24/10/2023
Nigeria successful in challenge centred on the “most severe abuses of the arbitral process”
Nigeria has prevailed in its efforts to challenge a US$11 billion award, with Philip Riches KC acting for Nigeria, instructed by Mishcon de Reya.
In his judgment, Mr Justice Knowles set out what he described as the “remarkable, but very real” facts of the case, which involved a BVI company – Process and Industrial Developments Ltd (P&ID) – obtaining a 20-year gas processing contract by corrupting Nigerian public officials. The corruption included P&ID bribing the key Nigerian government lawyer involved in the approval of the contract. Nigeria did not perform, and in the arbitration that followed P&ID proceeded illegally to obtain internal privileged documents from the Nigerian lawyers representing the government and to use them for its benefit, with an insight into Nigeria’s thinking during the arbitration.
P&ID also lied to the tribunal about how it had obtained the contract, concealing the original bribes as well as the fact that it continued throughout the arbitration to bribe Nigerian officials and others who knew of the fraud. Those involved in the corruption on behalf of P&ID stood individually to make hundreds of millions and even billions of dollars had Nigeria’s challenge failed.
In allowing Nigeria’s challenge, Mr Justice Knowles said: “I reach these views of the matter without reluctance. P&ID has the Awards only after and by practising the most severe abuses of the arbitral process.” He went on to praise the “expertise and tenacity” of counsel and the solicitors for Nigeria.
Mr Justice Knowles noted that P&ID only revealed that it had obtained Nigeria’s internal legal documents long after the hearing before Sir Ross Cranston in July 2020 on Nigeria’s application for an extension of time to challenge the Award – where Philip also appeared for Nigeria. Mr Justice Knowles praised Sir Ross Cranston “for the acuity, independence, and courage involved” in his decision to grant that permission. “Without that decision and judgment an injustice would have remained, the population of an entire federation of states would have suffered from the economic consequences, and fundamental damage would have been left to the integrity of arbitration as a process.”
Following his findings that P&ID’s lawyers in the arbitration, including an English solicitor and King’s counsel, had reviewed Nigeria’s internal legal documents obtained by P&ID and not returned them, Mr Justice Knowles noted how the case provided “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. 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.” The Judge has referred a copy of his judgment to the SRA and BSB.
The Judge noted, too, that the case provides “an opportunity to consider whether the arbitration process, which is of outstanding importance and value in the world, needs further attention where the value involved is so large and where a state is involved”.
