Reps set up committee to probe $9.6bn P&ID controversial contract

The House of Representatives on Wednesday resolved to investigate the $9.6 billion judgement debt and the controversial contract.

The resolution followed the adoption of a motion of urgent National Importance into ‘act of negligence of the P&ID Limited’s transaction by the Ministry of Justice and Ministry of Petroleum Resources respectively,’ sponsored by Hon. Julius Ihonvbere.

To this end, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila set up 17-member Ad-hoc Committee, chaired by Hon. Sada Soli, that will investigate the circumstances surrounding the award of the contract without the Federal Executive Council (FEC) approval.

In his lead debate, Hon. Ihonvbere lamented that the recent judgement debt of $9.6 billion (with daily interest accruing) by a commercial court in the United Kingdom against Nigeria, in a matter between P&ID Limited leaves a very sour taste in the mouth.

He maintained that “for a country with a foreign reserve of only $45billion and a sovereign debt profile of over $80 billion, this judgment debt was not only punitive but would devastatingly affect the Nigerian economy.

“The House is aware of the fact Nigeria has a penchant for disregarding the sanctity of contracts and terms of agreement, coupled with the failure of Nigeria’s representatives in many cases, to carefully or diligently scrutinize agreements they sign knowing that the consequences will affect past and future generations.

“Nigeria had entered into a Gas Supply and Processing Agreement (GSPA) with P&ID Limited, in January 2010, through the Ministry of Petroleum Resources with the understanding that Nigeria would supply natural gas (wet gas) at no cost, through a government pipeline to P&ID’s production facility, while P&ID in return would construct and operate the facility, process the Wet Gas and return to the government of Nigeria lean gas for the generation of power at no cost to Nigeria.

“The House is further aware that two years down the line, P&ID had not built any gas plant to which Nigeria could supply wet gas for processing, signifying in the first place that the move to Arbitration was opportunistic and grossly self-serving.

“The House is cognizant of the fact that, the matter went before an Arbitration Tribunal, under the Rules of the Nigerian Arbitration and Conciliation Act 2004, with London, England as place of Arbitration. After affirming its jurisdiction in the matter, the Tribunal began hearing to determine whether or not there were any repudiatory breach of contract.

“At this point, there was an attempt by the Ministry of Petroleum to reach a settlement agreement with P&ID Limited to the tune of $850million, payable in instalments which obviously was not diligently pursued.

“The House is alarmed that the agreement was somewhat shrouded in secrecy and as such apparently dubiously procured, as those who ought to know about its existence did not and more importantly, the relevant Laws in Nigeria for the transaction to be consummated was not applied especially, Part IV of the Bureau of Public Procurement Act 2007 which deals with the Fundamental Principles of Procurement.

“The House is further alarmed that it took the new Nigerian government more than 4 months to respond to the vital arbitration judgement of about $6 billion with a ridiculous excuse that there had been a change of administration in Nigeria and that Ministers, including the Attorney General had only just been appointed thus asking for an extension of time to act on the outcome of the Arbitration Tribunal.

“Rather than engage P&ID in the matter before the tribunal with robust legal arguments and interpretations, Nigeria was busy shopping for a favourite forum to plead her case in a court in Lagos, Nigeria.

“The House is worried that the lack of diligent prosecution of cases in which Nigeria is involved by those whose duty, it is to do so, is due to our tendency to either politicise everything or focus more on personal interests, or failure on the part all parties involved,” he noted.

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He observed that that Butcher, J. (the Judge in the matter) in his August 16, 2019 ruling made heavy weather out of several acts of omission on the part of the Nigerian authorities, especially when he noted that “…the FRN had remedies for many procedural unfairness, but it did not utilise them”.

He argued that Nigeria could also have objected to Procedural Order No. 12 or question the Final Award. In the words of Butcher J., “it did neither and the time for doing so is long past.”

Hon. Ihonvbere maintained that “these are serious indictments of the incompetence and gross negligence displayed by our representatives/agents/arbitrators in the matter. The House further observed that this embarrassing judgement exposes a deep decay in our governance and leadership infrastructure with far-reaching implications for the credibility of the country’s capacity to handle business and legal cases,” he stressed.
Some of the lawmakers who spoke in favour of the motion are: Hon. Luke Onofiok, chairman, House Committee on Federal Judiciary and Hon. Benson Igbakpa.