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Date: September 20, 2019, 05:07:33 AM

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Presidency Hawks Want FG to Seize Bonga over $9.6bn Judgment Debt: Politics : Nigerialog.com - Nigeria's Premier Online Forum

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Presidency Hawks Want FG to Seize Bonga over $9.6bn Judgment Debt

By: dayan (M) |Time : September 02, 2019, 07:52:35 AM

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    EFCC opened investigations into failed project 2015
    Report shows how P&ID repudiated $600m settlement deal

Iyobosa Uwugiaren in Abuja

As the $9.6 billion arbitration award and United Kingdom Court enforcement judgment against Nigeria in favour of an Irish firm, Process & Industrial Developments Limited (P&ID), continue to generate controversy, presidency hawks are urging the federal government to take stern actions to protect the country’s assets threatened by the hefty award, THISDAY learnt last night.

According to impeccable presidency sources, the actions being proposed include the seizure of Bonga Deep Water Oil Field in which a British company, Shell, has substantial interest as well as other British and Irish businesses.

THISDAY learnt that those businesses would be targeted if the arbitral award is levied against Nigeria’s assets in the United Kingdom.

The paper also found that a status report by the Ministry of Justice written for the federal government revealed how efforts by both President Muhammadu Buhari and Vice-President Yemi Osinbajo to negotiate the award with the company failed.

The report said following presidential intervention after the award, P&ID agreed with a delegation of the federal government to accept $600m as settlement but later reneged on the deal.

Presidential sources told THISDAY last night that the hardliners are pushing for a punitive response because they felt that the failed gas to power project signed in 2010 was a fraudulent deal and ought not to stand.

They drew strength from the interim report of the Economic and Financial Crimes Commission (EFCC) on an investigation it launched on the bad deal in 2015, which found that the contract was neither authorised by President Umaru Yar’Adua nor approved by the Federal Executive Council (FEC) that have the power to seal such a deal.

Besides, the EFCC found that there was collusion between some officials of the Ministry of Petroleum Resources and P&ID to defraud the country.

“Given this background, senior officials at the presidency are shocked that the British Commercial Court could allow its high position to be used to obtain a judgment that could undermine the economy of a developing country,” a source said.

He said for the hardliners, because of the quantum of the award and its likely effect on the country’s foreign reserve, the matter had become a national security issue, which the federal government must take concrete steps to protect.

“They feel that if $9.6bn worth of assets of Nigeria is seized, it has the real potential of adversely affecting the country’s economy and could lead to so much social dislocation that could force many young Nigerians abroad,” another source said, adding: “That is a prospective they feel the federal government must prevent by all means.”

Consequently, he said, the hawks argued that the federal government must take actions that would deter the British government from encouraging the attachment of Nigerian assets by demonstrating its willingness to retaliate any unfriendly action, which could include targeting British and other business interests in the country for takeover.

The presidency, the source said, had consequently directed the Central Bank of Nigeria (CBN) to liaise with the Attorney-General of the Federation (AGF) and Minister of Justice to take all measures to protect Nigeria’s interests, including renegotiation of the award and appeal of the enforcement judgment.

If these fail, said the source, then Bonga and other British as well as Irish business interests in the country that are commensurate to any Nigerian asset attached would be seized. 

Report Shows How P&ID Repudiated $600m Settlement Deal

THISDAY also gathered yesterday that P&ID had agreed with the federal government to accept $600 million as final settlement but later reneged on the deal.

The status reported seen by the paper revealed that upon being served with the final award in February 2017, with the tribunal awarding the claimant $6. 597Billion plus interest at the rate of 7% from 20th March 2013, the Minister of Justice and Attorney-General of the Federation, Mr. Abubakar Malami SAN, on March 17, 2017 sent a letter to the vice president listing recommendations that he felt could resolve the matter.

The vice president, on April 18, 2017, approved the recommendations of the minister, which included a negotiation of the award with the P & ID.

Based on the vice president’s approval, the then Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, and their delegations along with the federal government counsel, Chief Bolaji Ayorinde SAN, on May 16, 2017, were said to have met with representatives of P & ID and its counsel to negotiate the award.

According to the report, ‘’The negotiation meeting was very successful given that the federal government team was able to negotiate the award from USD8.4Billion to USD600Million on the following terms: USD100Million will be paid to P&ID within 14 days by the federal government after execution of the Stay of Enforcement of Award Agreement; while the outstanding sum (USD500Million) will be paid through an asset that will be determined by the MPR.’’

In line with the terms, the P&ID forwarded a draft Stay of Enforcement Agreement through the federal government counsel, Ayorinde, which in turn was forwarded to the Ministry of Petroleum Resources for necessary action.

The reason for the foregoing decision, according to the report, was arrived at, considering the fact that the Ministry of Petroleum was supposed to make available the money and assets mentioned in the negotiation.

However, when the ministry forwarded its comments to the P&ID, the company was said to have totally rejected it on the ground that what was agreed on to be executed was a draft Stay of Enforcement Agreement and not a Settlement Agreement as proposed by the federal government.

The report added, ‘’Based on the rejection, a letter was written by the Minister of Justice on November 3, 2017 to the VP, seeking approval to re-negotiate the award with the P & ID. The approval of the VP was received on December 7, 2017 and same was communicated to the Minister of State for Petroleum Resources and the federal government counsel.

‘’The federal government counsel responded on February 19, 2018 stating that its request to re-negotiate the award was communicated to the P & ID, which appears no longer interested in the negotiated settlement arrived at on May 16, 2017. He further stated that the P & ID had proceeded to instruct its counsel to approach the court without further notice to federal government to recover the judgment debt and would only consider a pure settlement of the award.’’

According to the report, detailing what the federal government did to reduce the award, the P&ID was said to have further proposed another option as follows: that the federal government should accept service of court processes in respect of the enforcement proceedings. And that upon acceptance of the court processes should make a substantial down payment against the outstanding sums due under the award, and in return P & ID would agree to a temporary stay of such court proceedings to allow for a chance for a full resolution of the matter.

Consequently, the P&ID in April 2018 was said to have began enforcement proceedings in the United States of America against the ministry of Petroleum Resources and the federal government, claiming an amount above US$9Billion.

In response, Malami engaged the American law firm of Curtis, Mallet-Prevost, Colt & Mosle LLP to represent the interests of the federal government and the Ministry of Petroleum Resources with regards to the Arbitral Award Enforcement Proceedings involving P&ID and ensure the matter is diligently defended.

In the US proceedings, the P&ID had filed for entry of default on June 4, 2018, which was entered as a clerk’s entry of default on June 5, 2018. But the clerk’s entry of default was not a default judgment but a mere notice of an application for a default judgment.

According to the report, ‘’In response to the Petitioners application for default judgment, the federal government counsel (Law Firm) on 12 June, 2018 filed a motion to set aside the clerk’s entry of default for defective service, which was conceded to by the Petitioner (P&ID) and it applied to the court to cure the deficiency by serving a fresh process on the Ministry of Foreign Affairs and Ministry of Petroleum Resources through courier or normal mail.

‘’The law firm engaged in discussion with the P&ID Counsel (Kobre & KIM LLP) and proposed that a meeting should be held with the P&ID counsel and federal government delegation so as to discuss the settlement of the matter.’’

It said while the federal government proposed 12 and 13 of July 2018 for the meeting with the P&ID counsel in New York, which was approved by the P&ID counsel, the president directed the Minister of State for Petroleum Resources and the Attorney General of the Federation to ensure strong efforts were made by the federal government engaged solicitor, Curtis, Mallet-Prevost, Colt & Mosle, to seek ways of protecting the interest of the federal government in enforcement proceedings.

Buhari, the report added, further directed government officials to reopen negotiations with P&ID, with a view to arriving at a settlement in the neighbourhood of $250million in line with the recommendation/dissenting view of the Nigerian appointed arbitrator, Chief Bayo Ojo SAN, and that the settlement could be in the form of cash and Marginal Oil and Gas Field or cash only.

While Buhari was expecting the draft settlement agreement with P&ID for his consideration before it would be finalized, the Minister of Finance was to pay the sum of $100million into an escrow account to indicate the seriousness of the government to negotiate a settlement.

According to the report, “In line with the directive and approval of the president, the federal government delegations were in New York, USA to meet with the counsel to P&ID (Kobre & Kim LLP) between 12 and 13 of July, 2018 to discuss the settlement of the matter.

“Prior to the meeting with the P&ID counsel on July 13, 2018, the delegations had a meeting with the federal government counsel handling the matter, Messrs Curtis, Mallet-Prevost, Colt & Mosle LLP, on the 12 July, 2018 to discuss the strategies of proceeding with the settlement with the P&ID.

“At the meeting P&ID was of the opinion that the settlement offer by the government in May 2017 at the settlement meetings in London was not mutually agreed by the parties and does not represent the collective intention of the parties, saying it was no longer looking to accept marginal field assets as part of the settlement but would rather expect monetary payments.

“P & ID was also looking for a sum in excess of USD2 Billion in the settlement of the claim, stating it may consider a stand-still agreement backed by a part payment and specific arrangements on payment of the balance.”

On its part, said the report, Nigeria was favourably disposed to a settlement of the dispute at a reasonable sum, while maintaining that it would not consider a stand-still agreement, but would rather favour payment of a reasonable sum in full and final satisfaction of the claim.

Nigeria further said that it would only consider monetary payments to P&ID, and in this regard offered a sum of USD250Million to the company which it rejected.

The report further stated: “After the breakdown of negotiations, the P&ID continued with the enforcement action and simultaneously filed an action in the United Kingdom (UK) court for the recognition and enforcement of the arbitral award in the UK, which led to the recent judgment against Nigeria.”

Source

Re: Presidency Hawks Want FG to Seize Bonga over $9.6bn Judgment Debt

By: dayan (M) |Time : September 02, 2019, 08:07:09 AM
The first thing that stood out for me in this whole mess is the statement below:

Quote
Besides, the EFCC found that there was collusion between some officials of the Ministry of Petroleum Resources and P&ID to defraud the country.

The question is WHO AND WHO did this collusion?
"Officials of the Ministry of Petroleum Resources" are obviously Nigerians, with names and addresses.
Why are they not in jail yet?

What worries me here is that the so called "hawks" in Buhari's government actually expect the British to do the gate-keeping for them, and they proceeded to say this below:

Quote
“Given this background, senior officials at the presidency are shocked that the British Commercial Court could allow its high position to be used to obtain a judgment that could undermine the economy of a developing country,” a source said.

These government officials actually expect the British government to pressure their business people to not accept deals even if it amounts to outright theft, from a so called "developing country"?

The truth is that a lot of business deals are legal even if they border on taking undue advantage of the other guy.
As long as you do not violate international laws of commerce, you can actually steal and get away with it, and the laws would back you, which is why this company is winning and will likely get paid regardless of how immoral their claims might be.

The problem is that the Nigerians trusted with these types of deals lack education and international exposure, and even if they don't mean to, can concede these types of deals.
Nigeria has no reputation for putting round pegs in round holes anyways, so who says that some semi-literate person didn't cause this whole mess?

Re: Presidency Hawks Want FG to Seize Bonga over $9.6bn Judgment Debt

By: dayan (M) |Time : September 02, 2019, 08:13:13 AM
As for the threat to seize British or other western assets in Nigeria as vengeance, I would advice MAXIMUM caution, because the world has actually changed.
This is not the seventies when Obasanjo seized British assets and got away with it.
A lot of international treaties and conventions have come to force in between those years.
Today, companies are far more powerful than they were before, and they use those powers.
Nigeria cannot win this type of war.
So, the wise thing to do is to pay this money or at least convince this company to settle.
Being a business, and operating in a "dog eat dog" world, there is no assurance that the company would settle for anything less.
This is the price we pay for having square pegs in round holes.
BTW it is also the reason Nigeria does not have 24/7 electricity.

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