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The UK Supreme Court has confirmed a £44 million costs order in favour of Nigeria after it successfully contested an arbitral award of US$11 billion, ruling that there was no mistake in the judge’s choice to award costs in sterling instead of naira.
In a unanimous ruling delivered by a panel of five justices on Wednesday, the UK Supreme Court held that Process & Industrial Developments (P&ID) must pay the £43 million award in pounds, the currency Nigeria used to compensate its legal representatives in the matter.
While announcing the judgment, the UK Supreme Court held that there were no grounds to award costs in any currency other than sterling, since English lawyers billed in sterling and Nigeria incurred expenses in sterling.
The Supreme Court panel declined to examine how Nigeria financed its legal costs after P&ID claimed that Nigeria converted naira into sterling to fulfil its financial responsibilities to its English attorneys. The Supreme Court dismissed P&ID’s argument that if the awarded amount is paid in sterling, Nigeria would receive a considerable benefit at P&ID’s expense because the sterling amounts Nigeria paid its solicitors were roughly equivalent to 25 billion naira when made, whereas they are now valued at around 95 billion naira.
P&ID had entered into a contract in 2010 to build a gas processing plant in Calabar, Nigeria, but the agreement collapsed due to alleged non-fulfilment by the Nigerian government, which accused P&ID of fraud.
P&ID denied the claims, resulting in a legal dispute that awarded P&ID $6.6 billion in damages in 2017, later totalling $11 billion with interest.
In October 2023, a UK judge halted enforcement of the award, ruling that it was obtained through fraud, and ordered P&ID to pay £43 million in legal fees to Nigeria.
P&ID appealed, challenging the currency of the payment, but in July 2024, the UK Court of Appeal dismissed the appeal, confirming that the legal costs must be paid in British pounds.
