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US Tribunal clears Nigeria of wrong doing over $1.5 bln oil deal

By on October 9, 2020 0 117 Views

Nigeria again this week won another a long-running arbitration battle over an oil field, avoiding the award of $1.5 billion in damages, few weeks after a London Court ruled in her favour against the Process & Industrial Development Ltd (P&ID) on a fraudulent gas project case.

Nigeria is also seeking to overturn an arbitration award currently worth $10 billion that was issued in favor of Process & Industrial Development Ltd. in 2017 and upheld by a U.K. court last year.

Last month, a British judge granted the government’s request to take the British Virgin Islands-registered company to a fraud trial. Nigeria claims evidence of corruption perpetrated by P&ID has only recently been discovered.

P&ID denies all allegations of wrongdoing and accuses Nigeria of evading its legal obligation to pay the company.

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A tribunal at the Washington D.C.-based International Center for Settlement of Investment Disputes dismissed claims filed by the family of a deceased Italian businessman, Vittorio Fabbri, which alleged that Nigeria‘s government helped their father’s employee illegally seize control of his company after his death in 1998.

The decision “absolves the federal government of Nigeria from any liability,” Attorney General Abubakar Malami said in a statement. Interocean Oil Development Co. and Interocean Oil Exploration Co., two Delaware-registered entities controlled by the Fabbri family, filed their case against Nigeria.

The company at the heart of the conflict, Pan Ocean Oil Corp., was the operator of an onshore oil block from the 1970s until last year when the Ministry of Petroleum Resources revoked the permit due to unpaid taxes.

The Nigerian government took over all assets belonging to tycoon Festus Fadeyi, including Pan Ocean, in July, saying he owed N240 billion in debts. The Fabbri family used to own Pan Ocean through the Interocean companies.

While the tribunal accepted that Fabbri’s family was deprived of its ownership of Pan Ocean when Fadeyi took over the company, it didn’t conclude, as was alleged, that the Nigerian government was complicit in achieving that outcome or responsible for any losses they suffered, according to a copy of the award seen by Bloomberg. It ordered the Interocean companies to pay costs of $660,000 to Nigeria.

Pan Ocean produced an average of 3,400 barrels of crude per day from its license, known as Oil Mining Lease (OML) 98, in 2018, according to government data.

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