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TUESDAY JANUARY 29, 2019 ˾ T H I S D AY
NEWSEXTRA
Nigeria Risks Loss of $9bn Assets to UK Firm Ugo Aliogo Except further indulged by a British Commercial Court sitting in London, Nigeria risks losing a whopping $9 billion worth of assets in the UK to a British firm, Process and Industrial Developments Limited (P&ID), which two years ago got an arbitration award of $6.6billion against the country for breach of agreement. The balance of $2.6 billion is interest at seven per cent on the principal award effective from March 20, 2013, the date of declaration of dispute. This could be more, as interest continues to mount, growing at a staggering rate of $1.3 million per day. Nigeria’s crippling liability, a substantial 11 per cent of its entire external reserves put at $43.2 billion, arose from a dispute between it and the British Virgin Islands’ company over a Gas Supply and Processing Agreement (GSPA) signed in January 2010. After a couple of legal challenges to the award failed, in part due to carelessness of its officials in the foreign and justice ministries, two enforcement proceedings are now pending in the UK and the US. While the proceedings in a US Federal District Court in Washington has entered appeal stage at the instance of Nigeria, the one in the UK is due for enforcement hearing on February 15, a day before the presidential election that President Muhammadu Buhari is strenuously pursuing. Last month, the English court gave Nigeria one last chance to present its defence to enforcement of the Award. On February 15 the question of whether P&ID may seize Nigeria’s commercial assets in England will be “finally determined once and for all”. As it is usual in the entire arbitration and enforcement proceedings, Nigeria had been negligent in diligent prosecution of its challenges to the company’s claims, failing to comply with basic rules of arbitration and court that require it to file its defence. The English court has labelled these defaults “both serious and significant” P&ID had declared a dispute, submitting to arbitration, which proceedings commenced on January 29, 2013 before the London Arbitration Tribunal composed of Leonard Lord Hoffmann (presiding); Sir Anthony Evans
QC, nominated by P&ID; and Chief Bayo Ojo (SAN), nominated by Nigeria, and eventually entered overall award of $6.597 billion (now with interest $9 billion) against Nigeria on February 10, 2017. Under the English Arbitration Act 1996, Nigeria had within 28 days of award to apply to set it aside but failed to do so as at March 10, 2017 when the time lapsed, exposing it to the danger of coughing out the huge sums should its legal challenge to the confirmation application of P&ID fail on February 15. Should the English court allow P&ID to enforce the award in the country, Nigeria risks seizure of its assets in England and any other of the over 100 countries that are signatories to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), including all of the major trading partners of Nigeria. In practical terms, the risk amounts to about 11 per cent of the current entire foreign reserves of Nigeria put at $43.2 billion and could deal a devastating blow to the credit rating of the country, which has in the last three years plus, relied heavily on borrowing to sustain its annual budgets. Nigeria, which emerged from recession in 2017 and has had a sluggish growth rate of below two per cent, approved a three-year borrowing plan in 2016, estimating that 40 per cent of this would come from offshore to lower costs of lending. This borrowing plan would appear to now be at risk as Nigeria, rather than settle its arbitral award obligation continues to pursue a legal challenge, which some arbitration lawyers, including some of its advisory counsel have said is basically weak. “Nigeria’s chances, are very weak,” an experienced lawyer close to the proceedings told THISDAY at the weekend, saying the country’s application is way out of time and had expired. He pointed out that in addition to the fact that Nigeria’s application was statute-barred, the composition of the tribunal that issued the award was too solid for their findings to be reviewed. The presiding arbitrator, Lord Hoffmann, was former Lord of Appeal in Ordinary, during whose tenure, it was the highest judicial position in the UK, and the equivalent of today’s UK and Nigerian Supreme Court.
The other arbitrators, Evans and Ojo were former chief justice of Dubai International Financial Centre Courts (and the English Court of Appeal) and former attorney-general of Nigeria respectively. P&ID, an engineering and project management company with about 30 years’ experience in Nigeria, founded by two Irish, Michael Quinn and Brendan Cahill, had entered into the GSPA with Nigeria in 2010, stating that the company would build a state-of-the-art gas processing facility along the country’s coast. The project was to refine associated natural gas (also known as wet gas) into non-associated natural gas (lean gas) to be used by Nigeria in powering its national electric grid. Nigeria was to supply P&ID with agreed-upon quantities
of wet gas, at first 150 million, and eventually, 400 million standard cubic feet (SCF) per day for a 20-year period at no cost. This, however, required Nigeria to construct a pipeline to carry the gas to P&ID facility. The company was in turn to strip away the heavy hydrocarbons known as Natural Gas Liquids (NGLs) that make the wet gas unsuitable for electricity generation, then return to Nigeria the lean gas created at no cost, while P&ID would have the right to the by-products received from processing the gas. The project, however, collapsed two years later because of the failure of the federal government to secure a supply of wet gas or to build the pipeline to bring gas to the processing plant, forcing the company to declare a dispute. In January 2013 P&ID gave the
government one more chance to secure a supply of wet gas, but to no avail, leaving P&ID with no choice but to bring the contract to an end and pursue damages. “It is unfortunate for the Nigerian people that the government caused such a promising project to fail and result in an arbitration award against it of billions of dollars that it now shows no interest in satisfying or even trying to resolve amicably on a reasonable basis” said Brendan Cahill, a cofounder of P&ID, when contacted by THIS DAY. “This is a sad ending to a project that would have delivered electricity to millions of families across Nigeria, and brought significant income to the Nigerian treasury,” he said.
SECURITY ON THEIR MINDS...
L-R: Commander, Nigeria 561 Base Service Group, Ikeja, Air Commodore Sunday Makinde; Lagos State Commissioner of Police, Mr. Imohimi Edgal; Governor Akinwunmi Ambode; Commanding Officer, NNS Beecroft, Rear Admiral Okon Eyo; and Commander, 9 Brigade, Nigerian Army, Ikeja Cantonment, Brigadier General Taoreed Lagbaja, addressing the Government House Correspondents shortly after State Security Council meeting at the Lagos House, Alausa, Ikeja...yesterday
ISWAP, Nigerian Army Disagree over Killing of 30 Soldiers Defence minister seeks review of obsolete military laws Kingsley Nwezeh inAbujawith agencyreports The Nigerian Army and the Islamic State of West African Province (ISWAP) have disagreed over the claim by the insurgents that they killed 30 Nigerian soldiers in an attack on Saturday in Borno State. This is coming as the Minister of Defence, Brigadier-General Mansur Dan-Ali (rtd), yesterday called for a review of “obsolete” military laws, which he said had failed to meet the yearnings and aspirations of the military and society.
ANigerianArmy spokesman said an attack on troops by insurgents in the Borno village of Logomani was repelled, adding that eight soldiers were hurt, but none with life-threatening injuries. “Only eight of our troops were wounded, out of which four have since been evacuated ... while the other four are receiving treatment,” said the army spokesman But in a statement issued through its news agency Amaq, Islamic State had on Sunday claimed responsibility for the attack on a village it referred to as Lomani.
Meanwhile, the minister of Defence, Brigadier-General Mansur Dan-Ali, yesterday called for a review of “obsolete” military laws, which he said had failed to meet the yearnings and aspirations of the military and society. The minister spoke in Abuja while receiving the report of the committee set up to review the Armed Forces Act CAP A20 Laws of the Federation of Nigeria 2004. He said the current Armed Forces Act Cap A20 LFN 2004 was an amalgamation of the hitherto individual laws operated by the
three services, adding that the Armed Forces Decree of 1993 harmonised the three laws into one for the purpose of command, maintenance and the effective administration of the armed forces of the federation. “It is therefore pertinent to point out that while the laws from where the Nigerian Armed Forces copied her own law had undergone several reviews reflective of the ever changing status of the world; ours has remained stagnated thus failing to meet the yearnings and aspirations of the serving officers and the society at large”, he said.
The gubernatorial candidate of the All Progressives Congress (APC) in Akwa Ibom State, Obong Nsima Ekere, has promised to do everything possible to make Ibaka Deep Seaport, in Mbo Local Government Area of the state, a reality if elected governor on March 2, 2019.
Speaking during the APC campaign rally in Mbo, the host community of the proposed seaport, Ekere lamented that the seaport has remained on newspapers and books for too long. “We will do everything possible, as long as God lives, to remove all the impediments to make that
project work. Ibaka Deep Seaport will no longer be on newspapers and books. It will become a reality,” he said. Ekere hinted that he planned to turn Mbo into an industrial hub by building an industrial city around the seaport. He promised to liaise with the
federal government to fast track the resuscitation of the Ebughu Fishing Terminal and the upgrade of the Forward Operations Base at Ibaka to a full-fledged naval base. The APC flagbearer also promised to provide Mbo, largely a fishing local government area, with a fishing processing industry.
Dead, Retired Judges Appointed to Serve in Election Tribunals Ekere Promises to Build Ibaka Seaport Alex Enumah in Abuja
There indications that some of the 250 judges sworn-in by the Acting Chief Justice of Nigeria, Justice Ibrahim Tanko Muhammed at the weekend to adjudicate in 2019 Election Petition Tribunals were either dead or retired. Already, some of these dead or retired judges have been identified. Former Chairman, National Human Rights Commission (NHRC), Prof. Chidi Odinkalu in his twitter handle identified the late Justice Steve Evo Chukwu who died in 2016 as one of the late judges that made the list. Odinkalu said: “Steve Evo Chukwu and I were school mates. In June 2016 while serving
as a judge of Nigeria’s Federal High Court, he died at 51. Over 30 months after Steve died, he was sworn-in yesterday, January 26,2019 to adjudicate on petitions 2019 elections.” Another late judge identified is JusticeEdemekongEdemekongwhose name appeared as number 58 on the list and declared that the late Justice died since 2013. Another Justice Chukwu from Ebonyi State and number 53 on the list, who was formerly of the Federal High Court is also said to have been long dead. Also, Justice Stephen Okon, a retired Chief Judge of Akwa IbomStateand JusticeOkoyoEssang(number56),aretired justiceoftheHighCourtinAkwaIbom State, both made the list.
If as, P&ID expected, the UK court grants enforcement on 15 February, the company will be entitled to seize Nigeria’s commercial assets in London, the world’s leading financial centre. In previous high-profile enforcement cases against sovereign states, wide-ranging disclosure orders have been made in respect of assets, and major assets such as ships have been seized. After Argentina defaulted on its sovereign debt, creditors detained the Argentine naval vessel ARA Libertad when it docked in the Ghanaian port of Tema in 2012. For many years Argentina found itself largely locked out of the global capital markets. Argentina’s foreign reserves, and other assets, were legitimately targeted. Nigeria can ill afford to find itself in a similar dilemma.
Ghana to Host 8th DStv Eutelsat Star Awards The 8th edition of the DStv Eutelsat Star Awards will hold in Accra, Ghana, on 13 February. According to a statement issued by MultiChoice, it is the second time Ghana will be hosting the award since the competition
began in 2011. Ghana was also the first country to produce an overall poster winner during the inaugural DStv Eutelsat Star Awards. To date, the country has produced three overall winners namely; Michael
Yeboah (2011), Lloyd Ossei Baffour (2013) and Ayawen Asuinura (2015). The awards will see recently announced in-country winners of the 2018 edition of the DStv Eutelsat Star Awards, Nigeria’s
Tirzah Ikiri of Zamani College, Kaduna, (Essay category) and Prosper Okarike of Graceland International College, PortHarcourt (Poster category) competing with other winners across the continent.