CBN sees rise in Fx reserves as London Court rule against P&ID
A London Commercial court has ordered the release of the $200 million guarantee put in place as security for the stay of execution granted Nigeria in the case between the country and Process and Industrial Development Limited (P&ID).
Nigeria had filed an appeal against the execution of the Arbitral award of $10 billion to P&ID over a failed gas contract in the country and in the course of the appeal, Nigeria was asked to pay $200 million as guarantee before it could secure the appeal.
However, ruling on the move by P&IDto go increase the guarantee money from $200 million to $400 million, the justice of the court Ross Cranston rejected the request of P&ID to increase the security to $400 million and awarded a cost against the company and asked that the initial deposit be released to Nigeria.
The judge went ahead to award a cost of £70,000 against P&ID. It will be recalled that same court, earlier in September 2020, had also granted another cost of £1.5 Million against P&ID.
The Central Bank of Nigeria (CBN) governor, Godwin Emefiele who broke the news through a statement on Tuesday expressed pleasure that the Court rejected the P&ID’s application to increase the guarantee, which he noted was clearly intended to be a diversionary tactic and entirely misconceived.
“Due to the substantial evidence of prima facie fraud established before the Court, we are pleased that the Judge has agreed to release the guarantee.
“This release, which is accretion into the reserves will further enhance the nation’s management of the exchange rate of its domestic currency, the Naira while ensuring monetary and price stability,” Emefiele said.
Tuesday’s order is seen as a further and significant victory for Nigeria in its determination to overturn the $10 billion award procured through fraud and corruption by P&ID and former government officials.
Analysts are of the view that P&ID and its backers, Lismore Capital and VR Advisory, are increasingly fighting a lost battle, as they continue to resort to employing delay tactics, disseminating misleading claims, and taking every step to obstruct investigations across multiple jurisdictions.