The House of Representatives has set up an interim panel to probe the Gas Supply and Processing Agreement (GSPA) Nigeria signed with a British Virgin Islands-registered company, Process and Industrial Developments (P&ID) Ltd, whose alleged breach triggered arbitration that resulted in the award of $6.6 billion, which with interest has now ballooned to $9.6 billion and still rising.
The decision to probe the matter was sequel to a motion on urgent need to investigate the negligence in the handling of the P&ID transaction by the Ministry of Justice and Ministry of Petroleum Resources respectively, moved by Hon. Julius Ihonvbere. After amendments to the initial motion, the House resolved to mandate a 17-man ad-hoc committee, to as a matter of urgency, invite the ministers of both ministries as well as other officials of the ministries saddled with the responsibility to negotiate the agreement with P&ID and the prosecution of the matter before the tribunal to give situational report with a view to finding lasting solutions to the avalanche of extant and future cases.
The lawmakers also agreed to recommend appropriate sanctions, where necessary, in line with Order 14 of the Standing Orders of the House and also to initiate a process of reviewing all agreements and treaties signed by Nigeria through the appropriate committees to create opportunities to discover anomalies and avoid a repeat in the future.
Ihonvbere had noted in his motion that the recent judgment debt of $9.6 billion “leaves a very sour taste in the mouth.” He said: “For a country with foreign reserves of only $45 billion and a sovereign debt profile of over $80 billion, this judgment debt is not only punitive but would devastatingly affect the Nigerian economy.”
He regretted that Nigeria has a penchant for disregarding the sanctity of contracts and terms of agreement, coupled with the failure of Nigeria’s representatives in many cases, to carefully or diligently scrutinize agreements they sign knowing, that the consequences will affect past and future generations.
In a related development, Justice Inyang Ekwo of the Federal High Court, Abuja on Thursday ordered the forfeiture of assets belonging to P&ID Ltd to the federal government after two representatives of the company pleaded guilty to the charges preferred against them by the federal government.
The order of forfeiture was made following the conviction of the firm on an 11-count charge bordering on economic sabotage, money laundering, tax evasion, amongst others. The charges were preferred against the company in respect of the failed contract that led to a recent controversial award of $9.6bn judgment against Nigeria by a British Commercial Court.
P&ID Ltd was represented at the court in Abuja by its Commercial Director, Mohammad Kuchazi, while P&ID Nigeria Limited was represented by Adamu Usman. The defendants pleaded guilty to all the charges read against them and the court consequently convicted them based on their plea of guilt.
After their conviction, counsel to the first defendant, Dandison Akurunwa, prayed the court to consider the cooperation showed by the first defendant in not wasting the time of the court and for pleading guilty to the charges. Similarly, the second defendant, whose representative stood for himself, aligned himself with the submission of counsel to the first defendant.
However, prosecution counsel, Bala Sanga, urged the court to deliver its sentencing in line with the provision of the Money Laundering Act which stipulates the winding up of the firm as well as forfeiture of all their assets to the federal government. Justice Ekwo accordingly made an order winding up the two firms as well as forfeiture of their assets to the federal government.
Recall that a British Commercial Court had on August 16 awarded judgment in the sum of $9.6bn against Nigeria over the failed contract between P &ID and the Ministry of Petroleum Resources in 2010. The British court had in the judgment gave the nod to P&ID to seize Nigeria’s foreign assets to the tune of $9.6billion as judgment debt in its favor. But the federal government on its part have maintained that the entire Gas Supply and Processing Agreement signed between Nigeria’s Ministry of Petroleum and P&ID in 2010 was deliberately skewered to fail so as to benefit a syndicate that was out to extort Nigeria of its resources.
P&ID had in 2012 instituted the legal battle against Nigeria in the Court of Arbitration in the UK in 2012, following Nigeria’s refusal to carry on with the GSPA agreement entered with the firm in 2010. By the terms of the agreement, P&ID was to build and operate an accelerated gas development project at Adiabo in Odukpani Local Government Area (LGA) of Cross River State. The agreement required the federal government to supply natural gas from Addax Petroleum-operated Oil Mining Leases (OMLs) 123 and 67 for P&ID to refine into fuel suitable for power generation in the country.
According to the terms, the initial volume of gas was about 150 million cubic feet of gas per day, which would be ramped up to about 400 million cubic feet per day during the 20-year period. P&ID alleged that after signing the agreement, the federal government reneged on its obligation after it had opened negotiations with the Cross River State Government for allocation of land for the project.
P&ID claimed that the failure of the federal government to construct the pipeline system to supply the gas frustrated the construction of the gas project and deprived it the potential benefits expected from 20 years’ worth of gas supplies
