The Federal Republic of Nigeria v Process & Industrial Developments Ltd
| Jurisdiction | England & Wales |
| Judge | Robin Knowles J CBE |
| Judgment Date | 23 October 2023 |
| Neutral Citation | [2023] EWHC 2638 (Comm) |
| Year | 2023 |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Claim Nos. CL-2019-000752 and CL-2018-000182 |
[2023] EWHC 2638 (Comm)
THE HON Mr Justice Robin Knowles CBE
Claim Nos. CL-2019-000752 and CL-2018-000182
IN THE HIGH COURT OF JUSTICE
THE BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
In an Arbitration Claim
Rolls Building,
Royal Courts of Justice,
London
Mark Howard KC, Philip Riches KC, Tom Ford, Tom Pascoe and Sebastian Mellab (instructed by Mishcon de Reya) for The Federal Republic of Nigeria
Lord Wolfson of Tredegar KC, Alexander Milner KC, Henry Hoskins and Max Evans (instructed by Quinn Emanuel) for Process & Industrial Developments Limited
Hearing dates:
–19, 23–26, 30–31 January; 1–2, 6–9, 13–17, 20–24, 27 February; 6–9 March 2023
(as handed down physically in open court, and electronically by email to the parties, and by publication in the National Archives)
Robin Knowles J CBEIntroduction
On 11 January 2010, in Nigeria, a document was signed between two parties, one a state and one a company.
Twenty pages long, not counting a schedule of works that was proposed to be attached, the document bore the title “Gas Supply and Processing Agreement for Accelerated Gas Development” (“the GSPA”).
One party to the GSPA was the Federal Government of Nigeria (“Nigeria”). Nigeria did almost nothing to perform the GSPA after signing, but, according to Nigeria, neither did the other party.
On the face of things, a dispute followed and then an arbitration to resolve that dispute. The result, according to the decision of an arbitration tribunal in 2017, was that Nigeria owed the other party US$6.6 billion, a sum so vast that it is material to Nigeria's entire federal budget. With interest at the rate awarded by the Tribunal, the amount now exceeds US$11 billion.
The other party to the GSPA was a company registered in the British Virgin Islands. Its name was Process & Industrial Developments Limited (“P&ID”). It was one of many companies co-founded by two Irish businessmen, Mr Michael Quinn and Mr Brendan Cahill.
The GSPA has its place part of the way along a timeline that spans two decades. Nigeria had a chronic shortage of electric power. Yet gas from the recovery of oil in Nigeria was being flared rather than used to generate electricity, causing harmful pollution in the process. The GSPA came as Nigeria embarked on a policy named the Accelerated Gas Development Project to tackle this.
As summarised by the parties, under the GSPA Nigeria was to supply specified quantities of “wet” gas to Gas Processing Facilities (GPFs) constructed by P&ID. P&ID was to strip the wet gas into “lean” gas, to be delivered to Nigeria to be used for power generation. The remaining natural gas liquids were to be retained by P&ID for onward sale either domestically or by export.
The stated duration of the GSPA was 20 years (or more, on one scenario). It is common ground that in the event Nigeria did not supply any wet gas to P&ID, and nor did P&ID construct any Gas Processing Facilities.
In the third year of the GSPA, the arbitration (“the Arbitration”) was commenced by P&ID against Nigeria, relying on an arbitration clause in the GSPA. The arbitral tribunal (“the Tribunal”) was of the greatest experience and standing. Sir Anthony Evans was nominated to the Tribunal by P&ID. Chief Bayo Ojo SAN was nominated by Nigeria. Lord Hoffmann was appointed Chairman on 29 January 2013.
After rejecting a challenge to its jurisdiction, the Tribunal in due course found, by a part final award dated 17 July 2015 (“the Award on Liability”), that Nigeria had committed a repudiatory breach of the GSPA, that the GSPA was terminated on P&ID accepting that repudiatory breach, and that Nigeria was liable in damages. The Tribunal published a further award dated 31 January 2017 dealing with quantum (“the Final Award”). Chief Ojo SAN published a dissenting opinion. The Final Award required Nigeria to pay P&ID US$ 6.6 billion. Interest was awarded at the rate of 7%.
Before this Court, the Commercial Court in London, Nigeria challenges the Award on Liability and the Final Award (“the Awards”), and an award on jurisdiction. It makes allegations of bribery, corruption and perjury. The allegations extend to the GSPA, but they then extend further across the arbitral process as a whole from arbitration agreement to Final Award.
The allegations by Nigeria include allegations of bribery and corruption by P&ID before, at and after the time the parties entered into the GSPA. It alleges that some of its own lawyers at the time of the arbitration, including two Leading Counsel, were corrupted by P&ID. The allegations extend further still to early stages of the challenge before this Court. In turn, for its part, P&ID expressly describes Nigeria's case against it as “false and dishonest”.
I address Nigeria's challenge and P&ID's defence in this judgment. The judgment follows an 8-week hearing by way of trial in the first quarter of this year. I intend no criticism of the legal teams when I record that Nigeria made almost every allegation it could. The express concessions by either Nigeria or P&ID were limited. I have read and listened to extensive evidence from witnesses of fact, including rigorous cross examination of witnesses tendered by P&ID. There has been evidence from expert witnesses, and argument from legal teams of true distinction, experience and expertise. A large amount of documentation, some of it incomplete, has had to be reviewed and re-reviewed, including in the months after the hearing. Many of these features are highly unusual in the context of the proper limits to the role of the Court where the parties have chosen arbitration.
But this is a highly unusual case, although one that draws attention to matters of wider importance. Quite apart from the consequences for the parties, the matter touches the reputation of arbitration as a dispute resolution process.
Some preliminary, general, points on the evidence
The documents available through the process of disclosure have illustrated the importance of that process to a fair trial, and to achieving a just outcome. I will return to that point.
I consider it important to observe that crucial documentation, some damaging to P&ID, was disclosed by P&ID, and without it material parts of some of the progress made by Nigeria would have been difficult. By the time of the trial the level, detail and content of disclosure by P&ID showed it, under supervision of its present solicitors Quinn Emanuel who took over at a late point, respecting its duties and (where made) orders.
However I still cannot be confident about the completeness of disclosure, and that is on either side. I acknowledge that some of the gaps in documentation may be accounted for by poor custodianship and by loss over time.
I have striven to consider all evidence in context, and with regard to the age and complexity of events. I have had close regard to consistency of witness testimony with the documentary record where a record exists and appears to be reliable.
Witnesses called by P&ID were cross examined over a number of weeks by Mr Mark Howard KC and Mr Philip Riches KC, leading for Nigeria at the trial. That cross examination was rigorous; part of a “powerful and unforgiving microscope” was how P&ID put it. I have made allowance where appropriate for the demanding style of the cross examination when assessing the witness testimony. At some points the cross examination included questions that invited views from witnesses of fact rather than their recollection or claimed recollection, with the result that some exchanges were not of evidential value (I say this with no lack of respect and with genuine understanding of how demanding was the task of questioning in this case). Some observations on individual witnesses appear in the course of the judgment.
The witness evidence that could have been available to the Court has been limited by the deaths of a number of significant individuals, among them Mr Michael Quinn (who died in 2015), his son Mr Lloyd Quinn (who died in 2014), Dr Lukman (who died in 2014), Mr Hitchcock (who died in 2015) and Mr Tijani (who died in 2021). P&ID did not call all the witnesses it could. But the witness evidence has also been limited by Nigeria's decision to tender no witnesses of fact for cross examination.
At various points I am asked to accept there is a case to answer on an issue, and to draw adverse inferences from the absence without good reason of a witness who could otherwise have given material evidence. I approach the question whether it is appropriate to draw such an inference as one requiring judgment based on “common sense” and depending on the circumstances of this individual case: Royal Mail Group Ltd v Efobi [2021] UKSC 33, [2021] 1 WLR 3893 per Lord Leggatt at [41]. In the result I have not found it appropriate to draw adverse inferences. I have considered each “missing witness” in turn before reaching that judgment, and explain the most material instances below. The fact remains that neither party chose to put before the Court all relevant witnesses; each (as it was entitled to do) called the witness evidence it wished to call. In this overall sense the playing field was level.
The expert evidence was principally in the fields of chemical engineering, project finance and Nigerian law. Expert evidence on the cash economy in Nigeria was also provided by Nigeria and not challenged by cross examination from P&ID. The expert evidence contributed useful background but was ultimately not central to the issues that I have found to be decisive. I am grateful to each expert and did not regard one expert as more reliable than another.
Dishonesty
I am asked to make many findings of dishonesty.
I...
To continue reading
Request your trial
-
Gabriele Volpi v Delanson Services Ltd
... ... judicata — Issue Estoppel — Abuse of process — Procedural Fairness Section 90 — ... business is in the oil and gas sector in Nigeria. The business is conducted through a Nigerian ... It was incorporated in the Republic of Panama in October of 2006 under the name ... enterprises or companies operating in industrial or commercial sectors of any nature ... (amongst other foreign courts) the German Federal Supreme Court (Bundersgerichstshof), the Federal ... Process & Industrial Developments Ltd. [2023] EWHC 2638 (Comm) .) ... 312 ... ...
-
The Czech Republic v Diag Human SE
...s.32 of the Limitation Act 1980 to s.73 of the 1996 Act is supported by Mr Justice Robin Knowles in Federal Republic of Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638 (Comm), 28 Professor Andrew McGee Limitation Periods 9 th Ed (2022) summarises the applicable law rel......
-
The English High Court Sets Aside Multibillion-dollar Arbitral Award Against The Republic Of Nigeria
...The Federal Republic of Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638 (Comm),1 the High Court upheld a challenge to arbitral awards that had been obtained by fraud. While the facts of the case were highly unusual, the judgment demonstrates the high standard that chall......
-
Nigeria Avoids Payment Of Us$11 Billion Dollar Arbitral Award Debt To P&Id: Is The Legal Battle Really Over?
...To view the full article, click here. Footnotes 1. THE FEDERAL REPUBLIC OF NIGERIA V. PROCESS & INDUSTRIAL DEVELOPMENTS LIMITED [2023] EWHC 2638 (Comm). 2. Ibid at [493] - [497]. 3 Ibid at [574] - [575]. 4 THE FEDERAL REPUBLIC OF NIGERIA V. PROCESS & INDUSTRIAL DEVELOPMENTS LIMITED [2023] E......
-
A Recap Of 2023's Arbitration Highlights In Ghana & Nigeria: An Eye On The Future
...concerning the tribunal's jurisdiction and the seat of arbitration. The tribunal's decision is now being awaited. Footnotes 1. [2023] EWHC 2638 (Comm) 2. See Breaking Barriers in Arbitration Funding: Third-Party Funding as a Risk Management tool under the Arbitration and Mediation Act 2023 ......