Since the English Commercial Court decision, a flood of misinformation has poured out of Abuja. This blog serves as a reminder of the facts in the P&ID case and a fact check to the latest absurd and untrue allegations made by the Nigerian Government and its spin masters.
Myth 1: The English Commercial Court Heard Evidence that P&ID is a Fraud.
- Fact Check: Quite the opposite, in fact. The Nigerian Government never presented any fraud allegations to the English Commercial Court. The Nigerian Government had ample opportunity: but none of the “evidence” it coerced and illegally obtained as a result of its sham investigation and show trial was presented to the Court. In fact, the Nigerian Government’s legal team even stated that, “The court is not asked to act on these investigations or convictions”. Moreover, Justice Butcher stated explicitly in his judgment, “Those allegations have played no part in my decision in relation to permission to appeal”.
Since mid-August, the Buhari Administration, chiefly Attorney General Malami, has been spinning a fairy tale to the world – even to the distinguished members of the United Nations – that P&ID was ‘fraudulent.’ However, in Court they were silent: there was no mention of ‘fraud.’ Why? Because these statements are all media bravado and political theatre for local politics; there is no substance or evidence to their claims. The claims would never stand up in an independent Court. Attorney General Malami’s ‘evidence’ is nothing more than the fruit of a widespread crackdown including illegal detentions, physical mistreatment, denial of medical care, sham trials and forced confessions of those connected to P&ID.
With no claims of fraud entered by the Nigerian Government, a ruling by the English Commercial Court allowed the Nigerians to stay enforcement while an appeal is heard, but this may come at a steep cost for Nigeria, which has been ordered to pay $200 million USD in security.
Myth 2: According to Minister Lai Mohammed, the P&ID contract “cannot be valid until it has been vetted by the Office of the Honourable Attorney-General of the Federation and taken to the Federal Executive Council for approval”.
- Fact Check: This old, tired allegation is part of the Nigerian Government’s deliberate campaign to frame the contract as a forgery. It also underpins their desperate efforts to coerce a forced confession from Grace Taiga, Jim Nolan and others. The authority of the Minister of Petroleum Resources to sign the GSPA was specifically challenged by Nigeria in the liability phase of the arbitration proceedings, and the Tribunal found in favour of P&ID (Paragraphs 41 – 54 of the Liability Award). Interestingly, for those closely following this case, at the time of the arbitration proceedings, the Nigerian Government argued that it was only NNPC – not the Attorney General – that had the authority to sign contracts relating to Nigeria’s petroleum industry: the position seems to be ever-changing. Nigeria’s claims on this issue have been rejected throughout the legal process.
Myth 3: According to Minister Lai Mohammed, the agreement had a “’trick’ clause dubiously inserted in the MOU” which “was curiously activated that allowed British Virgin Island (BVI)-registered P&ID to replace the original contractual party, P&ID Nigeria Limited, to sign the contract on Jan. 11 2010. P&ID, incorporated in BVI, is a shell company that has no history of any business except the phantom GSPA in Nigeria. Please note that there is no Board resolution approving the assignment of the contractual interest to P&ID BVI”.
- Fact Check: Minister Mohammed’s reference to a ‘trick clause’ is ridiculous. P&ID BVI was the original and only signatory to the GSPA contract: there was never any other entity as a signatory to the GSPA.
The MOU of 22 July 2009 had been signed by P&ID Nigeria, but the MOU was superceded by the GSPA contract of 11 January 2010. In any event the express terms of the MOU made clear that either P&ID Nigeria or P&ID BVI had the right to assign their rights under the MOU. The relevant section of the MOU, signed by the Government of Nigeria, stated:
Clause 15: ASSIGNMENT: Any Party may assign its right and obligations under this MOU to an Affiliate. No assignment to a non-Affiliate shall be permitted. Any permitted assignee shall, following such assignment, be treated as a Party for the purposes of this MOU. In the event of such assignment, the assignor shall not be relieved of its liabilities and responsibilities under this MOU.
Myth 4: According to Minister Lai Mohammed, “P&ID never kick-started the construction of the project facility, despite its claim to have invested $40 million in Nigeria”.
- Fact Check: The $40 million paid for preparatory work in the early days of the project. The $40 million came from General Danjuma and was structured as a contract for services. P&ID was reimbursed for this expenditure. P&ID did not claim the $40 million in the Arbitration. The Tribunal Award was for loss of profits, not the $40 million expenditure. The allegation by the Nigerian Government in relation to the $40 million is a red herring.
Myth 5: According to Minister Lai Mohammed, P&ID “never acquired any land to build the gas processing plant”.
- Fact Check: The assertion that P&ID never “kick-started the construction” is nonsensical. As the Arbitral Tribunal concluded in 2016, (Pg 15, Paragraph 63-66) (below) of the Tribunal award, “It would have been commercially absurd for P&ID to go to the expense of building GPFs when the Government had done nothing to make arrangements for the supply of the Wet Gas”.
(d) Did the Government not have to do anything till the GPFs had been built?
- Mr Shashore submits that the Government had no obligation to deliver gas until there was a plant to receive it. That, no doubt is true, but the Government’s obligations were not confined to the delivery of gas. By Article 6 b) it was also obliged to –
“ensure that all necessary pipelines and associated infrastructures are installed and all requisite arrangements with agencies and/or third party are in place to ensure the supply and delivery of Wet Gas in accordance with Article 3 so as to facilitate the timely implementation of gas processing by the GPFs as provided for in this Agreement”.
- There is nothing in the GSPA to suggest that these obligations were conditional upon the completion by P&ID of the construction of the GPFs. It would have been commercially absurd for P&ID to go to the expense of building GPFs when the Government had done nothing to make arrangements of the supply of the Wet Gas.
- In his oral argument and written Final Submission, Mr Shashore put forward a modified version of this argument. Article 3 (c) said that the Government was to deliver the gas at “the Site Boundary”. The “Site” was defined as “the land at Calabar on which GPFs are located”. Mr Shashore says that the Government could not have complied with this obligation until P&ID had a site. It had, it is true, been allocated and offered a site but had not yet bought it. So there was no possibility of compliance with an obligation to deliver to the Site boundary until P&ID has a Site.
- We think this argument takes the matter no further than the first version. Of course the Government could not actually deliver gas until there was a Site and, as we have said, until there was a plant to receive it. But that does not excuse the Government’s failure to comply with 6 b). There is no suggestion that its failure to comply with those obligations was caused by uncertainty as to where the Site was going to be. It was assumed by everyone that it would be on the land allocated in Calabar.
- The assertion by the Nigerian Government that the land was fraudulently obtained from Cross River State Government is false.
Myth 6: According to Minister Lai Mohammed, “Two Directors of P&ID Nigeria have been convicted of charges of money laundering and economic sabotage. They are Mohammed Kuchazi, a Director of P&ID BVI, and Adamu Usman, a Director of P&ID Nigeria”.
- Fact Check: The purported guilty pleas are part of a government sham investigation and Show Trial that resulted in coerced confessions from individuals detained under duress. Mohammed Kuchazi nor Adamu Usman – who were not charged personally – purported to plead guilty to fraud and tax evasion charges on behalf of the company. Neither individual had any authority to do so. For the record, neither Mohammed Kuchazi nor Adamu Usman are current employees or representatives of P&ID. P&ID received no communication from the Nigerian Government either before, during or after the ‘trial’ held in Nigeria. It is presumably for this reason – among many – that the Nigerian Government did not submit these “confessions” to the English Commercial Court, as it would be well aware the conclusions are neither legitimate nor legal.
Myth 7: According to Minister Lai Mohammed, “Suspicious payments were made to Mrs. Grace Taiga, the Legal Director in the Ministry of Petroleum Resources. Mrs Taiga was supposed to ensure that the interest of the country was adequately protected. Of course, the payment, transferred in three tranches, could only have been made in appreciation of the ‘good deed’ done to P&ID by Mrs Taiga”.
- Fact Check: The accusations are way off base. The donations sent by Mr. Cahill to Grace occurred years after she retired from government service. They were provided to secure urgent medical treatment as her health precipitously declined and were a laudable humanitarian gesture by Mr. Cahill. Grace, who lived on a state pension, reached out to Mr. Cahill in 2017-2018, long after the GSPA, and long after the arbitration case, because she had suffered a bad fall. It is patently obvious that this had no connection with P&ID’s GSPA, and the Nigerian Government’s characterization of it as a bribe from P&ID is absurd and offensive. Moreover, the lead interrogator for the EFCC, Bala Sanga, admitted to Nigeria’s man at Bloomberg these payments were for “medical costs”. Grace Taiga’s sham trial is scheduled to get underway this week Abuja. Is the Buhari Administration so ruthless that it will inflict further suffering on an innocent retired civil servant who is elderly and infirm?
Myth 8: According to Minister Lai Mohammed, “the gas for the project was expected to come from… OML 123 operated by Addax…” but Addax was not “even aware of the agreement”.
- Fact Check: Minutes from a Ministerial Stakeholders meeting on the P&ID project from 10 August 2010 illustrate that Addax was very much part of the discussions – and the relationship was an accepted responsibility of the Nigerian Government. The Minutes confirm the Ministry’s Permanent Secretary directed the National Petroleum Investment Management Services (NAPIMS) to“obtain a Letter of Undertaking from Addax Petroleum confirming that 150MMSCuFD of associated Wet Gas from OML123 will be made available to P&ID in conformity with the Government’s obligations under the terms of the Definitive Agreement dated 11th January, 2010 with P&ID”.
Myth 9: According to Minister Lai Mohammed, “there was no proof of any financial commitment by P&ID towards the execution and implementation of its own obligation as stipulated in the 2010 agreement, adding that the Central Bank of Nigeria also confirmed that there was no trace of any funds brought into Nigeria by P&ID”.
- Fact Check: This is yet another false and outlandish claim that’s part of a deliberate effort to distract the attention of the Nigerian people away from the Buhari Administration’s losses in the courtroom, and their failure to attract international investors. P&ID had lined up the financial backing needed to build the processing plant as outlined in the contract with the Nigerian Government. P&ID’s founders had a proven track record of delivering similar projects in Nigeria. The project fell apart due to the Nigerian Government’s repudiation of the contract by failing to complete the necessary pipeline infrastructure and secure the gas needed.
Myth 10: According to Minister Lai Mohammed, “billions of naira in suspicious cash transfers were made by P&ID and that your firm never filed tax returns or pay VAT to the Federal Inland Revenue Service as required by law”.
- Fact Check: P&ID operated within the proper confines of both Nigerian and International laws. The Nigerian Government’s fabricated sham investigation, led by the EFCC, is a desperate attempt to shift responsibility away from their own failures and to evade their international legal responsibilities.
Myth 11: EFCC Chairman Ibrahim Magu stated in London at the time of the Hearing that Nigeria “do not have confidence in the Commercial Court because they seem to have interest in making sure they enforce it” and claimed “You can see the conspiracy. There is a great conspiracy”. See for yourself starting at 5:46 and ending at 6:06.
- Fact Check: Magu’s inflammatory remarks attempting to discredit and smear the English Commercial Court as dishonest and part of a “conspiracy” are shocking but perhaps unsurprising. Magu further states that the Nigerian Government intends to pressure the UK “at government or diplomatic level” – suggesting that the independent Court would be swayed by political pressure. Following these remarks, the Nigerian Government have threatened to ask the Irish and UK authorities to arrest and extradite Mssrs. Brendan Cahill and Adam Quinn, the son of Mick Quinn. The language and wild accusations highlight the desperation – and the no-holds barred attitude – in Abuja.
Finally, just to restate the facts: P&ID was established in 2006 for the sole purpose of pursuing the project that gave rise to the Gas Supply & Processing Agreement (GSPA). The project’s origins stemmed from the Nigerian government’s request to support the Master Gas Plan outlined by Minister of Petroleum Rilwanu Lukman – one of the most senior and respected Nigerian Government officials of recent decades – who proposed a solution to the country’s dearth of electrical generation that continues to this day. P&ID was one of thirteen projects to be supported by the government under the Master Gas Plan. The P&ID project was a key part of this major initiative. The technology for the P&ID project was well established and the wet gas was clearly available – it was (and still is) being flared and wasted, causing massive environmental damage. The Tribunal found the project would have succeeded, having heard expert evidence submitted by both P&ID and the Buhari Administration. Perhaps the ultimate proof that the concept of the project is sound (and not “doomed”) is the fact that the current Buhari Administration is seeking investors with a view to processing flared gas, using similar technology to the P&ID project proposal. The Buhari Administration’s own actions to find a way to make use of flared gas is clear evidence that such an approach is both desirable and achievable. Just as important, the Nigerian Government’s actions raises serious concerns for foreign investors in Nigeria, whether you are investing in a commercial enterprise or considering buying the next tranche of Eurobonds. Not only will Nigeria deliberately refuse to pay an international arbitration award backed by an English Court, but they are prepared to launch sham investigations and character assassinations in an attempt to bully investors into giving up their legal rights.