Nigeria and the $11 Billion Scam

Nigeria and the $11 Billion Scam

Verdict By Olusegun Adeniyi

I had just arrived Abuja from Beijing, China on Monday when news broke that Nigeria won its case against Process & Industrial Developments (P&ID) Limited, which had been seeking enforcement of a controversial $11 billion judgement debt in its favour. The Commercial Courts of England and Wales upheld Nigeria’s prayer that the said gas processing contract was obtained by fraud. The judgement affirms the position of Nigeria’s lawyer, Mark Howard, that P&ID obtained the contract “by telling repeated lies and paying bribes to officials.”

While we should rejoice about the court victory, I hope President Bola Tinubu, his Attorney General, Lateef Fagbemi, SAN, and other senior officials paid attention to the careful words of Justice Robin Knowles about public service in Nigeria. “This case has also, sadly, brought together a combination of examples of what some individuals will do for money. Driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others,” the Judge said before breaking it down for those who may not get his message. “Others that in the present case include the people of Nigeria, already let down in so many ways over the history of this matter by a number of individuals in politics and administration whose duty it was to serve them and protect them.” 

When on 3rd September 2020, Sir Ross Cranston of the UK High Court of Justice Queen’s Bench Division Commercial Court granted Nigeria’s application for an extension of time to fight the case based on new evidence, three things became evident. One, had the P&ID promoters and their Nigerian collaborators not been too greedy, they probably would have walked away with about $400 million loot and an oil block. But they insisted on $2 billion and now they have nothing! Two, former Vice President Yemi Osinbajo was instrumental to the temporary reprieve Nigeria secured at the time and should take the credit for Monday’s final judgement. Three, because the P&ID scammers were targeting Central Bank of Nigeria (CBN) assets, the suspended Governor, Godwin Emefiele, took the lead in the efforts to have the judgement upturned. Unfortunately, when the statement read at the Villa by Fagbemi on Monday was being drafted, according to an impeccable source, it was resolved that credit should not be ascribed to certain individuals. Such pettiness!

Before I come to the role played by Osinbajo and CBN under Emefiele as well as the critical lesson that should serve authorities in Nigeria about this judgement, let me also claim some vindication. I took special interest in the case because this scam was consummated in January 2010 under the administration of the late President Umaru Musa Yar’Adua who was then in a Saudi Arabia hospital. When in my 5th September 2019 column, ‘Yar’Adua and the $9.6 Billion Question’ I defended my late principal, I got some angry responses from those I suspected were working for (or at least sympathetic to) the P&ID scammers. The company’s main promoter, the late Michaeal Quinn (who died of cancer in 2015) was known to many top Nigerians and a few believed they should defend him despite overwhelming evidence that he wanted to dupe Nigeria. Now that Justice Knowles has confirmed the whole scheme to be a fraud, I seek the indulgence of readers to rehash excerpts from what I wrote more than four years ago before I conclude.  


Even before receiving inquiries regarding the controversial $9.6 billion judgement that has become a Sword of Damocles over Nigeria, I was already digging to find out what happened. Late President Umaru Musa Yar’Adua, under whose administration the said contract was signed, is not around to defend himself so I felt an obligation to know the extent of his involvement, if any. The first person I reached out to was Mr Tanimu Yakubu, Yar’Adua’s Chief Economic Adviser and close confidant who also had the gas assignment. 

In my 2011 book, ‘Power Politics and Death’ I wrote: “…It was at the margin of the 33rd G8 summit in Germany in June 2007 that the then Russian President, Mr. Vladimir Putin, had a brief chat with Yar’Adua. He bluntly told the president that Nigerian officials were denying a level playing field to Gazprom (the Russian state oil and gas company regarded as the largest extractor of natural gas in the world) which was having difficulties gaining entrance into the nation’s oil and gas industry. Putin told the president he had information that Nigerian government officials, in collaboration with Shell, were deliberately making it impossible for Russian and Chinese IOCs to operate in the country. This was a serious allegation that could not be taken lightly. Upon return from the summit, the president directed Tanimu to monitor and provide him with feedback on NNPC’s proposed partnership with Gazprom until appropriate protocols were signed.” 

Following that encounter in Germany, Tanimu travelled to Moscow to open discussions with Russian gas authorities. That he had no idea about this contract is very telling. The then Attorney General and Justice Minister, Mr Michael Kaase Aondoakaa, SAN, has also put it on record that he knew nothing about it. Meanwhile, those who served in the administration of the late Yar’Adua knew that when it came to contracts, one man had the last say: Engineer Emeka Ezeh, then Director General of the Bureau of Public Procurement (BPP). Without a Certificate of No Objection from the BPP, no contract would be awarded. Ezeh, one of the few officials in whom the late Yar’Adua had implicit confidence, told me on Tuesday that he only became aware of the contract when the scandal broke out. He then proceeded to give me a copy of the BPP law and a relevant document which puts a serious question mark on the judgment. ‘The Approved Threshold’ given to the ‘Tenders Board and Accounting Officers (Permanent Secretaries and Chief Executive Officers) of all Ministries, Departments and Agencies (MDAs)’ were specific on the amounts that could be approved without recourse to BPP. Under ‘Special Works (NNPC)’, it is stated very clearly that any oil and gas contract that is worth $20 million and above must go to the Federal Executive Council (FEC) and secure the BPP Certificate of No Objection before approval. 

We still do not know the exact sum of this vexatious deal. Yet P&ID was reported to have spent approximately $40 million in pre-contract expenditures. The $9.6 billion Nigeria is expected to pay is made of a $6.59 billion profit the company claims it would have made over a life project of 20 years and the balance of $3 billion accumulated interest since 2012 when the judgement was given. It is interesting that it would take some ‘Oyinbo’ people to teach Nigerians the real meaning of ‘419’! 

According to their statement, “P&ID and the Nigerian Government entered into a 20-year Agreement – known as the Gas Supply and Processing Agreement (GSPA) – to refine natural gas for powering Nigeria’s electricity grid. The GSPA would have been very profitable for both P&ID and Nigeria and have generated an additional 2,000 megawatts of power for the national grid. Such a major increase in low-cost electricity supply brought by the P&ID project would have been transformative for millions of Nigerians.” Should these extraordinary benefits meant to accrue to the country not have elicited publicity on the day the deal was sealed? Do you sign such a contract in secret with intended beneficiaries, in this case Nigerians, not told of their good fortune?  

In a damning report published yesterday, ‘Is one of the world’s biggest lawsuits built on a sham?’, Bloomberg Businessweek, a globally respected American weekly business magazine, not only exposed the sordid contract for what it is, but the writers also provided evidence as to why Nigeria must fight it. The intro sums it up: “A dying Irishman went for one last big score in Nigeria. The project failed, but a London tribunal says his company’s owed $9 billion and counting.” 

However, the matter has now become complicated. I understand that it was when the claimant, P&ID, appointed their Arbitrator that President Goodluck Jonathan became aware of the issue and the Ministry of Petroleum Resources then appointed Mr Bayo Ojo, SAN, a former Attorney General and Justice Minister as a party nominated arbitrator to constitute the Arbitral Tribunal. By the time the sum of $850 million was finally agreed as the term of settlement in May 2015, the government was on its way out. Rather than pay what could have been used against him, Jonathan rightly decided to push the matter to President Muhammadu Buhari.  

I have it on good authority that the late Yar’Adua never met anybody from P&ID, and this can be easily verified by the current administration. All the records of visitors to the villa are kept. While I concede that some officials might have taken advantage of the president’s illness to breach their fiduciary duties to our country, the insinuation that the fiasco came about because Yar’Adua was in ‘coma’ lacks any substance. Even if he were in Nigeria at the time, presidents don’t sign contracts. That some imaginary Yar’Adua cabal entered the deal is also false. What is clear to me is that P&ID propagandists as well as government officials who dropped the ball are on overdrive because those who would have disputed their claims are dead.  

There are many things begging for answers here, including the process that led to such ‘agreement’ as well as the terms and conditions. The quantum of the award also raises questions about the integrity of the Arbitral Tribunal. Do you award anticipatory profit recoverable over 20 years, especially when neither risks nor obligations were put on the partner? It is trite to argue that before committing a country to anything that has financial implications, the Ministry of Finance, the AGF and the office of the president must be involved, not just the supervisory ministry. In this case, none was involved. Even if it is Public Private Partnership (PPP) arrangement, the Infrastructure Concession Regulatory Commission (ICRC) must also be involved. It was not, either. 

Whatever the eventual outcome, we can take certain lessons from the unfortunate saga. One, we must put in place a well-articulated National Arbitration Policy. Two, all pending arbitrations should be reviewed with special attention to the ongoing International Chamber of Commerce (ICC) case in Paris concerning the Mambilla Hydroelectric project. Finally, we must institute measures to ensure that Nigerian public officials who sign contracts on behalf of the rest of us do not sell the country cheap. Tying us to scandalous obligations after trading away the jurisdiction for arbitration in case of legal redress is the kind of action that would normally attract capital punishment for erring public officials in some countries! 


In the euphoria of the moment, the Tinubu administration should not get carried away. Over the years, Nigeria has paid billions of Dollars on spurious judgement debts, and I understand many scammers were also waiting in the wings to pounce had we lost this case to the P&ID. What these international crooks (and local collaborators) do is to get some Nigerian public officials, target a thriving sector, sign some dubious ‘agreements’ that are skewed against Nigeria, wait for some time, and then approach the courts for enforcement. That’s how many idle billionaires have been created in the country.  

Meanwhile, after the CBN had been made to deposit $200 million in court in 2020, Emefiele was involved in hiring fresh British lawyers to fight Nigeria’s case. I understand that to date the CBN has expended about $40 million on legal services. The late former Chief of Staff to the president, Abba Kyari and former EFCC Chairman, Ibrahim Magu also played critical roles for Nigeria to establish a case of fraud on this transaction. But the main man on this issue is Osinbajo. In his 2020 ruling, Justice Cranston admitted that Osinbajo’s ‘fraud on the nation’ declaration in June 2018 turned the table against P&ID in Nigeria’s favour. According to Cranston, Osinbajo’s involvement began in 2017 after he was intimated by the then Attorney General of the Federation and Justice Minister, Abubakar Malami, SAN. 

Let’s hear from the Judge: “Following a meeting, on 13 March 2017, Mr Malami wrote to Vice President Osinbajo, who was acting president at the time, exploring five ‘scenarios’ and making recommendations on each. The first was to negotiate a reasonable settlement. The second was to undertake a ‘forensic and extensive examination of the original contract, Award and other Processes to discover loopholes to upset or vary the Award.’ The merits were said to be that a loophole might be discovered, for example, fraud, technical grounds, or a conflict of interest of the arbitrators. The other options were to inquire whether there was the possibility of an appeal, an investigation by the EFCC and a challenge to the recognition and enforcement of the award.”

On 17 March 2017, according to the Judge, Malami wrote another letter to Osinbajo on the earlier scenarios: “Scenario 1 was now expressed as ‘the urgent need’ (emphasis in original) to negotiate a settlement. The scenario about involving the EFCC was that it should be directed to undertake a discreet investigation of the matter, and also to ascertain the personalities and beneficiaries behind P&ID. There was a further letter from Mr Malami to the Vice President dated 29 March 2017. On 6 April 2017 the Vice President approved in manuscript on the letter its proposal to pursue settlement negotiations. There followed on 16 May 2017 (and afterwards) without prejudice settlement discussions with P&ID. After P&ID stated in September 2017 that it intended to enforce the Final Award, on 7 December 2017 the Vice President granted approval to negotiate further. However, settlement negotiations broke down. The Attorney General, Mr Malami, together with then Minister of State for Petroleum Resources, Mr Emmanuel Kachikwu wrote to the Vice President on 23 May 2018 in light of US enforcement proceedings which P&ID had initiated, recommending the reopening of negotiations with P&ID while efforts were being made as regards the enforcement proceedings. On 12 June 2018, the Vice President’s office reported that he had agreed with the recommendation and would take up the matter with the President. That same day, 12 June 2018, the Vice President wrote to the President recommending the reopening of negotiations with P&ID. The President approved this recommendation on 26 June 2018.” 

All the offers made to the P&ID promoters failed because they thought they had Nigeria by the balls. According to Justice Cranston, in his minute to the 23 May 2018 joint memo by Malami and Kachikwu, Osinbajo said he considered the transaction ‘a fraud on the nation’, and that there might be “a need to independently review and investigate the entire affair more diligently”. That was the turning point because Osinbajo then recommended to Buhari that the judgement should be challenged. With Emefiele buying into the idea, CBN decided to fund the legal fees. Now that Osinbajo has been vindicated, it is shameful that Fagbemi could not summon the decency to acknowledge the role played by the former vice president. But history will be kind to Osinbajo on the issue. The same goes for the CBN under Emefiele who is currently being punished for his political foolishness.  

Overall, if there is anything that the P&ID scam has exposed, it is that in the Nigerian deep state, there exists a corps of bureaucrats who specialize in misleading political leaders on technical contracts for their personal gain. The minimum responsibility of the Tinubu government therefore is to expose and prosecute all the traitors who abused their fiduciary duties to the country for illicit gains. Charges should also be filed against the foreign scam artists at P&ID to deter those who have made a career of duping our country. Beyond that, we must begin to build a new culture of ethics in the Nigerian public space.

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