The Federal Republic of Nigeria v Process & Industrial Development Ltd
[2023] EWHC 3320 (Comm)
The Federal Republic Of Nigeria v Process & Industrial Developments Limited
23 October 2023
[2023] EWHC 2638 (Comm)
High Court
Nigeria lost a huge lawsuit to a company called P&ID. A judge found that P&ID cheated by bribing people, lying, and using secret documents. Because of this cheating, the judge threw out the case, even though Nigeria was slow to respond to the lawsuit itself.
Key Facts
- •A 2010 Gas Supply and Processing Agreement (GSPA) between the Federal Republic of Nigeria and Process & Industrial Developments Limited (P&ID) resulted in a US$6.6 billion (now exceeding US$11 billion with interest) arbitration award against Nigeria.
- •Nigeria alleged bribery, corruption, and perjury by P&ID in securing the GSPA and throughout the arbitration process.
- •The arbitration tribunal found Nigeria in repudiatory breach of the GSPA, leading to the award.
- •Nigeria challenged the award before the English Commercial Court, alleging fraud and conduct contrary to public policy.
- •The court found that P&ID engaged in bribery, submitted false evidence, and improperly retained Nigeria's privileged legal documents during the arbitration.
Legal Principles
Dishonesty is determined by first ascertaining the individual's actual state of knowledge or belief (subjectively) and then applying the objective standards of ordinary decent people.
Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67
In civil litigation, the standard of proof is the balance of probabilities. Dishonesty requires convincing evidence.
None explicitly stated, but implied throughout the judgment.
The doctrine of separability treats the arbitration agreement as separate from the main contract. Bribery relating to the arbitration agreement can be challenged before the court.
None explicitly stated, but explained in the judgment.
In bribery cases, the extent to which the bribe influenced the recipient is immaterial. The act of bribery itself is sufficient.
Shipway v Broadwood [1899] 1 QB 369
Under section 68(2)(g) of the Arbitration Act 1996, an award can be set aside if obtained by fraud or contrary to public policy, causing substantial injustice.
Arbitration Act 1996, section 68(2)(g)
Section 73 of the Arbitration Act 1996 bars objections not raised promptly unless the party lacked knowledge and could not have discovered the grounds with reasonable diligence.
Arbitration Act 1996, section 73
Outcomes
The court set aside the arbitration award.
The award was obtained by fraud due to P&ID's bribery of a Nigerian official, submission of false evidence, and improper retention of privileged documents. This conduct was contrary to public policy and caused substantial injustice to Nigeria.
Nigeria did not lose its right to object under section 73.
Nigeria could not have discovered the grounds for its objection (bribery, false evidence, and improper document retention) with reasonable diligence before the arbitration concluded.
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