Nigeria May Forfiets $9 bln To A UK Firm Over Failed Gas Supply Deal

Nigeria may forfeit assets worth $9 billion to a foreign gas company over the West African country's breach of contract, according to a court filing by the British Virgin Island firm.
The company is asking a British Court for the right to seize the amount worth of the Nigerian assets over a 2010 deal in with government to supply gas to a processing plant in Calabar.
The deal in which the Nigerian government agreed to supply gas to a processing plant in Calabar that Process and Industrial Developments Ltd (P&ID) – a little-known firm founded by two Irish businessmen specifically for the project - would build and run.

However, when the deal broke down, P&ID won a $6.6 billion award at arbitration, based on what it could have earned during the 20-year agreement. It now says the total owed has ballooned to $9 billion because of interest accrued since 2013 .
Nigeria has tried to nullify the award, saying it was not subject to international arbitration but British courts rejected the argument.
P&ID is now asking the Commercial Court in London to convert the arbitration into a judgment, which would allow them to try to seize international assets.
A source close to President Muhammadu Buhari said they were fully aware of the matter and the government “is not sleeping”, adding they were optimistic the matter could be resolved in the courts. There are also proceedings pending at a U.S. District Court in Washington, D.C.
“This is a problem that the Nigerians are not facing up to in any serious way,” said Andrew Stafford, Q.C. of Kobre & Kim LLP, which is representing P&ID.
Experts said it would be difficult for Nigeria to fully extricate itself.
“Under UK legislation, state immunity does not operate to protect a sovereign state where it has entered into an arbitration agreement,” said Simon Sloane, a partner with UK law firm Fieldfisher.
He added that going after state assets following arbitration had become a well-trodden path over the past 15 years and it would be difficult for Nigeria to avoid paying compensation.
While assets that are used for diplomatic purposes – such as the Nigerian High Commission building in central London – were off the table, commercial assets were up for grabs.
In 2008, a UK court ruled that proceeds of oil sales from Chad held in an international account intended to repay World Bank loans were fair game for seizure.
Experts also said that the involvement of hedge fund VR Group, which has a stake in P&ID, signaled that it is unlikely to let the issue drop.
“They could still come to a settlement,” Sloane said. “As it’s a consensual process the parties can agree to settle, and settle for significantly below the $9 billion figure.”