The founder of Process and Industrial Development (P&ID), Brendan Cahill, has disclosed that the company is open to amicably settling its disagreement with the Federal Government despite a court verdict scheduled for next week.
Cahil said P&ID is prepared to settle with the Government on a reasonable basis if the government is willing. He, however, stated that the Government has been proving difficult, the same reason the company opted for a court ruling seven years ago.
“P&ID remains open to a settlement on a reasonable basis, but we need a willing partner in government to help resolve this matter. The onus is on the Nigerian government to act in good faith if they wish to find a solution.”
The Backstory: P&ID‘s contract with the Federal Government started in 2010 when the then-President Umaru Musa Yar’Adua authorised partnerships with private companies to develop the nation’s energy infrastructure in order to fix the power problem in Nigeria. P&ID signed an agreement with the Ministry of Petroleum Resources in January 2010.
Genesis of disagreement: P&ID had filed a lawsuit against Nigeria in 2012 after all attempts to negotiate a deal with the Government failed. A tribunal was organised in London under the rules of the Nigerian Arbitration and Conciliation Act as part of the original contractual agreement between the parties.
Initial court order: The the tribunal ruled that Nigeria was liable for $6.6 billion in damages, which by now has increased to over $9 billion with interest (more than $1 million in interest accruing daily). The amount is equivalent to almost 2.5 percent of Nigeria’s annual gross domestic product.
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May court sitting: P&ID filed for approval from courts in the United States and the United Kingdom to enforce the award after the Government failed to obey the order by the tribunal. The company might end up seizing Nigerian assets in US and UK. The court sitting is slated for May 21, 2019.
Why Nigeria should worry: A hedge fund managed by VR Capital Group took a large stake (25%) in P&ID. With the backing of the hedge fund and Lismore Capital Ltd, P&ID hired lobbyists, lawyers, and a public-relations firm late last year to fight the case.
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In a similar situation, creditors seized Argentina’s naval frigate while it was docked in Ghana.
Fraudulent agreement: Cahill denies that the agreement signed with the Federal Government in 2010 was fraudulent. He said the arbitrators in London spent five years carefully reviewing the written agreement and all the facts surrounding the deal, concluding unanimously that Nigeria was to blame for the deal’s collapse.
The deal was promising: The deal between the Nigerian government and P&ID was supposed to fix Nigeria’s electricity issue, powering millions of household, Cahill said in the interview. According to him, it would have helped Nigeria reach its full potential, but Nigeria didn’t uphold its side of the contract.
Breakdown of the deal: Nigeria planned to pipe natural gas from two offshore oil rigs to a refinery that would be built by P&ID. The company founded in 2006 by two Irishmen, Michael Quinn and Cahill, was to remove hydrocarbons from the gas and send the fuel to Nigerian power plants.
It was revealed that P&ID wouldn’t get paid for the endeavor, but it could keep and sell the hydrocarbon byproducts, which themselves had value, with the government getting a cut.