Cash-strapped Nigeria has had its foreign reserves boosted following a London Commercial Court’s $200million security guarantee release for the stay of execution of Process and Industrial Development Limited’s (P&ID’s) claims against the country.
The Central Bank of Nigeria (CBN) said in a tweet at its verified handle @cenbank on Tuesday that the release of the security deposit has swollen the nation’s foreign reserves.
“Nigeria’s foreign exchange reserves was this morning boosted by over $200 million when the London Commercial Court ordered the release of the $200 million guarantee put in place as security in respect of the execution of the much discredited P&ID $10 billion arbitral claim.
“The court also awarded a £70,000 cost in favour of Nigeria in addition to an earlier award of £1.5m,” CBN tweeted.
Oil-dependent Nigeria has seen its foreign exchange inflows dwindle substantially following the global impact of COVID-19 that led to a drop in the price of crude oil.
Nigeria filed an appeal “against the judgment of Justice Butcher for the execution of the Arbitral award of $10billion in favour of Messrs. Process and Industrial Development Limited (P&ID),” the central bank noted.
But the court presided over by Sir Ross Cranston rejected the request of P&ID to increase the security to $400 million. Instead, it ordered cost of £70,000 against P&ID, the CBN explained.
Earlier in September, the court had also granted another cost of £1.5million against P&ID.
CBN Governor, Godwin Emefiele expressed pleasure that the court rejected the P&ID’s application to increase the guarantee, which he noted, was intended to diversionary and entirely misconceived.
“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,” Emefiele added.
The CBN governor added that the order “is seen as a further and significant victory for Nigeria in its determination to overturn the $10 billion award procured through fraud and corruption by P&ID and former government officials
