Dissecting Rogue Firm’s Failed Bid for Nigeria’s $11bn

RingTrue By Yemi Adebowale

Phone 08054699539

The British High Court ruling on Monday overturning an arbitration award of more than $11billion against Nigeria is an historic result and cornerstone of international efforts to fight corruption. That was how UK’s Law Society Gazette summed up the judgement. Justice Robin Knowles found that the rogue oil and gas company called Process & Industrial Developments Limited (P&ID) obtained the weird 2015 arbitration award of $6.597 billion in UK (which rose to over $11billion because of interest) “only by practising the most severe abuses of the arbitral process.”

The London law firm that led Nigeria’s legal team, Mishcon de Reya, deserves all the praise for brilliantly handling the brief. A partner in the firm, Shaistah Akhtar, remarked that the Nigerian government’s resolve in pursuing a just outcome led to it uncovering overwhelming evidence of bribery and corruption, adding, “we trust that this landmark decision will deter other potential fraudsters and their backers from exploiting the legal system in the pursuit of monetary gain.”

P&ID is clearly a rogue firm. Recall that in 2019, following the arbitration award, the firm ran to Justice Christopher Butcher of a Commercial Court in Britain, seeking to seize assets of the Nigerian government abroad. Even when Justice Butcher had not given any such permission, P&ID went about pushing a narrative that it had approval to seize the assets, all aimed at stampeding the government and people of Nigeria.

On another juncture in 2019, P&ID, registered in British Virgin Islands, pushed out yet another story that it had instructed its lawyers to identify Nigeria’s assets abroad that could be targeted to recover the bogus judgement debt. Haba! Enforcing which award? Who gave them the authority to enforce the award?

Thereafter, P&ID recruited a Lagos public relations firm, to intimidate Nigerians and the Nigerian government, with unending threats to seize the country’s assets abroad. The shameless Public Relations firm kept pushing out false stories about P&ID’s dishonest claims. P&ID and its Nigerian allies were really desperate.

Dubious Nigerians that signed a contract that did not protect this country in case P&ID failed to deliver, also worked for the firm at the Tribunal to get billions of Dollars for job not done. All standard international contracts provide for contingent liabilities on both parties. This was not the case with the illegal P&ID deal struck by these brazen Nigerians in the Ministry of Petroleum Resources, headed then by the late Rilwanu Lukman.

Let’s critically look at the contract to understand why I often refer to P&ID as a reprobate. The failed Gas Supply Processing Agreement (GSPA), which P&ID wanted to use to fleece the Nigerian government, was signed in 2010 by the Ministry of Petroleum Resources. The NNPC was to supply wet gas to P&ID for processing into lean gas for power generation, for a period of 20 years.

According to the GSPA, P&ID was to build two or more plants for the processing of the wet gas into lean gas at no cost to the government since it would be compensated from the proceeds. However, the NNPC failed to build the pipeline to supply gas to the company. P&ID also failed to construct the plant for processing the wet gas. So, the two parties failed to actualise their sides of the agreement. In any case, why would the NNPC pipe wet gas to a non-existing processing plant? It is simple logic. A processing plant must be on ground before anybody can start talking about piping wet gas to the place. Perhaps, the promoters of P&ID wanted the NNPC to pipe the wet gas into their mouths. These are evidently exploitative people. There was no intention to set up any plant in Nigeria. It was just a game to fleece Nigeria, using the flaws in the illegitimate contract.

On August 22, 2012, P&ID filed for arbitration. It accused the federal government of repudiating the contract it entered into with the company. Just as the Buhari government persistently argued, the agreement was on various grounds invalid, subsequently frustrated, varied or discharged by force majeure. P&ID failed to set up a processing plant and turned around to say that the petroleum ministry failed to pipe wet gas to them. Evidently, P&ID did not achieve its own part of the agreement and cannot, therefore, be making dubious claims on Nigeria.

So, why did the arbitration panel approve an award for the full value of what P&ID could have gained when the firm did not invest anything? It was all “arranged” by P&ID, using fraudulent Nigerians. A court in the US looked at this same case in 2015 and threw out the ludicrous enforcement request of P&ID. But the arbitration tribunal dubiously ruled that Nigeria was liable for the failure of the contract and should pay the British firm $6.597 billion as the profit that the company would have made in the 20 years tenure of the contract. This is preposterous. How certain is it that this voodoo firm called P&ID would make unending profit for 20 years?

It is germane to note that P&ID admitted at the arbitration tribunal that it invested just about $40 million on the project, during its two years sojourn in Nigeria. That in itself is dubious. The then governor of the Central Bank of Nigeria, Godwin Emefiele confirmed that there was no evidence of capital importation by P&ID.

Emefiele declared in 2019: “As a foreign company, if you are investing either in a contract or a project in Nigeria, there are various options you will adopt in bringing in your investment. If you are bringing in capital, in which case you are bringing in the money, you will fill Form A and you will also collect a certificate of capital importation. If you are bringing in machines or assets to execute your contract, then in this case, you will fill Form M and also collect a certificate of capital importation to prove that you actually brought in money. We have gone through our records; we do not have any information in our records to show that this company brought in one cent into this country.”

Notwithstanding, to be awarded a $6.597 billion compensation for an unproven $40 million loss is crazy. It was the largest arbitration award in global history.

P&ID did not set out to build plants for the processing of wet gas into lean gas as contained in the agreement signed with Nigeria. It simply connived with dubious Nigerian government officials to sign an illegal contract skewed in its favour. Then, it ran to the UK and filed for arbitration. It was a well-laid out game plan. The main idea is to swindle Nigeria. This has always been the stock in trade of P&ID’s Irish founder/ Chairman, Michael Quinn, who died of cancer in May 2015. The $9.6 billion was to be his biggest dubious pay but Holy Ghost fire snapped him.

Its co-founder, Brendan Cahill, pushed ahead with the game plan. He teamed up with an American hedge fund, VR Capital Group Ltd. that bought a 25 per cent stake in P&ID, hoping that if the move to fleece Nigeria succeeds, it would benefit from it. They have all failed.

I need to unmask late Quinn, for readers to understand this fraud better. It is pertinent to point out that Quinn had previously colluded with Nigerian military officials to profit from a number of government projects that were equally doomed from onset. His collaborators are usually civil servants, lawyers, financial institutions, and politicians. They profit immensely from the deals. This is why his projects often end in litigation.

Quinn started doing suspicious business in Nigeria in the ’70s. He had previously made money from Nigeria for jobs not done through litigation. One of his sham companies, Industrial Consultants brokered a $5 million deal with the Nigerian Air Force in 2010 which failed. An arbitration panel found the military guilty and awarded $2.3 million for work allegedly done.

There was also a $150 million suit against the NNPC over delays in the construction of an oil terminal, which Quinn benefitted from when award was made against Nigeria. The late P&ID chairman also once had a contract with the Nigerian Army to repair scores of tanks and charged them for undelivered tank parts after inflating the cost of the repairs. But nothing happened because he settled those that mattered.

Even in his country, Ireland, late Quinn’s projects often end in disasters. At one point, Quinn and Cahill got a grant worth $450,000 from the Irish government to start a videocassette factory near Dublin. It was never actualised. The project collapsed and money disappeared. At another point, Quinn and Cahill got three million Irish pounds from the European Union to explore cleaner technology for making steel. The project also failed because it was a scam.

At the Arbitration Tribunal in London, Quinn worked on the Nigerian government officials and lawyers to throw the case. They did not defend Nigeria. Besides, there was no point agreeing to arbitration because the contract was a sham; yet, the Nigerian officials agreed to arbitration, working on a deal with Quinn. Based on largely unopposed proof provided by P&ID, Nigeria’s flimsy objections were thrown out by the arbitration panel. For example, Quinn, who took charge at the arbitration panel, claimed he spent $40 million on preparatory work for the gas plant, including a 3D digital model. The Nigerian team did not ask him to provide proof of this. There was also no evidence of capital importation by P&ID. Yet, the Nigerian lawyers were silent on this.

It is also ridiculous that Nigeria called only one witness, a lawyer without firsthand knowledge of any of the relevant events, before, during or after the so-called breach of agreement. The choice of the neutral member of the three-man arbitration panel was also curious. Nigeria nominated Bayo Ojo while P&ID nominated a Briton, Anthony Evans. The so-called neutral member nominated by the two parties was another Briton, Lord Hoffmann.

Why would Nigerian officials agree to the nomination of a Briton as a neutral member of the arbitration panel? This is easy to decrypt. Late Quinn simply fixed it in conjunction with the people who are supposed to defend Nigeria. Of course, the panel delivered judgement and the two Britons – Hoffmann and Evans – gave it to P&ID. They held that Nigeria was liable to $6.597 billion and that became the majority decision. Ojo, a former Minister of Justice and Attorney General of the Federation, in a minority judgement, held that the P&ID was entitled to some compensation but should not be more than $250 million. A firm that claimed to have lost $40 million got $6.597 billion as damages! That is what it means to be a very strong swindler.