US$9.6bn U.K. judgement: CBN hasn’t record of gas project – Emefiele




Emefiele

The federal government Tuesday said the judgement by a United Kingdom’s court authorising Process and Industrial Developments Limited (P&ID) to seize US$9.6billion in Nigerian assets over 20-year Gas Supply Processing Agreement (GSPA) was exorbitant, unjustifiable and overcompensation.

It also said the petroleum resources ministry lacked the mandate to enter into such contracts, even as the Central Bank of Nigeria (CBN) stated that it had no records of such transactions.

The government’s position was made known at a world press conference jointly addressed by Minister of Information Lai Mohammmed, Attorney General and Minister for Justice(AGF) Abubakar Malami SAN, Minister of Finance, Budget and National Planning Zainab Ahmed, as well as the CBN Governor Godwin Emefiele in Abuja.

Addressing journalists on the judgement delivered Friday 16th of August, the information minister said “in the 20-year Gas Supply Processing Agreement (GSPA) purportedly entered into with the P&ID in 2010, the company never

performed as agreed.”

Background

Giving some background to the litigation, Mohammed said; “With the contract having suffered a setback, the case went to arbitration. P&ID’s claim in the arbitration proceedings was mainly for the loss of profit for the 20-year term of the GSPA. In an interim award, the Arbitration Tribunal ruled that Nigeria has breached the contract. Though Nigeria successfully applied to have that award set aside by the Federal High Court in Lagos, the tribunal ignored this decision.

“Consequently, on 31 January 2017, the tribunal rendered its final award against the Ministry of Petroleum Resources in the sum of 6.597 billion U.S. Dollars, together with pre-award interest at the rate of 7% per annum, effective from 20 March 2013 and post-award

interest a the same rate from the date of the award. This interest increased the size of the award to US$9.6 billion.”

On steps taken after the arbitration award in 2017, the minister said  “Nigeria made several

attempts to negotiate the award and resolve the whole issue amicably with P&ID but to no avail, which eventually led to the enforcement proceedings instituted, simultaneously, by the company in the UK and the US.

“The federal government then engaged the services of the US law firm of Curtis, Mallet-Prevost, Colt & Mosle LLP, which took steps to defend the proceedings in the US District Court of Columbia to dismiss P&ID’s application for the enforcement of the award on the grounds that Nigeria, as a sovereign state, has an absolute right to obtain an authoritative determination of its sovereign immunity.

“While Nigeria has recorded some successes in that case in the US, the proceedings

are currently on-going in the US and the federal government will ensure that its interest and that of the people of Nigeria are vigorously defended.”

“It is worth mentioning that in challenging the award, the federal government relied upon an expert report analyzing the damages given to the P&ID. The expert concluded that the damages: –  were clearly unreasonable and manifestly excessive and exorbitant;  went far beyond any legitimate protection of the commercial interest of the P&ID;  were completely wrong and obviously unjustifiable; and that the damages overcompensated P&ID on a frankly gargantuan scale and imposed a punitive award on Nigeria.”

“It was on this ground and others that the federal government took all available steps to resist enforcement before the courts of the United Kingdom (UK). Unfortunately, the UK Court has recognized the award and given the company the authorization to seize Nigeria’s assets,” the minister said.

Foul deals?

Alleging some sharp practices under the immediate past administration of Goodluck Jonathan, he said; “We want to place on record that the federal government views with serious concerns the underhanded manner in which the contract was negotiated and signed. Indications are that the whole process was carried out by some vested interests in the past administration, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people.

“In view of the above, and in an attempt to unravel the circumstances surrounding the entire transaction, the Honourable Attorney General of the Federation, with the approval of Mr President, has requested the Economic and Financial Crimes Commission (EFCC), the National Intelligence Agency (NIA) and the Inspector General of Police (IGP) to conduct a thorough investigation into the company, the circumstances surrounding the agreement and the subsequent event, which includes commencing a full-scale criminal investigation.”

Assuring that the situation was under control, the minister said “despite the recent recognition of the award by a UK court, and contrary to some reports, Nigeria IS NOT about to lose any of its assets to P&ID. There is no imminent threat to Nigeria’s assets!

“In the first instance, the enforcement of the award cannot even commence now because the Judge in the UK court ordered that the P&ID cannot enforce the judgment against Nigeria until after the court resumes from its current vacation.

“What this means is that enforcement action cannot begin until further hearing on the matter, which will take place on a date to be determined by the court upon its resumption.

“The federal government therefore wishes to use this opportunity to assure Nigerians that there is no immediate threat to Nigeria’s assets as has been wrongly interpreted by a section of the media.

“Nigerians should be assured that the federal government is taking all necessary steps to appeal the decision of the UK Court, to seek for a stay of execution of the decision, to defend its rights and to protect the assets of the people of the Federal Republic of Nigeria.

“Nigerians should please be assured that the federal government will strongly avail itself of all defences customarily afforded to sovereign states under the United Kingdom Sovereign Immunity Act to stave off any enforcement of the award.

“Finally, we want to use this opportunity to appeal to the sense of patriotism of our media in the reportage of this very sensitive matter, which is capable of threatening the very existence

of the country, especially as some media outfits have clearly thrown overboard objectivity and patriotism in their very biased reporting of this matter.”

Malami

Also speaking, AGF Malami said the project was designed to be sabotaged right from conception, saying the federal ministry of petroleum lacked the  mandate to sign the contract.

He said: “I want to draw attention first to the composition of parties in the agreements which are the Federal Ministry of Petroleum Resources (FMPR) and the company, Process and Industrial Developments Ltd. (P&ID). As you rightly know, the federal ministry of petroleum resources is not a producer of gas.

“Gas products are produced by International Oil Companies (IOC) and NNPC. When you conceive, sign and execute a contract for the supply of gas products without involving the IOC and NNPC as parties to the agreement, you know very well that there are lot of questions to answer rising from the conception of the contract.

“This, among others, gave rise to the insinuation of fraudulent conspiracies right from the conception of the agreement. The fact remains that you cannot sign an agreement to provide a product that you do not have. The ministry does not have oil field and gas products but it went ahead to sign the agreement without involving those that are producers of gas products.”

 The AGF further said the country, through the contract, was subjected to unnecessary economic sabotage and investigation would unravel those involved in the deal.

Ahmed

Similarly, finance minister, Hajia Ahmed, said  “N3.5trillion(naira equivalent of the cost) covers overhead in a national budget. It’s an assault on every Nigerian. We are with the AGF  to ensure judgement is set aside.” 

Emefiele

Making similar submissions, CBN Governor Emefiele  said  as a foreign company, there were procedures to be followed. We don’t have information in the bank’s record the company fulfilled all processes.

The CBN governor  faulted the claim by P&ID that it spent 40 million dollars on the purported contract.

Emefiele said: “We have heard that the contractors in this case claimed that they spent 40 million dollars in the project. On our part in CBN, we know that as a foreign company, if you are investing in a contract or project in Nigeria, there are various options that you adopt. If you are bringing in machines into the country to execute a contract, you must fill certain forms and pay some money through the CBN.

“We have gone through our records but we do not have any information to show that the company brought in one cent into the country for the purported project. We have accordingly written to the EFCC and other agencies investigating the case. Time has come that Nigerians should rise against those who claim to do business in Nigeria without investing a penny in the country but all with an intention to defraud the country. The money they are plotting to take belongs to all of us.”




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