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Alleged Breach of Contract: U.S. Court Rejects Nigeria’s Request to Cancel N2.7 Trillion Fine

Published

7 years ago

July 15, 2018

Eric

The District Circuit Court in Washington DC has dismissed Nigeria’s request for it to set aside its $8.9 billion arbitration award against her over alleged breach of contract.

The court presided over by Justice Christopher Cooper said the request was denied not only on ground that it was belated, but also that it sought the dismissal of the petition for the enforcement of the award.

A government legal team led by the Attorney General and Minister of Justice, Abubakar Malami, left Nigeria on Wednesday morning to Washington DC to attempt to get the court to set aside the award against Nigeria.

The team, which jetted out of the country aboard a British Airways flight, also included the Solicitor-General of the Federation, Dayo Apata, and the Minister of State for Petroleum Resources, Ibe Kachikwu.

The team was joined by a team of foreign solicitors, Messrs Curtis, Mallet-Prevost, Colt & Mosle LLP, hired by the federal government to initiate the legal process to challenge the enforcement of the $8.9 billion award against the country.

But, the outcome of the court’s proceedings monitored by PREMIUM TIMES showed that Nigeria’s motion requesting the court to set aside the clerk’s entry of default award was dismissed.

The court however granted a part of the country’s motion that Nigeria was not properly served the process documents by addressing them to the “head of the ministry of foreign affairs” as is the practice under 28 U.S. Code section 1608(a)(3).

The code stipulates the order of service or delivery of a copy of the summons and complaint in U.S. courts to a foreign state or political subdivision of a foreign state.

In his ruling on Friday, Judge Christopher Cooper said the court would have granted Nigeria’s request to set aside entry of default in view of the country’s recent interest to appeal, but described the request as belated.

The law stipulates a period of 30 days within which copies of the summons and complaint and a notice of suit should be sent to a foreign state.

“The motion is DENIED to the extent it seeks dismissal of the petition,” the judge said.

The arbitration award was issued on March 20, 2013 in favour of a British engineering firm, Process & Industrial Development Limited (P&ID), over alleged breach of contract by the Nigerian government.

The original award against Nigeria was about $6.59 billion. But, following the country’s refusal to enter an appeal for over five years, the award attracted additional $2.3billion in accumulated interest at 7 per cent rate per annum.

On January 31, 2017, the three-man tribunal constituted under the rules of the Arbitration Act 1996 (England and Wales) and the Nigerian Arbitration and Conciliation Act (CAP A18 LFN 2004), gave the final award of $8.9 billion for enforcement.

PREMIUM TIMES learnt that the Malami team had received a directive from President Muhammadu Buhari to ensure they did all that is legally possible to get the U.S. Court to review its affirmation of the award and drastically reduce its value against Nigeria.

However, a senior Justice Ministry official who spoke with PREMIUM TIMES on condition of anonymity on Thursday said the main plank of the team’s argument, which they sold to the president, was that the court lacked the legal authority to give such a ruling against a sovereign nation like Nigeria.

Early this month, the Solicitor-General, Mr Apata, canvassed that line of argument in his reaction to PREMIUM TIMES’ earlier report on the final ruling by the tribunal against Nigeria.

On May 24 this year, this newspaper reported exclusively how the Nigerian government fell into big trouble capable of grounding her fragile economy following a request by P&ID for enforcement of the award.

The report detailed how a $6.59 billion arbitration award since 2013 over alleged breach of contract was allowed to build up to about $8.9billion (about N2.7 trillion at CBN’s N305.4 as of May 22) following accumulated $2.3 billion uncollected interest as of March 2018.

Official documents reviewed by this newspaper showed that a government negotiation team constituted in 2015 by the Goodluck Jonathan successfully negotiated an out-of-tribunal settlement with P&ID and got the company to accept an $850 million payment, about 9.6 per cent of the $8.9billion award.

However, rather than take the recommended action, the present administration opted to set aside the settlement agreement, directing its lawyers to return to the tribunal to renegotiate with the engineering firm.

The decision gave the tribunal the opportunity to enter its final ruling, after the first and second partial final awards on July 3, 2014 and July 17, 2015 respectively, effectively awarding $6.59 billion fine against Nigeria.

The refusal to settle the matter for over five years attracted additional $2.3billion in accumulated interest at seven per cent per annum.

But, Mr Apata in his reaction described the reports as “false”, claiming that the affirmation given by the tribunal on March 2018 to its January 2017 ruling was a “default entry by the clerk” rather than a “default judgement.”

The final ruling was handed down by the court following an application by P&ID seeking enforcement of the award after the Nigerian government failed to defend itself against allegations by the company.

Mr Apata told reporters the Arbitration court lacked the constitutional powers to issue such an order or award against a sovereign state like Nigeria.

“It needs to be stated that what is being touted as a default judgement was actually a default entry made by the court clerk. Under the Foreign Sovereign Immunities Act (FSIA), a defendant has up to 60 days period to answer to a petition filed against it.

“Where no response is entered for the defendant, the court clerk upon application by the petitioner, makes a default entry, which in this case was made on June 5,” he said.

Besides, he said there were certain conditions that must be attained before the U.S. court could deliver such a judgement.

According to Mr Apata, under the FSIA, a default judgement cannot be entered against a foreign state like Nigeria, unless the presiding judge determines so after the petitioner/claimant must have established its entitlement to a default judgment.

He said based on the presumption of sovereign immunity, the US District Court was still under obligation, despite default by a Foreign State, to determine whether the Foreign State was immune from the jurisdiction of the US Court under FSIA, or whether the case before it fell within one of the recognized exceptions.

Besides, he argued that even where the court had determined that it has jurisdiction, a default judgment would not be granted automatically, or as a routine matter to be handled by a court clerk, as this could only be done after a formal trial.

He cited the provision of Section 1608(e) of the FSIA, which states: “No judgment by default shall be entered by a court of the United States or of a State against a foreign state, a political subdivision thereof, or an agency or instrumentality of a foreign state, unless the claimant establishes his claim or right to relief by evidence satisfactory to the court… “

NIGERIA WAIVED HER SOVEREIGNTY UNDER AGREEMENT

Regardless, the three-member tribunal led by the presiding Arbitrator, Lord Hoffman, had noted in its final award that the agreement between P&ID and Nigeria was governed by the laws of the Federal Republic of Nigeria.

The tribunal said both parties had agreed that in the event of any dispute, each may issue a notice of arbitration under the rules of the Arbitration Act 1996 (England and Wales) and the Nigerian Arbitration and Conciliation Act (Cap A18 LFN 2004.

Under the Act, the parties agreed that any “arbitration award shall be final and binding upon the parties.”

Besides, following challenges to the tribunal’s jurisdiction in the United Kingdom and Nigeria, court documents seen by PREMIUM TIMES showed that P&ID told the court Nigeria was treaty-bound to pay the award.

The plank of the company’s argument was that by virtue of the terms of agreement they signed, agreeing to be bound by the outcome of any arbitration, Nigeria waived its right to immunity as a sovereign nation.

“The final award is governed by the New York Convention. So, Nigeria’s status as a foreign sovereign does not deprive the court of jurisdiction to confirm the award,” P&ID said in its application in March 2018.

Legal experts familiar with the matter said on Friday, the Nigerian team might have serious difficulties convincing the tribunal to change its ruling on the matter on the basis of the terms of agreement the two parties signed.

HOW IT ALL STARTED

The Nigeria government was accused of reneging on its obligation to supply gas to P&ID under an agreement to build and operate an Accelerated Gas Development project to be located at Adiabo in Odukpani Local Government Area of Cross River State.

P&ID said the country’s negligence frustrated the construction of the gas project, thereby depriving it the potential benefits expected from 20 years’ worth of gas supplies.

In August 2012, the company the government notice for Arbitration.

In July, 2015, the arbitral tribunal found Nigeria culpable of the breach and liable to pay damages.

On December 23, 2015, the government asked for the award to be set aside, despite committing under the agreement that the arbitration decision shall be final and binding upon parties.

So, on February 10, 2016, the application was dismissed, paving way for the hearing on July 22 to 24, 2016 to determine the damages.

Two members of the three-man tribunal, Lord Hoffmann and Anthony Evans, held that P&ID’s expenditure and income should have been about $6.597 billion if government fulfilled its obligation under the agreement.

Both officials said the award should be paid together with interest at the rate of 7 per cent from March 20, 2013.

The third member, who is Nigeria’s former Attorney-General and Minister of Justice, Bayo Ojo, said although P&ID was entitled to compensation for the breach, its damages could not have been more than $250 million.

On January 31, 2017, the court gave the final award as $8.9 billion, which included additional $2.3 billion in uncollected interest as of March 2018.

However, few days to the end of the Jonathan government, a $850 million agreement was reached with P&ID.

But, Mr Jonathan opted to transfer the responsibility of disbursing the funds to P&ID to the then in-coming administration of President Muhammadu Buhari since he was at the exit door already.

However, on December 23, 2015, the Buhari government asked the tribunal to set aside the award completely.

Culled from AllAfrica

Featured

Why I Visited Nnamdi Kanu in Prison – Alex Otti

Published

14 hours ago

December 21, 2025

Eric

By Eric Elezuo

Governor Alex Otti of Abia State has explained the reasons behind his much talked about visit to the leader of the Indigenous Peoples of Biafra (IPOB), Mazi Nnamdi Kanu, in Sokoto Correctional Centre.

Nnamdi Kanu was found guilty of all the seven count charges of terrorism brought against him by the Federal Government, and sentenced to life imprisonment, by Justice James Omotosho of the Federal High Court, Abuja, on November 20.

The governor also declared his intention to retire from partisan politics after serving as governor of the state.

Governor made these remarks in Umuahia while reacting to a viral video in which an individual berated him for visiting the IPOB leader in Sokoto Correctional Centre recently and alleged that the visit was aimed at positioning him (Otti) for either the presidential or vice presidential ticket. Otti however, denied having any presidential or vice presidential ambition after his governorship role.

According to him, he would not even contest for the senatorial position after serving as governor of Abia State.

Criticisms, he said, are part of democracy, adding that everyone is free to hold an opinion, even as he acknowledged that some criticisms, especially undue ones, are far from being the truth.

His words, “In the first place, that is the beauty of democracy. So, people should hold their opinions, and we respect people’s opinions. And that you hold a different opinion doesn’t mean you are right.

“One of the things he talked about was my ambition after being governor. And I had said it before, and I want to say it again, that by the time I’m done with governorship, I will retire.

“So, I don’t have presidential ambition, nor vice-presidential ambition. I also don’t have senatorial ambition. So, when I finish with the governorship, I’ll retire.

“I came for a mission. And when I deliver that mission, I will give way to younger people. So, he was talking of Igbo presidency. I don’t even understand what that means.

“So, I think if his thesis is based on that assumption, the assumption has collapsed, because he won’t see me on the ballot.

The Abia governor argued that it is important for a political office holder to know when to quit, especially when the politician has done what he is asked to do.

“When you have done what you have been asked to do, you clear, give way for other people. We’ve seen people here, after being governor who went to serve as Local Government Chairman. That’s not what we are. We are not cut out for those kinds of things.

Otti used the forum to explain why he visited Mazi Nnamdi Kanu at the Sokoto prison.

He said, “The second point is about Nnamdi Kanu. And I don’t want to put this matter in the public space so that it doesn’t jeopardise the discussions that I’m having.

“The truth about it is that exactly 24 months ago, I opened up discussions at the highest level on Nnamdi Kanu.

“And going to see him is the right thing to do, because he comes from my state. In fact, he comes from this local government (Umuahia North – the state capital).

“And there are always ways to solve a problem. I don’t believe that the way to solve a problem is to ignore it. And I had written extensively, even about Nnamdi Kanu and Operation Python Dance, I think in 2017 or 2018. And I condemned it.

“And I still condemn it. And some of the recordings that the gentleman put in his video, I cannot vouch for the veracity of that recording.”

Governor Otti maintained that he knows that when an issue has been approached from the legal point of view, there is also another window called the administrative point of view, stressing that, that is where he (the governor) is coming from.

“I’m not a lawyer. And if the judiciary says the man has been condemned to life imprisonment, that is the judiciary. Even that is not the end, because that’s the court of first instance. There is still an opportunity to appeal and then an opportunity to even go to the Supreme Court.

“But what we are trying to do is to intervene. I’m not a supporter of the disintegration of Nigeria.

“So, my position is that it would be insensitive of me to sit here and say one of our own who has been convicted should die when we have an opportunity to discuss, negotiate, and sue for peace. So, that is my position,” he said.

Featured

How Glo Network Became the Lifeline That Saved Two Lives: A True Story from Sallari

Published

1 day ago

December 20, 2025

Eric

By Dr. Sani Sa’idu Baba

It was one of those calm, bright mornings in Sallari, a town in Tarauni Local Government Area of Kano State. I had gone to visit my longtime friend and colleague, Dr. Muhammad Umar Abdullahi, at his private facility, Rauda Clinic and Maternity. We were in his office discussing research, the usual challenges of medical practice, and other issues when the sound of hurried footsteps and anxious voices broke the calm. A young man rushed in, calling for the doctor.

Without hesitation, Dr. Muhammad sprang into action. I followed him instinctively. Within moments, two people burst through the gate, one man carrying a weak, heavily pregnant woman in his arms. Her breathing was shallow and wheezy, her face pale, and her body trembling between labor contractions and an asthma crisis. The scene was intense, we both knew that every second counted.

The team quickly moved her to the emergency bed. The Chief Medical Director Dr. Muhammad and his nurses worked swiftly to stabilize her breathing and monitor the baby. Oxygen was connected, IV lines were set, and within minutes, her breathing began to steady. The baby’s heartbeat was strong. After a short but tense period, she delivered a healthy baby girl. Relief filled the room like a gentle wind.

At that moment, I couldn’t help but admire the efficiency and dedication of Rauda Clinic and Maternity. The facility operated with the precision and compassion of a modern hospital. Every member of the team knew their role, every piece of equipment was in place, and the environment radiated calm professionalism. It reminded me that quality healthcare is not only about infrastructure, but about commitment and readiness when it truly matters. Rauda Clinic stood out that day as a quiet pillar of excellence and hope for patients and families alike.

The following day, I placed a call to Dr. Muhammad to ask about the condition of the woman who had been brought in the previous morning. He sounded cheerful and relieved. “Both mother and baby are fine now,” he said. Then, with deep reflection in his voice, he narrated the extraordinary story behind their survival, a story that showed how a single phone call, made at the right moment, became the bridge between life and death. As I listened to him recount the events, I couldn’t help but marvel at how sometimes, survival depends not only on medicine but also on connection.

Her name was Amina, a mother of three. That morning, she was alone at home, her husband was in Dutse, the capital of Jigawa state where he works, and her children had already gone to school. The first wave of pain came suddenly, followed by a tightening in her chest. Within minutes, she was gasping for air, her asthma worsening with every breath. She reached for her phone to call her husband, but the call wouldn’t go through. She tried again and again, each time, “Network error.”

Her strength was fading fast. She tried to reach her neighbors, but again, no connection. Alone, frightened, and struggling to breathe, she said she felt her end was near. Then, a thought crossed her mind, her maid had left her phone in the sitting room that morning. Gathering the last of her strength, Amina crawled toward the television stand where the phone lay.

When she reached it, she noticed the green SIM icon, it was a Glo line. Hope flickered. But when she tried to make a call, she saw there was no airtime. That could have been the end until she remembered Glo’s Borrow Me Credit service. With trembling fingers, she dialed the Glo borrow me code and she got the credit instantly, and that small credit became her lifeline.

Her first attempt to reach her husband failed. Then she dialed her younger brother, Umar. This time, the call went through immediately. Interestingly, Umar is a Glo user too. Without delay, Umar and his wife rushed to her house, found her collapsed on the floor, and carried her into their car.

On their way, Umar called ahead to alert the doctor, and again, the call went through clearly. By a remarkable coincidence, Dr. Muhammad was also using a Glo line. That seamless connection meant the hospital team was fully prepared by the time they arrived. Within minutes, Amina was stabilized, and both she and her baby were safe.

The next morning, Dr. Muhammad told me that Amina had smiled faintly and said to him, “Doctor, when every other network failed me, Glo answered. If that call hadn’t gone through, I wouldn’t be here today.”

Her words carried a truth that stayed with me. It wasn’t just a patient’s gratitude, it was a testimony about the power of reliable connection. At that moment, Glo wasn’t just a telecommunications network, it was the bridge between life and death, between despair and hope.

In today’s world, a simple phone call can determine whether someone lives or dies. That day reminded me that technology, when dependable, is not just about data speed, it’s about human connection at its most critical. Glo proved to be that connection: steady, available, and trustworthy when it mattered most.

Before she was discharged, she laughed and told the doctor she had already chosen a nickname for her baby “Amira Glo.” They both laughed, but deep down, Dr. Muhammad understood the meaning behind that name. It symbolized gratitude, faith, and survival.

As I ended the call with Dr. Muhammad that day, I felt a quiet pride. I had witnessed not just the miracle of life, but the harmony of medicine, compassion, and reliable technology. Through Rauda Clinic and Maternity, I saw what true service means, dedication without boundaries, and connection that saves.

Amina’s story isn’t an advert, but living proof that sometimes, when every other signal fades, Glo stands firm, and when every other facility seems far away, Rauda Clinic and Maternity remains a beacon of care and excellence.

For patients, families, and health workers alike, Glo is proven to be a network of necessity. It connects life to hope, when every second truly counts…

Dr. Sani Sa’idu Baba writes from Kano, and can be reached via drssbaba@yahoo.com

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Delta Govt Confirms Death of Senator Nwaoboshi at 68

Published

2 days ago

December 20, 2025

Eric

Senator Peter Onyelukachukwu Nwaoboshi, the former lawmaker who represented Delta North Senatorial District in the National Assembly, has passed away. He was 68.

Reports said that Nwaoboshi died on Friday in Abuja following a brief illness.

His demise was confirmed in a condolence statement issued by the Delta State governor, Rt. Hon. Sheriff Oborevwori.

Expressing sorrow, the governor described Nwaoboshi’s passing as a monumental loss to Delta State, the Anioma nation, and the Nigerian federation.

In the statement by his Chief Press Secretary, Sir Festus Ahon, Governor Oborevwori hailed the late Senator as a “fearless advocate” of the Anioma cause whose contributions to nation-building remain indelible.

The governor recalled Nwaoboshi’s impactful tenure in the Red Chamber, particularly his role as Chairman of the Senate Committee on Niger Delta Affairs.

He noted that Nwaoboshi’s consistent advocacy for the development of the oil-rich region distinguished him as a passionate and committed leader.

“On behalf of the government and people of Delta State, I mourn the passing of my dear friend, Senator Peter Onyelukachukwu Nwaoboshi,” the governor said.

“I extend my heartfelt condolences to his immediate family, the people of Anioma nation, members of the All Progressives Congress (APC), and all those whose lives he touched. I pray that Almighty God grant his soul eternal rest.”

Before his elevation to the Senate in 2015, he served meritoriously as a two-term Chairman of the Peoples’ Democratic Party (PDP) in Delta State, where he was instrumental in consolidating the party’s grip on the State.