Olisa Agbakoba, Senior Partner and Head of the Arbitration and Alternative Dispute Resolution (ADR) practice group at Olisa Agbakoba Legal, has sounded a clear warning to the Nigerian government, emphasizing the need for caution when entering into international contracts to avert a repetition of the legal battle with Process & Industrial Developments (P&ID) Limited.
Agbakoba, who also chairs the national arbitration policy committee established by the outgoing Attorney General of the Federation, Abubakar Malami, conveyed his concerns during an exclusive interview with BusinessDay.
In this interview, Agbakoba commended the Nigerian government for its remarkable success in overturning the arbitration award, recognizing the rarity of such an achievement. He stated, “We’re very fortunate to emerge from this because overturning an arbitration award is no small feat. It marks only the third time in UK history that an award has been overturned, and I applaud the Nigerian government for an outstanding job.”
Agbakoba went on to address a more profound issue that Nigeria faces, emphasizing that the country is embroiled in approximately 1,000 pending cases globally due to the government’s perceived inconsistency in honoring its contracts. He attributed this problem to inconsistent contract practices and policy reversals by successive administrations. He advised the Nigerian government to treat contract agreements with utmost seriousness and review the manner in which policies are reversed.
This caution comes in light of recent developments in the legal battle between Nigeria and P&ID. On October 23, 2023, the Business and Property Court in London, presided over by Justice Robert Knowles, officially put an end to the enforcement of an $11 billion arbitration case that was initially awarded to P&ID on January 31, 2017, by the London Court of International Arbitration (LCIA), under the jurisdiction of Justice Christopher Butcher. The initial arbitration ruling had ordered Nigeria to pay $6.6 billion to P&ID for an alleged breach of contract.
The roots of this legal battle date back to January 2010 when the government, led by the late President Umaru Yar’Adua, entered into a Gas Supply and Processing Agreement with P&ID. However, by August 2012, the agreement unraveled as P&ID failed to produce the expected results. P&ID accused Nigeria of failing to provide the required gas supply for the project and subsequently took legal action, alleging a breach of contract.
Agbakoba’s warning serves as a crucial reminder of the importance of meticulous scrutiny and diligence in international agreements, safeguarding Nigeria against potential future legal disputes and financial implications.
