Award

Nigeria v P&ID (the US$11bn fraud case)

Courts of England and Wales (Commercial Court) · Other public awards · England and Wales · 23 October 2023

Why it matters

The most consequential arbitration judgment of the decade and a defining African case. A tiny company won an award that grew to roughly US$11bn, around a third of Nigeria's reserves, and the English court found the award itself was procured by fraud: bribery, perjury and improper use of Nigeria's own privileged documents. It triggered a global debate about how arbitration can be policed against abuse.

Summary

P&ID, a small company with no real assets, signed a 2010 deal to build a gas processing plant in Nigeria. Nothing was ever built. P&ID blamed Nigeria, arbitrated in London, and won an award of US$6.6bn in 2017, which with interest swelled to about US$11bn. Nigeria challenged the award in the English Commercial Court under section 68 of the Arbitration Act 1996, which allows a court to set aside an award for serious irregularity, including where it was obtained by fraud. After an eight-week trial, Knowles J found the award had indeed been obtained by fraud and in a way contrary to public policy: P&ID had bribed a Nigerian official, Grace Taiga, around the time of the contract and kept paying her to keep the corruption quiet; its main witness gave knowingly false evidence to the tribunal; and P&ID had improperly received and kept Nigeria's own privileged legal documents during the arbitration, letting it track the other side's hand. The judge described the case as a stark reminder of what can happen when arbitration carries on with little public scrutiny, and posed open questions about whether the arbitral process needs better tools against fraud on this scale. The award was set aside in full. For anyone studying enforcement, public policy or corruption, this is now the first modern citation.

The detail

Parties: Federal Republic of Nigeria v Process and Industrial Developments Ltd

Case number: [2023] EWHC 2638 (Comm)

Outcome: An US$11bn arbitration award against Nigeria set aside: it was obtained by fraud.

Quantum: US$11bn award (with interest) set aside

Applicable law: Arbitration Act 1996 section 68 (serious irregularity); English law; the gas supply and processing agreement between P&ID and Nigeria.

Issues in play: The finality of arbitral awards against the rule that fraud unravels everything. How far will a court go behind an award when the whole arbitration was corrupted?

Read the full decision at Courts and Tribunals Judiciary

Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.

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