EXPLAINER: How Nigeria got hit with a $9.6 billion judgment debt in London
The big question is: What went wrong? How did Nigeria end up in this costly situation? For the answer, we must look back to January 2010 and a gas supply contract that went horribly wrong.On 11 January 2010 Process and Industrial Development , a company based in the British Virgin Islands, signed a contract with the Federal Government of Nigeria. This contract is called a gas supply and processing agreement.
Based on this agreement, Nigeria was supposed to arrange for the supply of wet gas to P&ID’s gas processing facility which it intended to build in the country’s Cross Rivers State. This required the government to construct pipelines and arrange facilities for transporting the wet gas. The government failed to do this for three years.
Similarly, the government objected to the measure of estimated expenses and income stream which P&ID used to calculate its damages claim.In July 2015 the tribunal decided that by failing to fulfil its obligations, the government had repudiated the agreement. P&ID was therefore entitled to damages. Following the tribunal’s award of damages, in March 2018, P&ID brought an action before the Queen’s Bench Division of the English Commercial Court. It wanted permission to enforce the damages awarded by the tribunal. Despite delays by the Nigerian government, on 16 August 2019, the court made an order enforcing the tribunal’s final award which now stands at about $9.6 billion.
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