Despite entering into a binding contract with P&ID, ultimately the Nigerian government reneged on the deal — failing to build a pipeline and deliver the gas for the refining process. In 2012, after several years and attempts to find a solution, P&ID took the Nigerian Government to arbitration to resolve their dispute. A London tribunal (consisting of arbitrators from England and Nigeria) concluded that the Nigerian government’s conduct amounted to a repudiation of the Agreement, and that Nigeria was therefore liable to P&ID for the lost earnings that P&ID would have gained. The tribunal concluded the award would reflect the profit the company would have earned under the Agreement if the Nigerian government had upheld its side of the agreement by building the pipeline and delivering the wet gas over the 20-year supply agreement. The tribunal was led by Lord Hoffmann, one of the world’s foremost experts on international arbitration, and ultimately found the Nigerian government was liable for $6.6 billion in damages, which by now has already accrued $2.8 billion in uncollected interest. The award was issued in January 2017 and, because the Buhari administration refuses to pay, interest continued to accrue at more than $1.2 million a day.
P&ID Facts > FAQs > Why does the Nigerian government owe P&ID over $9 billion?