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HomeTop NewsBREAKINVIEWS: Nigeria Is Right To Fight $9 Bln Arbitration Claim

BREAKINVIEWS: Nigeria Is Right To Fight $9 Bln Arbitration Claim

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As ironies go, it’s up there. Nigeria, spiritual home to the wealthy African prince internet scam, has been relieved of $9 billion by a dead Irishman. 

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Yet the case is no laughing matter for Africa’s most populous nation – which faces a crippling economic bill – or the UK-based arbitrators whose ruling looks legally sound but practically ridiculous. Reopening the case to hear the government’s credible but belated claims of fraud is the common-sense solution.
Last month’s ruling that British Virgin Islands-registered Process and Industrial Developments (P&ID) could start seizing Nigerian assets sent shockwaves through Abuja. The award, based on what P&ID claims it would have made, plus interest, from a gas project, is a third of the country’s annual budget and a quarter of foreign reserves.
Even in this context, central bank Governor Godwin Emefiele’s threat to Europe – help us stop this or face a flood of “refugees” due to the economic collapse of a nation of 200 million people – is a touch shrill. 
Yet the continent’s biggest economy is struggling to shake off a 2016 recession. And even if it doesn’t pay a cent to P&ID, whose only public face is a website with no address or telephone number, reneging on arbitration could have a chilling effect on foreign investment.
To a large extent, Nigeria has itself to blame. In the first instance, it should never have signed a 20-year gas contract with now-deceased Irishman Michael Quinn, whose business track record was mainly schmoozing Nigerian generals to win military supply contracts, according to Bloomberg. And when the dispute went to arbitration, it should have laid out Quinn’s CV in all its glory, rather than fluffing its lines in court and ignoring appeals deadlines.
Yet the sorry saga also casts an unflattering light on arbitrators. The judges’ initial award of $6.6 billion may have followed the letter of the law by taking P&ID’s uncontested profit projections at face value. But it makes little practical sense given the difficulties of turning business plans into cash in places like Nigeria. 
That undermines the credibility of a process that should serve as an insurance backstop to foreign projects in exotic jurisdictions. Finding a way to reopen arbitration might involve legal creativity. But it’s the best way to spare Nigeria’s blushes, and the judges’.

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