lukman on behalf of Nigeria. His signature was witnessed by Ms Taiga. Mr Quinn...
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