The Federal government of Nigeria has instructed its solicitor to appeal the judgment of Justice Butcher of the UK Commercial Court that an Irish company P&ID can seize $9 billion worth of Nigeria’s assets.

The Irish company and Nigeria have been at a legal battle over a gas supply agreement that failed with the government of Nigeria.

In a statement issued on Friday by Mr. Dayo Apata, the nation’s Solicitor-General, the nation is going to appeal this judgment and would want a stay on execution.

PROCESS & INDUSTRIAL DEVELOPMENT LIMITED V. FGN

1. Recall the difference that led to Arbitration between Process and Industrial Development Ltd and the FG of Nigeria following a 20 year Gas Supply and Processing Agreement (GSPA) made in 2010 between FGN and P & ID in respect of a gas development project in Nigeria’s OMLs 67 and 123. P&ID never commenced the construction of the project facility though it reported that it made about $40 Million in preliminary expenses.

2. The firms claim in the proceedings was mainly for loss of profit for the whole 20year term of the GSPA, at first claiming the sum of US$1.9 Billion and later claim went higher to US$5.9 Billion.

3. On 31st January, The Arbitral Tribunal gave its Final Award against the Ministry of Petroleum Resources in the sum of US$6.597 Billion along with pre-award interest at the rate of 7% yearly, starting 20th March 2013 and post-award interest at the same rate till payment date.

4. The tribunal decided some things while granting the huge arbitration award against Nigeria:

that the project would be operated at 93%uptime during the 20 years of the GSPA though the popular risks of running such a project in the Niger-Delta.

that the Natural Gas Liquids’ average price should be based on an average oil price above $100/barrel over the twenty-year life of the project;

to apply a discount rate to P&ID’s supposed lost profits of 2.65 %, the similar interest rate paid on US Treasury notes thereby adjudging P&ID, a start-up firm that never started any physical work on the project but planned to operate amid the Niger-Delta crisis.

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