P&ID Ruling Boosts Nigeria’s FX Reserves By $200m
The Central Bank of Nigeria (CBN), on Tuesday, September 29, 2020, said the nation’s Foreign reserves received a boost following the order of a London Commercial court, directing the release of the $200m security for the stay of execution granted when the country appealed the judgment of Justice Butcher.
The country had appealed the execution of the Arbitral award of $10bn in favour of Messrs. Process and Industrial Development Limited (P&ID).
The $200m was the amount in bank guarantee deposited by Nigeria’s Federal Government with a high court in London to secure a stay on asset seizures of up to $9bn related to a failed gas project.
Sir Ross Cranston, who presided, rejected the request of P&ID to increase the security to $400 million and instead ordered cost of £70,000 against P&ID. It will be recalled that same court, earlier in September 2020, had also granted another cost of £1.5m against P&ID.
Commenting on the outcome, the CBN Governor, Godwin Emefiele expressed pleasure that the court rejected the P&ID’s application to increase the guarantee, which he noted was clearly intended to be a diversionary tactic and entirely misconceived.
According to him, “Due to the substantial evidence of prima facie fraud established before the Court, we are pleased that the Judge has agreed to release the guarantee.
“This release, which is an accretion into the reserves will further enhance the nation’s management of the exchange rate of its domestic currency, the Naira while ensuring monetary and price stability,” he added.
Tuesday’s order is seen as a further and significant victory for Nigeria in its determination to overturn the US$10bn award procured through fraud and corruption by P&ID and former government officials.
Analysts believe that P&ID and its backers, Lismore Capital and VR Advisory, are increasingly fighting a lost battle, as they continue to resort to employing delay tactics, disseminating misleading claims, and taking every step to obstruct investigations across multiple jurisdictions.
A government source said: “the Nigerian Government is determined to secure justice for the people of Nigeria – no matter how long it takes. Investigations are ongoing, and we are confident that more of the truth will be revealed over the coming months.”
P&ID, based in the British Virgin Islands, which was set up solely to build a gas processing plant in Nigeria, won a $6.6 billion arbitration award after the 2010 deal collapsed. The award has been accruing interest since 2013.
Pix caption: The Federal Government’s team, from left, the Attorney General, Abubakar Malami; Minister of Information and Culture, Lai Mohammed; Finance Minister, Mrs. Zainab Ahmed; and CBN Governor, Godwin Emefiele, addressing a press conference on the initial P&ID judgment in August 2019.