“74. … When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”
“… at least in the context of this case – the prevailing standard against which the conduct of any given official must be judged is not one of scrupulous professionalism, or even reasonable diligence, but is (regrettably) one of abject incompetence.”
“… we gave them the money for their travel allowance for want of another description and they don’t bring it with them, they leave it at home”
“… there might be an excellent opportunity to utilise the Engineering Work on Project Alpha already completed and paid for in order to develop a similar Gas Stripping Plant at Calabar”
"many of the items are to be determined (TBD) and others are assumed. This is just a starting point, but it indicates the information we require to produce the Process Information Package"
“As agreed at the meeting, we enclose a copy of our letter to the ministry dated the 18th of March 2009 detailing our expenditure of more than 40 million US dollars to date on the project”
“None of the engineering or licensing for Project Alpha will be used in the Calabar Project as the design is completely different”
“In respect of the Commercial Terms of the Gas Agreement, the Process & Industrial Developments standpoint remains unchanged to that presented at the various meetings, presentations and discussions to date, namely that the Government shall deliver to the Calabar site boundary, 400 MMSCuFD of Associated Gas having a minimum C3 (Propane) content of 3.5% mol and C4 (Butane) of 1.8% mol at No Cost, other than a nominal transmission fee (to be agreed). In turn, P&ID will process the gas, recompress the residual C1 and C2 (pipeline quality lean gas), representing approximately 85% of the wet gas feed, and make it available, for power generation, at the Calabar site boundary at No Cost to the Government.”
“Herewith my draft of the agreement. I have drafted it on a government "lock-in" basis in respect of gas supply and commercial terms. From everything I am hearing, it is my belief that politically (both Federal and State) they have no where else to go in terms of gas supply for power generation. The other companies being considered for the Short Term Gas Agreements have not even clearly identified their requirements. On these grounds I believe that supply locations and delivery pipelines should be left in the Ministry's court at this juncture. The detail can be sorted out under the ongoing JOC.”
“It was not necessary to resolve the issue of the precise composition and quantity of Wet Gas in OML 123 prior to entering in the GSPA because [Nigeria’s] obligation under the GSPA as signed on11 January 2010 was to supply a specified quantity and quality of gas, rather than gas from any particular source.”
“The Ministry of Petroleum Resources assistance is now urgently required to ensure this Accelerated Gas Development Project is not delayed.”
“…there is nothing to show that upon suitable terms the Government could not have obtained gas from their fields, as provided for and contemplated in Article 3c) under the heading “Scope of the Work” [see below]. … There is nothing to show that the Government could not have obtained the gas from the other sources mentioned in recitals b) and c).”
“Both a Gas Processing Contract and construction contract will be more detailed and I guess these documents will follow in due course”
“English law is preferable”
“Arcadia want English Law – We have located Arbitration in London instead but staying with Nigerian Law”
“[Honourable Minister of Petroleum Resources], 1. Please refer to the Draft Agreement attached a.b.c between the Ministry of Petroleum Resources and Process and Industrial Developments Limited for your signature. 2. Please recall that the MOU signed between the Ministry and P&ID was for the purpose of constructing a Natural Gas Processing Plant and to incorporate two process streams with a total capacity of 400MMSCuFD together with all utilities and storage facilities at Calabar. 3. P&ID has set a bench mark for the Short Term Project, by granting Government 10% of the Equity free of charge. 4. Accordingly, P&ID at Article 8 of this Draft Agreement has agreed among other things to transfer to the Government or its nominee a total of 10% of the Equity of P&ID in the following manner: I. Transfer to the Government or it's nominee five percent (5%) the Equity of P&ID upon the commencement of the delivery of not less than 150 MMSCuFD of Wet Gas to the Site as set forth as Phase 1 in Appendix A ii. Transfer to the Government or its nominee a further five percent (5%) of the Equity of P&ID the said Equity to be transferred pro rata as the delivery of the remaining 250 MMSCuFD is successfully implemented as set forth as Phase 2 in Appendix A. iii. All of the Equity to be transferred under Article 8 shall consist of fully-paid Ordinary Shares free of all liens and charges and no sums whatsoever shall be payable by the Government in respect of the Equity so transferred. 5. Most importantly, P&ID has agreed to build the Pipeline at no cost to the Government. 6. In addition the following concessions were made by P&ID:- a. Article 5 dealing with the duration of the Agreement, P&ID submits that during the subsistence of this Agreement Government at all times have the right to audit the Accounts of P&ID. b. Article 8 (e), dealing with Commercial Terms P&ID agrees that Government shall be given the right of first refusal where P&ID desires at any stage to dispose of its GPFs. c. Article 8 (i) having agreed by Government and P&ID that the Project shall be designated a COM Project and by extension all earnings or revenues arising from the Project status will accrue 50% to P&ID and 50% to the Government 7. Noteably at back cover of the Agreement, P&ID has submitted Work Schedules/Programme up to its completion. 8. Subject to your comments to the contrary, I advise that [the Minister] signs these Agreements to ensure a leap forward for short Term Gas operations in the country as directed by Mr. President. 9. Submitted, please. Mrs Grace E.O. Taiga Director (Legal)18th December 2009 ”
“what I meant by that is that I am submitting the agreement as having been duly prepared for your signature. That is usual civil service language. ‘I advise’ does not mean he’s bound to take what I said, and I advised ‘subject’ … means that he is an icon in the oil industry, he knows better.”
“You do realise that if you do not source the gas then P&ID might terminate for breach and Nigeria could be liable for billions of dollars even if P&ID has not started on the GPFs at Calabar”
“D/Legal [Mrs Grace Taiga] Pls forward copy to DPR for comments”
“b) The Government of Nigeria has substantial undiscovered potential gas reserves, discovered but undeveloped gas reserves, developed gas reserves and associated gas reserves in its onshore and offshore territories largely in acreage allocated to international and indigenous operators.” “c) The Government through the NNPC owns approximately fifty-seven (57) percent of the gas resources in acreage allocated to the international operators.” “e) The Government is currently engaged in the development of a strategic natural gas policy, to ensure the smooth achievement of its objective for the effective development of gas in Nigeria to meet short term supply requirement for power generation.”
“the establishment of the GPFs and the supply of Wet Gas thereto and the delivery of Lean Gas and their successful operation by the Parties as set out in this Agreement” where, from the definitions in Article 1: ““GPFs” means the Gas Processing Facilities to be constructed and operated at the Site and off-shore from the site where applicable.” (and “Site” means “the land in Calabar on which the GPFs are located”) ““Wet Gas” means associated gas removed, during oil production, at theseparator having a Propanecontent of notless than 3.5 molpercent and a Butane content of not less than 1.8 mol percent, compressed and delivered, via pipeline to the Site.” ““Lean Gas” means pipeline quality gas having a composition of not less than 95 mol percent Methane and Ethane”
“j) The Parties are entering into this Agreement to ensure the Fastrack implementation of the Project and to ensure the timely provision of pipeline quality Lean Gas for power generation.”
“vii. MMSCuFD” means Millions of Standard Cubic Feet per Day;” “viii. “NGLs” means all hydrocarbons remaining after processing the Wet Gas removing the Lean Gas;”
“2. OBJECTIVE The objective of this Agreement is to provide for the construction of Gas Processing Facilities by P&ID encompassing the provision of Wet Gas by the Government and the processing of the said Wet Gas by P&ID utilising two or more process streams with a total capacity of up to 400 MMSCuFD together with all utilities, support and maintenance facilities at the Site and the provision of Lean Gas by P&ID to the Government as set forth in this Agreement and its Appendices and to operate and maintain the facilities in an efficient manner.”
“3. SCOPE OF THE WORK The scope of works of this Agreement is as follows: a. P&ID shall construct GPFs on the Site allocated to them by Cross River State Government with related ancillary plant and equipment off-shore as required. The GPFs shall be constructed on a timely basis to ensure the earliest possible delivery to the Government, or its nominees, of approximately 340 MMSCuFD Lean Gas for power generation and industrial use by third parties. b. To ensure this Fastrack is achieved P&ID will construct and incorporate two or more process streams with a total capacity of 400 MMSCuFD together with all utilities, maintenance and support facilities at the Site in accordance with the schedule of works forming Appendix B hereto. c. The Government shall make available at the P&ID Site boundary, 400 MMSCuFD Wet Gas (free of water) in the manner set out in Appendix A having a minimum C3 (Propane) content of 3.5% mol and C4 (Butane) content of 1.8% mol from [fields] OMLs 123 and OML 67 or such other locations as the Government may decide from time to time to ensure the ongoing feedstock delivery volume and quality requirements for the duration of this Agreement as defined under Article 5 of this Agreement. d. P&ID will process the Wet Gas to be supplied by the Government and shall provide to the Government or its nominees approximately 85% of the wet gas feedstock molecular volume in the form of Lean Gas at the Site boundary.”
“APPENDIX A Delivery of Wet Gas to P&ID Phase 1: During or before the last quarter of 2011 a continuous supply of 150 MMSCuFD of Wet Gas, having a minimum Propane content of 3.5 mol% and minimum Butane content of 1.8 mol% will be supplied to the Site for processing by P&ID. Phase 2: On or before the third quarter of 2012 a further additional continuous supply of 250 MMSCuFD of Wet Gas, having a minimum Propane content of 3.5 mol% and minimum Butane content of 1.8 mol% will be supplied to the Site for processing by P&ID. Delivery of Lean Gas to the Government Phase 1: During the last quarter of 2011 following supply of the 150 MMSCuFD of Wet Gas to the Site, P&ID will process the gas and return to the Government, at the Site, a continuous supply of Lean Gas amounting to approximately 85% by volume of the Wet Gas provided. The Lean Gas will be compressed to 92 bar G. Phase 2: On or before the third quarter of 2012 following supply of the additional 250 MMSCuFD of Wet Gas to the Site, P&ID will process the gas and return to the Government, at the site boundary, a continuous supply of Lean Gas amounting to approximately 85% by volume of the Wet Gas provided. The Lean Gas will be compressed to 92 bar G.”
“9. JOINT OPERATING COMMITTEE a. The Joint Operating Committee (JOC) established by the Parties under the previous Memorandum of Understanding dated22nd July 2009 and comprising of two representatives from the Ministry of Petroleum Resources and two representatives from NNPC nominated by the Government and two representatives nominated by P&ID, shall meet at regular intervals during the Project implementation period to discuss in detail the implementation progress of the Project. Where deemed necessary by any JOC member of the Government or P&ID shall nominate such other expert support from other agencies as may be necessary to ensure that Project timelines are maintained. b. The JOC shall carry out further activities as may be determined by the Parties. c. Any cost that may accrue from the JOC activities shall be borne equally by the Parties.”
“6. RESPONSIBILITIES OF THE GOVERNMENT a. The Government shall deliver to the Site boundary the agreed quantities and quality of gas as defined under Article 3c and in the manner set out in Appendix A of this Agreement. b. The Government shall ensure that all necessary pipelines and associated infrastructure are installed and all requisite arrangements with agencies and/or third party are in place to ensure the supply and delivery of Wet Gas in accordance with Article 3 so as to facilitate the timely implementation of gas processing by the GPFs as provided for in this Agreement. c. The Government agrees to assist P&ID, and where necessary intercede with the relevant Government agencies, to obtain all requisite permits, licenses and approvals required from the relevant Government agencies or others for the Fastrack implementation of this project. d. If the Government or any of its agencies changes or amends any statute, rule, regulation, instrument or standards, and such change or amendment adversely affects the rights of P&ID under this Agreement, the Parties shall amend the terms of this Agreement in a manner that will restore the rights of P&ID. The Government shall grant to P&ID all such waivers and exemptions necessary to ensure that the rights of P&ID are not adversely affected by any change or amendment to statute, rule, regulation, instrument or standards.”
“7. RESPONSIBILITIES OF P&ID a. P&ID shall use best endeavours to ensure the fastrack implementation of this Project to construct and incorporate two or more process streams with a total capacity of 400 MMSCuFD together with all utilities maintenance and support facilities at the Site. Thereafter P&ID shall maintain and operate the GPFs on a professional basis to ensure a regular supply of Lean Gas (approximately 340 MMSCuFD) for power generation; b. P&ID shall, during the Project implementation period, submit to the JOC as set out in Article 9 updated work programs or such other documentation as may be necessary to enhance the development of the Project; c. P&ID shall do all that is necessary to obtain relevant approvals required for the success of the Project.”
“8. COMMERCIAL TERMS a. The Government shall deliver to the Site boundary, 400 MMSCuFD of Wet Gas as set out in Article 3 c) and in Appendix A of this Agreement having a minimum C3 (Propane) content of 3.5% mol and C4 (Butane) of 1.8% mol at No Cost of P&ID. b. P&ID will process the Wet Gas, recompress the residual Lean Gas, representing approximately 85% of the Wet Gas feed, and make it available, for power generation or other Industrial usage at the discretion of the Government, at the Site boundary at No Cost to the Government. c. Title to and ownership of the Wet Gas to be delivered by the Government to the Site shall remain vested in the Government and shall be delivered back to the Government at the Site boundary after processing in the form of Lean Gas but the NGLs removed from the Wet Gas during processing shall be retained by P&ID and shall be deemed the sole property of P&ID and the said NGLs may be sold by P&ID either domestically within Nigeria or exported in accordance with commercial criteria. d. P&ID shall provide all funding necessary for the timely construction, implementation and efficient operation of the GPFs and the said GPFs will be the sole property of P&ID and may be sold or otherwise disposed of by P&ID subject always to the provisions of this Agreement PROVIDED that Government shall be given the right of first refusal. e. As further consideration P&ID shall transfer to the Government or its nominee a total of ten percent (10%) of the Equity of P&ID in the following manner: i. P&ID shall transfer to the Government or it’s nominee five percent (5%) the Equity of P&ID upon the commencement of the delivery of no less than 150 MMSCuFD of Wet Gas to the Site as set forth as Phase 1 in Appendix A. ii. P&ID shall transfer to the Government or its nominee a further five percent (5%) of the Equity of P&ID the said Equity to be transferred pro rata as the delivery of the remaining 250 MMSCuFD is successfully implemented as set forth in Phase 2 in Appendix A. iii. All of the Equity to be transferred under this Article 8 (f) [sic] shall consist of fully paid Ordinary Shares free of all liens and charges and no sums whatsoever shall be payable by the Government in respect of the Equity so transferred. f. Following the initial transfer of five percent (5%) Equity to the Government or its nominees as provided for at Article 8 (e) above no new shares whether Ordinary, Preference or otherwise may be issued without the written agreement of the Government such agreement not to be unreasonably withheld and the Government shall be entitled to representation on the Board of P&ID in proportion to the Equity held by the Government at any given time. g. The Parties are aware that the 24 inch Adanga Pipeline presently under construction from the Addax [Petroleum] operated [field] OML 123 directly to Calabar and due for completion in 2010 will have a throughput capacity of 600 MMSCuFD and can adequately provide the required first delivery of 150 MMSCuFD of Wet Gas to the Site and that an additional pipeline of up to 70km in length may be required to link up to the Adanga pipeline in order to facilitate the delivery of the remaining 250 MMSCuFD of Wet Gas to the Site from other sources to be chosen by the Government. If such a requirement is necessary, P&ID undertakes to build and install the said additional pipeline to provide for the delivery of the remaining 250 MMSCuFD of Wet Gas to the Site, at no cost to the Government, and P&ID will retain the ownership and provide the maintenance for the pipeline. h. P&ID shall enjoy Pioneer Status with no import duties, clearance charges or taxes payable within Nigeria in respect of all equipment and materials utilised in the construction and commissioning of the GPFs and with no taxes payable in respect of the operation of the GPFs for a period of five (5) years from the commencement of commercial operations at the GPFs. i. The Government will actively support the designation of the Project as a CDM Project and P&ID will take all necessary steps to achieve such designation. All earnings or revenues arising from the Project status as a CDM Project will accrue 50% (fifty percent) to P&ID and 50% (fifty percent) to the Government.” (By Article 1, “CDM Project”: “means a clean development project as provided for in the Kyoto Convention and a CDM Project is duly authorised to engage in approved market based mechanisms in relation the Carbon Credits”
“I wish to state again emphatically that in such a case as this it is an immaterial inquiry to what extent the bribe or the offer of it influenced the person to whom it was given or offered. A contrary doctrine would be most dangerous, for it would be almost impossible to ascertain what had been the effect of the bribe…”
'A commission or other inducement which is given by a third party to an agent as such, and which is secret from his principal.'
'For the purposes of the civil law a bribe means the payment of a secret commission, which only means (i) that the person making the payment makes it to the agent of the other person with whom he is dealing; (ii) that he makes it to that person knowing that that person is acting as the agent of the other person with whom he is dealing; and (iii) that he fails to disclose to the other person with whom he is dealing that he has made that payment to the person whom he knows to be the other person's agent.'
“The funding for the project will have to come from Arcadia”
“It is entirely possible that the issue of finance will not be raised as it is not generally seen as a significant issue for the P&ID project. In such circumstance obviously we would not mention or refer to the issue in any way”
“The engineering is also in place to fast track the building of the [Gas Processing Facilities]”
“What is the likelihood of funds being available to re-start P&ID”
“decided to withdraw their cooperation and wished to undertake the development of the non-associated gas themselves.”
“[P&ID] further made known to [Nigeria] that even the expected 100 MMSCuF Wet Gas could only be made available to it in year 2014 and as a result of this time frame, [P&ID] was offered non-associated gas by Addax as an alternative to the Wet Gas envisaged by the GSPA, an offer which according to [P&ID] it agreed to “in principle”
“P&ID has not shown the occurrence of and difference or dispute as to the interpretation performance of the [GSPA], and consequently has not satisfied [Article 3(3) of theFirst Schedule to the Arbitration and Conciliation Act 2004 , of Nigeria]”
“[t]he money is a complete irrelevance here … [r]eputation and career are far more important to me than this notional money”
“On3 October 2013 the Respondent served a Notice of Preliminary Objection in which it alleged that the GSPA was void under Nigerian law because the Ministry lacked legal capacity to contract and because the Claimant had failed to comply with section 54 of the Companies and Allied Matters Act Cap 20 LFN 2004. It also alleged that the arbitration agreement was itself void for lack of capacity and that the tribunal therefore lacked jurisdiction.”
“42. We set about the necessary preparatory engineering work required to construct a gas stripping plant capable of processing 400 MMSCuFD of Wet Gas and a polymer grade propylene plant capable of producing 250,000 metric tonnes per annum of polymer grade propylene. 43. The idea was that we would obtain Wet Gas and process it to remove the NGLs (principally propane and butane). The propane would be used as feedstock for the polymer grade polypropylene plant, and the remaining NGLs could be sold, either domestically or on international markets. The Lean Gas could be sold for domestic power generation. 44. The Project at this point was not location-specific although as explained below the Lagos area was initially regarded as an attractive location. This was not only because of the existence of a number of natural gas fields both on and off the coast but because of the existence of a ready domestic market in Lagos for the Lean Gas. 45. The Project would return a high percentage of the Wet Gas as Lean Gas – about 85% by volume. By contrast, the process of liquefaction of Lean Gas would leave much less of the Wet Gas as residue Lean Gas. The Project was designed to produce Lean Gas for the national grid within 2 years of Government approvals, whereas a typical liquefied natural gas solution would take much longer to produce Lean Gas. 46. As we worked on the Project, we developed the concept of taking advantage of the inherent value in the NGLs typically found in Wet Gas as the principal source of revenue. This came to coincide with an important policy principle for the Nigerian Government known as the "Liquids Based Pricing Approach". This is described in the Government's National Domestic Gas Supply and Pricing Policy as follows (page 10 of MQ1): “(C) GAS PRICING REFORM - LIQUIDS BASED PRICING APPROACH A widely known characteristic of Nigerian gas is its relative richness in liquids i.e. NGLs. NGLs continue to attract a high price in international markets (similar trend in crude oil pricing). As a result of the potential high revenue that comes from NGLs produced in conjunction with residue dry gas, it is possible for a gas supply project to accommodate a relatively lower price for the residue dry gas and still be a profitable supply project. Residue dry gas is used mostly in the domestic market. This gas pricing policy aims to exploit this intrinsic value of NGLs in deriving a relatively low gas price for the strategic domestic sector - Power. It is recognized that not all gas resources in the country are rich in NGLs, consequently, it is intended that this philosophy be applied selectively - especially in the short term as the Power sector is currently unable to pay higher price for gas (in view of the low end user power tariff that currently obtains in Nigeria). It is however the expectation that in the medium term, power tariff will be more commercial and a higher gas price will be achievable.”
“47. During the course of the next two years [from 2006], we made good progress and reached a very advanced stage of the preparatory engineering work necessary to implement such a project on the ground. I would estimate that the total costs sunk into the preparatory work during that period were in excess of$40 million , including initial feasibility studies, the cost of licences for the technology required to operate the gas stripping plant and the propylene plant respectively, the production of detailed engineering drawings and our own internal project management costs. 48. By way of example, extensive work was commissioned from various specialist engineering companies such as CB&I Lummus Technology Group in New Jersey, KRAN Developments in Johannesburg and ABB Limited in the UK. The cost of the work of these 3 companies alone was about$29 million . In addition our own internal costs were significant. I would say that, from the commencement of our work on the Project in mid-2006, substantially the whole of our internal resource was devoted full-time to the Project. 49. By the end of the first 2 years of our work on the Project [i.e. 2008], we had put together a completed engineering package ready for actual permit applications, procurement and construction, which comprised about 100 volumes of documentation, together with a 3-D software model of the plant which was in such high detail that it would have enabled the training of the plant staff even before completion of construction. An electronic copy of a video from the 3-D software model is enclosed with MQ1. …”
“102. The day after the signing of the GSPA, on12 January 2010 , I wrote to the Minister on behalf of P&ID to inform him that P&ID wished to commence work at once ... 103. I was keen to implement the GSPA as soon as possible ... I wished to minimise any delay which might be caused by the operators of the 2 concessions that had been identified as likely sources of Wet Gas for the project. P&ID required from the Government certain up to date information which would be critical to the construction of the gas processing facility which P&ID would be building in Calabar to strip the Wet Gas. For instance, the precise make-up of the Wet Gas (which was also relevant to the Government's contractual obligations to supply Wet Gas with a minimum propane and butane content) and the pressure at which it would be delivered into the gas pipeline which would transport it to Calabar ... 109. In the meantime [in February 2010], the site for the onshore plant at Calabar for the construction of the gas stripping plant and gas storage facilities had been selected by P&ID and secured from the Government of Cross River State. On1 February 2010 Mr Hitchcock wrote to the Governor of Calabar requesting the formal allocation of the land upon which the plant would be constructed (pages 157 to 158 of MQ1). On16 February 2010 approval was granted, by the Government of Cross River State, to P&ID, for the allocation of Parcels 1 & 2 of the Energy City (Industrial) at Adiabo in Odukpani Local Government Area, containing an area of about 50.662 hectares of land, for the industrial use of P&ID (pages 159 to 160 of MQ1). 110. On14 May 2010 , I wrote to NNPC to update it on the progress made by P&ID. I pointed out that all of the project finance was in place, 90% of the engineering designs had been completed, a 50 hectare site had been allocated to P&ID by the Cross Rivers State Government, and that Addax Petroleum had confirmed to the DPR its readiness to supply to P&ID the Wet Gas that it was at that time flaring in [field] OML 123 in time for Phase 1 of the Project as set out in the GSPA. I asked the Group Managing Director of NNPC to authorise NAPIMS to oversee and conclude the necessary arrangements between P&ID and Addax [Petroleum], by which I meant the engineering logistics of delivery of the Wet Gas for Phase 1 from Addax [Petroleum], to enable work to proceed on the gas processing facility.”
“the question was … whether [P&ID] had followed through so as to put itself in a position to perform”
“On14 May 2020 , I wrote to NNPC to update it on the progress made by P&ID. I pointed out that all the project finance was in place …”
“… if the arbitrator has not ordered disclosure of the documents which are said to have been withheld, it is difficult to argue that the respondent has acted in a reprehensible fashion by not disclosing them”
“3. On11 January 2010 Claimant and Respondent (“the parties”) entered into a written Gas Supply and Processing Agreement (“GSPA”) whereby the Government agreed that for a term of 20 years it would make to available to P&ID 400 MMScuFD of Wet Gas and P&ID agreed to process the gas and return approximately 85% by volume to the Government in the form of Lean Gas. 4. For the purpose of enabling the Wet Gas to be processed, P&ID agreed to construct two or more process streams with ancillary facilities. 5. The supply of Wet Gas by the Government was to take place in two phases. In Phase 1, the Government was to supply 150 MMScuFD “during or before the last quarter of 2011”
“… by virtue of the [GSPA] [P&ID] was to construct and operate a gas processing facility in Calabar for the purpose(s) of refining Associated Gas (or “Wet Gas”) in order that the dissociated contents from the Associated Gas i.e. Methan[e]/Ethane Gas (the “Lean Gas” or “Non Associated Gas”) could be used for the very critical power generation to supplement the National Grid. [The Ministry of Petroleum Resources] was to supply an agreed volume of Wet Gas from identified OML's: OML 123 (operated by Addax Petroleum); and OML 67 (operated by Exxon Mobil) via a Government pipeline to [P&ID's] proposed production facility in Calabar. P&ID in return was to construct and operate the production facility as well as remove the Natural Gas Liquids which comprises of Propane, Butane and Condensates from the Associated Gas and utilize it for its own benefit and subsequently return the remainder (Lean Gas) to [the Ministry] and [Nigeria], for use in power generation for the benefit of the entire nation. [The GSPA] was to run for twenty (20) years. Ideally [the Ministry] should have provided the Wet Gas as promised, or in the event that the Gas was not available, (this non-availability was communicated to [P&ID] in a series of meetings between the Parties) its Defence could have been that of frustration or in the alternative, [the Ministry of Petroleum Resources] should have communicated to [P&ID] an event of Force Majeure that could have terminated [the GSPA]. However, there is no such evidence of any such exonerating event. Indeed there is record that the promised quality of gas was not available from the identified an promised OML 125 and OML 67. Furthermore there, is no evidence available to counsel that any investment decision necessary for the implementation of [the GSPA] had been made by the Federal Government. In view of the foregoing [P&ID] commenced arbitration … claiming damages in the sum of U.S.$ 5,960226,233 ... as damages for loss of profits suffered in consequence of [the Ministry’s] alleged breach of contract. [P&ID] also claims interest on sums awarded at such rate, to be determined by the tribunal. The undersigned was appointed as lead counsel … In a series of correspondence to [the Ministry of Petroleum Resources], we requested for information and documentation to enable us prepare a Defence to this matter. We remain poised to take up the defence if available. … The consequence of [the Award on Jurisdiction] is that the matter will now be heard on the merits. However there appears to be a lack of exonerating facts or any documentary evidence with which to defend the Claim. We refer you to our letter dated12th May 2014 and our several correspondence with [the Ministry of Petroleum Resources] seeking data documents and or information with which to defend. In view of the financial exposure to the Federal Government, which stands at US$5,962,262.233 ... the absence of a Defence to defend [P&ID’s] Claim could lead to a further unfavourable award against [Nigeria] … a tribunal may award a range of damages subject to the terms of the substantive contract, the arbitration agreement or the applicable law, which in this case is the Arbitration and Conciliation Act … 2004 [of Nigeria]. Although the Act does not specify the measure of reliefs or damages which an arbitrator can award, in principle an arbitrator may award a range of remedies such as damages in the claimed sum. Your kind and urgent intervention, including specifically a possible settlement of the claim for a compromised and significantly lower amount out of arbitration proceeding is required, in order to prevent avoidable embarrassment to the Federal Government of Nigeria.”
“Also, we have been requested by the Ministry to provide comments on your recommendation that they seek amicable settlement of the case with [P&ID]. As we discussed at our meeting of30th August 2014 we support the recommendation, but believe that while seeking to negotiate a settlement the Ministry should file a defence to the claim in order to maintain some leverage. Defence of the Claim As we discussed in Lagos, we believe the following defences should be made to the claim: (1) Even though [the Ministry of Petroleum Resources] failed to meet its obligation to provide gas to [P&ID], contrary to the agreements between [the Ministry] and [P&ID], this failure was due to the actions of third parties such as Addax Petroleum. [The Ministry] and NNPC, in fact, hosted several meetings between [P&ID] and Addax Petroleum to facilitate gas supply to [P&ID] but were thwarted by Addax Petroleum. This is confirmed by [P&ID]’s own pleadings. (2) A related defence would be that [the Ministry’s] failure to supply gas was due to circumstances beyond its control, and is therefore excused by the force majeure provisions in the agreements between [the Ministry] and [P&ID]. In support of this defence, we will obtain information from Addax Petroleum and our affiliate NAPIMS on the reasons why the Adanga Pipeline, specifically referred to in paragraph 90 of [P&ID’s] Statement of Case has not been completed. We suspect the reasons that the reasons for delay were likely buttress a plea of force majeure. (3) A further defence would be that even if the Arbitral Tribunal finds that [the Ministry] was in breach of its obligations under the said agreements, the quantum of damages sought by [P&ID] i.e.$5.9 bn , is excessive and outrageous. From the Statement of Case, [P&ID] have arrived at this figure by estimating the profits they would have earned from the project over 20 years. As you know, this is not the correct measure of damages as [P&ID] are required under the law to mitigate their loss, e.g. by investing in other projects with the funds they claim to have set aside for the project, and cannot validly make a claim for 20 years of profits. To strengthen this defence, we intend to engage a renowned, internationally recognised expert, with a lot of credibility, … to provide an expert witness. The expert witness would review the basis for [P&ID’s] claim, provide an alternative and more realistic measure of loss that is consistent with [P&ID’s] obligation to mitigate their loss and testify for [the Ministry] at the Arbitral Tribunal if it becomes necessary. Kindly obtain as much additional time as you can from the Arbitral Tribunal to enable us provide the information requested above. …”
“Post-Negotiation Meeting The [Ministry of Petroleum Resources] Team comprising of Mrs … Adelore – Director Legal, [Ministry of Petroleum Resources]/ representative of [the Attorney General], Mr Ike Oguie – Secretary to the Corporation, NNPC and Mr … Shasore, SAN – Lead External Counsel to [the Ministry of Petroleum Resources] met on Friday 28th November, 2014 to deliberate and consider the offer of U.S.$1,500,000,000 … as full and final settlement. The P&ID has conveyed same officially along with Draft Deed of Settlement which both parties upon approval shall submit to the Arbitral Tribunal. … Recommendation 26. In our view, the proposal of$1.5 billion made by P&ID is within the range which that could have been awarded by the Arbitral Tribunal if [the Ministry of Petroleum Resources] had contested at the least the quantum of damages claimed by P&ID. To that extent, it is a reasonable offer. 27. However the team believes that even though P&ID stated that the proposal is their final offer, there is room to reduce it further. An amicable settlement would increase P&ID's chances of the amount of settlement being paid within a reasonable time as opposed to there having to try to enforce a judgement against government. There are many potential impediments to such enforcement so P and ID is in a much better position if both sides reach an amicable settlement. 28. In our view the advantage of an amicable settlement over trying to enforce a contentious judgement, with the possibility of [the Ministry of Petroleum Resources] seeking to set aside the arbitral award, is a good reason to seek a further reduction from P&ID. 29. The team therefore recommends that [the Ministry] seek a further reduction of P&ID's final offer from$1.5 billion to$1.1 billion allowing for taxes, salaries and wages for five years in-action [sic].”
“Papa released d good news of the commencement of settlement sometime ago and was hoping to spend d Christmas hols in London!”
“Notwithstanding our line of defence, the Federal Government is still liable for failure to supply the requisite gas owing to the fact that the ownership of all crude oil, natural gas and their products and derivatives are vested in [Nigeria] through the NNPC. In addition, gas was never appropriated from OML 67, OML 123 or from any other source as agreed to by [Nigeria] in the GSPA.”
“2. … I have been directed to request you to immediately propose to P&ID, a further mediated review of a figure below$500 million and in line with our discussion you may wish to propose$400 million . 3. In addition, P&ID is to also provide a realistic payment schedule in view of the fact that this Administration is winding down and the incoming Government will require ample time to consider the matter.”
“ …to the effect that the Ministry entered into the [GSPA] with [P&ID] on the mistaken belief that gas was available”
“This line of defence, as feeble as it will appear, was adopted in the absence of a better line of defence”
“Without prejudice to legal arguments, one of my concerns on this matter is that Process & Industrial Developments (P&ID) Ltd is just one of the companies with such liabilities; former Minister Lukman signed Agreement with two Investors while the current Minister has signed with six Investors. In Nigeria, an extremely good initiative has been undermined by un-intended circumstances - making wet gas available for power generation has become a sore vexed matter as production is constantly compromised and thwarted by vandalization. Despite the huge resources at Egbin, Afam, etc Power Plants; domestic power generation is at the mercy of uninterrupted supply of gas which cannot be guaranteed.”
“[Nigeria] does not admit and challenges the following factual assertions: 1. [P&ID] became aware in 2008 that the Nigerian Government had initiated the building of a pipeline from [field] OML 123 to Calabar (the Adanga Pipeline) (paragraph 50-57 of the Witness Statement of Michael Quinn (MQ). 2. The Lagos area was initially regarded by [P&ID] as an attractive location for the project and [P&ID] had envisaged that it might build the Gas Processing Facilities in the Lagos area (paragraph 44-50 of MQ’s Witness Statement). 3. The GSPA was entered into for the purpose of taking Wet Gas free of charge from [Nigeria]/the delivery of Wet Gas by [Nigeria] to [P&ID] (paragraph 65, 67 & 101 of MQ’s Witness Statement). 4. The [Nigeria] Government had access to unlimited supplies of Natural gas in the vicinity of Calabar (paragraph 103 of MQ’s Witness Statement). See paragraph 3 of Ikechunwkwu [sic] Oguine’s Witness Statement. 5. Phase 1 was planned to take two years to implement after the grant of necessary approvals by the [Nigeria] Government (paragraphs 66 of MQ’s Witness Statement). 6. [Nigeria] was obliged to deliver the wet gas free of charge to [P&ID’s] project site (alleged in paragraph 65, 66 & 67 of MQ’s Witness Statement. [Nigeria] reserves all rights.”
“repeated requests for adjournments on account of the paucity of information from the ministry and our inability to obtain responses to various requests for documents and facts”
“The circumstances in which [P&ID] came into contact with Government of Nigeria are set out in the Witness Statement of Mr Michael Quinn …”, referring to paragraphs 53-101. He also wrote that P&ID: “relie[d] on the fact that, as late as mid-2012, the precise nature and location of the Gas Processing Facilities which [P&ID] would have to construct had not been finally determined.”
“E. THE FINDINGS ON LIABILITY 29. Before considering the quantification of the Government's liability, it is necessary to be clear about the findings made by the Tribunal in its second Partial Final Award [the Award on Liability]. The evidence for P&ID at that stage consisted of a statement by Mr Michael Quinn dated10 February 2014 , the then chairman of P&ID, who died before the hearing on1 June 2015 . He gave account of what had happened after the signature of the GSPA: [The Tribunal then set out substantially the whole of paragraphs 102, 103, 109 and 110 of Mr Michael Quinn’s witness statement: these have been set out earlier in this judgment, at [234]]. 30. The Government did not thereafter do anything to comply with its obligation under Article 6 b) of the GSPA to – "ensure that all necessary pipelines and associated infrastructures are installed and all requisite arrangements with agencies and/or third party are in place to ensure that supply and delivery of Wet Gas in accordance with Article 3 so as to facilitate the timely implementation of gas processing by the GPFs as provided for in this Agreement." 31. The Government's obligation under Article 3c. was to make available 400 MMSCuFD Wet Gas at the P&ID Calabar site boundary. By Appendix A it undertook to deliver a continuous supply of 150 MMSCuFD by the last quarter of 2011 and the remaining 250 MMSCuFD by the third quarter of 2012. 32. There followed discussions about the implementation of the Government's obligations but nothing came of them. The Government has never performed any of its obligations under Article 6 b). A compromise solution involving a possible variation of the GSPA was discussed but these negotiations were broken off in August 2012. P&ID served a Request for Arbitration but did not at that stage terminate the P&ID. On20 March 2013 P&ID wrote to the Government saying that it treated the Government's continued failure to perform its obligations as a repudiation of the GSPA and accepted it as such. 33. By Procedural Order No 9 dated6 May 2015 the Tribunal directed that the proceedings should be bifurcated and that there should first be a hearing on the question of liability and thereafter, if P&ID were successful, a hearing on damages. It directed the Government to serve "a statement of any primary facts alleged in the evidence of Mr Michael Quinn which are challenged and any other facts alleged to be relevant to the question of liability." 34. On12 May 2015 the Government served a statement of the facts in Mr Quinn's statement which it challenged. None of them were the facts recited in paragraph 29 above [i.e. those at paragraphs 102, 103, 109 and 110 of Mr Michael Quinn’s witness statement]. P&ID elected not to put in any further evidence and not to rely upon any of the challenged matters so far as they were denials of facts. 35. In its Part Final Award dated17 July 2015 [the Award on Liability] the Tribunal dealt with a number of defences raised on the part of the Government which are not now relevant. However, a good deal of attention was given in submissions to the fact that P&ID had not actually acquired ownership of the designated site or built any of the gas processing facilities. The written submissions of Mr Olapo Shasore, then counsel for the Government, submitted that the failure of P&ID to acquire the site and build the GPFs was a "fundamental breach" and that no gas could be delivered until this had been done. 36. The Tribunal's finding on this point was that the Government’s obligations under Article 6 b) were not conditional upon P&ID having constructed the GPFs: "It would have been commercially absurd for P&ID to go to the expense of building GPFs when the Government had done nothing to make arrangements for the supply of the Wet Gas." 37. Mr Shasore also advanced a modified version of this argument, saying that P&ID should at least have acquired a site so as to enable the Government to identify the "site boundary" to which the Wet Gas should be delivered. The Tribunal said that this took the matter no further than the first version of the argument: "Of course the Government could not actually deliver gas until there was a Site and, as we have said, until there was a plant to receive it. But that does not excuse the Government's failure to comply with 6 b). There is no suggestion that its failure to comply with these obligations was caused by uncertainty as to where the Site was going to be. It was assumed by everyone that it would be on the land allocated in Calabar." 38. After dismissing the other defences, the Tribunal found that the Government had repudiated its obligations under the GSPA and that P&ID had been entitled to accept the repudiation and claim damages for breach. F. REPUDIATION AND ITS CONSEQUENCES 39. The effect of the acceptance by one party of the other party's repudiation is that the primary obligations of both parties (on the one hand, to supply gas, on the other, to process it) are discharged and come to an end. But the contract "remains alive for the awarding of damages either for previous breaches or for the breach which constitutes the repudiation." Thus any obligations which P&ID had to buy the site, build the GPFs, etc. came to an end when the repudiation was accepted. There is no claim that either party committed any breach before the Government's repudiation. The present question therefore is only the damage suffered by P&ID by reason of the Government's refusal to perform the contract.”
“(d) Did the Government not have to do anything till the GPFs had been built? 63. Mr Shasore submits that the Government had no obligation to deliver gas until there was a plant to receive it. That, no doubt, is true, but the Government’s obligations were not confined to the delivery of gas. By Article 6b) it was also obliged to – “ensure that all necessary pipelines and associated infrastructures are installed and all requisite arrangements with agencies and/or third party are in place to ensure the supply and delivery of Wet Gas in accordance with Article 3 so as to facilitate the timely implementation of gas processing by the GPFs as provided for in this Agreement.” 64. There is nothing in the GSPA to suggest that these obligations were conditional upon the completion by P&ID of the construction of the GPFs. It would have been commercially absurd for P&ID to go to the expense of building GPFs when the Government had done nothing to make arrangements for the supply of the Wet Gas. 65. In his oral argument and written Final Submission, Mr Shasore put forward a modified version of this argument. Article 3(c) said that the Government was to deliver the gas at “the Site Boundary”
“It would have been commercially absurd for P&ID to go to the expense of building GPFs when the Government had done nothing to make arrangements for the supply of the Wet Gas.”
“There is nothing in the GSPA to suggest that these obligations [a reference to Nigeria’s obligations under Article 6b), not, I think, Article 6a)] were conditional upon the completion by P&ID of the construction of the GPFs”
"Of course the Government could not actually deliver gas until there was a Site and, as we have said, until there was a plant to receive it”. (3) On what it had been told, the Tribunal found itself expressing the view that: "[i]t would have been commercially absurd for P&ID to go to the expense of building GPFs when the Government had done nothing to make arrangements for the supply of the Wet Gas."
“The tribunal also failed to consider [Nigeria’s] submission that no land till date has been allocated to [P&ID] and the fact that Wet Gas or the pipeline for the supply of the Wet Gas cannot be installed or supplied to bare land, particularly when such land has not been allocated and when gas Processing facilities have not yet been constructed.”
“Straight accountancy re net present value of capital sum that they claim, and other figure work, interest rates, currency movements, etc etc. Oil/gas market evidence (downstream) which will go to loss of profit alleged, which flows into past and future income streams, markets (past and future), likely destination of cargoes, shipping costs, competitive sources of product etc., etc - hopefully to show that the venture was not going to make very much money. (That said, it may have been such a sweet heart deal that they would have made a profit anyway - but let's see). Oil/gas production evidence (upstream): capital and running costs of the plant, of 70k pipeline - and how MPR could have increased those (perhaps) by sourcing the gas from awkward and distant points. Their whole case is a loss of a chance case, and such cases can be pulled apart, if good experts are involved. As part of the process, we may well need fuller disclosure from claimant of their plans and costings.”
“Investigation into P&IDs background and finances Given the offshore structure of P&ID, its apparently small size and lack of significant track record, I would strongly recommend the Ministry to appoint a credible investigations company to carry out investigations into P&IDs history, its financial capabilities and general track record. This may assist the Ministry in the damages stage either directly or indirectly. …”
“ensure vigilant effective and supportive inter-ministerial co-ordination of this defence…as opposed to the present regime of multiple departments and allocation of responsibilities”
“2. The question of the seat of arbitration was first raised by the Government in its originating motion in the High Court in Lagos on24 February 2016 . It was contested by P&ID and the parties made their submissions to the Tribunal in letters or e-mails dated8 March 2016 and11 March 2016 (P&ID) and 11 and13 March 2016 (the Government). P&ID, before the injunction granted by the Nigerian court, requested that the Tribunal give a ruling on the matter. The Tribunal considers that it must therefore consider the question of the seat of arbitration for the purpose of deciding the future conduct of the arbitration. The Tribunal has the power to determine its own jurisdiction (section 12 of the Nigerian Arbitration Act) and its opinion on the disputed question may also be of assistance to the Nigerian court.”
“Investigation File Extracts: Interim Investigation of capacity of [P&ID] in respect of contract with the Ministry of Petroleum Resources for the conversion of wet gas to lead gas for electricity supply”
“3.8 That the process of the award of the contract was significantly hinged on the report of the technical committee of the Ministry of Petroleum resources, who after detailed analysis of P&ID and 8 other companies, certified their competence and capacity for the underlying contract and the Definitive Agreement. 3.9 That the process of award had the certification and recommendation of the legal unit of the Ministry and that the agreement was signed by the Legal Adviser, Grace Taiga, as a witness to the MoU and the Definitive Agreement.”
“Conclusion and Recommendations of Interim Investigations: (1)P&ID identified OML 123 and OML 67 operated by Addax and Exxon Mobile under production sharing contracts signed with NNPC as capable of producing the required volume of gas for the project. However, NNPC, Addax and Exxon Mobile were not parties to the Definitive Agreement. (2)P&ID is not entirely blameless in this matter as there are key gaps noticed in the transaction for which it may be necessary to go beyond their capacity. (3)It is definite that the award of the contract by the Ministry of Petroleum was a function of the recommendation of the technical committee of the Ministry. While the committee had experts, which should know better, the findings of gaps in the reasons for default by parties might require a further investigation. (4)The Arbitral panel that adjudicated the matter relied on documents and at face value, it acted in accordance with the law. To investigate the panel might not be expedient for the difficulties of jurisdiction and would prejudice a judicial process. (5)The team would need to and recommends a further detailed investigation of the circumstances surrounding the award of the contract and the key parties to the transaction.”
“CHIEF AYORINDE: My Lord, if I may start from where my learned friend Mr Andrew stopped and which elicited quite a substantial conversation with the members of the parrel, my Lord, the position of the respondent is that there is no evidence at all of a final investment decision. … THE CHAIRMAN: What do you mean by "a final investment decision''? CHIEF AYORINDE: My Lord, that something would have been done outside the signing of the agreement to show that the claimant expects to make profit, expects to – THE CHAIRMAN: What do you have in mind? CHIEF AYORINDE: For example, my Lord, there was quite some conversation about building a plant. Your Lordship did contribute by saying, "Oh, they have taken away the cost of building the plant and it may not be necessary to have a white elephant project sitting down somewhere where there is no gas to come in". THE CHAIRMAN: Yes. CHIEF AYORINDE: My Lord, I think it goes beyond that. There is simply no evidence of acquisition of the land. THE CHAIRMAN: No. CHIEF AYORINDE: Not at all. In fact, what your Lordship has before your Lordship is evidence that the government, another agency of government, actually offered land. THE CHAIRMAN: Correct. CHIEF AYORINDE: That is to be found at page 159 of volume 2. THE CHAIRMAN: I remember. A site was found – CHIEF AYORINDE: Yes, a site was found. THE CHAIRMAN: - and they designated it, but they didn't acquire the land. CHIEF AYORINDE: Yes, my Lord. The claimant was asked to come and pay 21 million naira to acquire the land. That 21 million naira was never paid, and we now have a claim for 6 billion. My Lord, apart from the land - so the plant is even far away. No evidence of engineering drawings in preparation for building a plant. THE CHAIRMAN: No. CHIEF AYORINDE: My Lord, there is no evidence of offtake agreements for the products that you will have from the plant. They are not showing to this panel some company in Bolivia, in Brazil, in England, willing to take their products. So, the only thing they have – ”
“THE CHAIRMAN: Let's consider the case on the assumption that, on the day after the contract was signed, you wrote them a letter saying, "We repudiate this contract" and at that stage they hadn't done anything, nothing. What would be the position then? CHIEF AYOR1NDE: My Lord, the position is no different from the position that occurred on the day the claimant considered the contract as repudiated, because even as at that date, my Lord, nothing had been done, and our position would be the same. THE CHAIRMAN: That's what I mean. CHIEF AYORINDE: Thank you. my Lord. My Lord, the GSPA provides for a joint operating committee between the parties. There is no evidence of decisions taken. The committee never took off. THE CHAIRMAN: No.”
“THE CHAIRMAN: As a matter of law, Mr Ayorinde, is there any authority for saying that if one party is willing to perform the contract but hasn't actually done anything, and the other party repudiates the contract, it is a condition of the other [sic] party to obtain any damages, any compensation, that he should have spent some money or done anything? Is there any authority for saying that that is a condition? CHIEF AYORINDE: My Lord, between the parties, the locus classicus is Hadley v Baxendale, between the parties, that is the authority that all other cases are premised upon. THE CHAIRMAN: I don't think that case actually answers the question put to you.”
“the Claimant is entitled to be placed, so far as money can do it, in the same position as he would have been in had the contract been performed.”
“CHIEF AYORINDE: Yes, my Lord. Paragraph 18(1) states the law under the ambit of the locus classicus, the Hadley v Baxendale case. However, my Lord, that case also says that it is what is in the contemplation of the parties. Therefore, my Lord, at the time of the breach — in Hadley v Baxendale my Lord, and your Lordship has that in your Lordship's bosom, the facts and what happened in that case — THE CHAIRMAN: It must have been in the contemplation of the parties that if you didn't give them any gas, they wouldn't be able to make any NGLs. CHIEF AYORINDE: Yes, my Lord. My Lord, at that point if we didn't give them any gas, they had nothing to receive the gas in order to make the profit in the billions. THE CHAIRMAN: That's correct. CHIEF AYORINDE: That's correct, my Lord. I’m with your Lordship. In the liability hearing, your Lordships were right, very right, to say, "Oh, you are in breach", fine. But with regards to quantum of damages hearing, your Lordship must now consider, as at the time of that breach for which we are liable, were they in contemplation, were they ready with - had they done things to be able to make the kind of profit and claim the damages they are now claiming? My Lord, the answer is no, from our side. THE CHAIRMAN: Yes.”
“CHIEF AYORINDE: My Lord, the claimant’s submissions this morning have been largely based on a review of the experts’ reports from both sides. Respectfully, I take a different view, and that is to say that the claimant has woefully failed to clear the first and important hurdle, that it was in the position to make a profit as at the time of the breach. The review of the experts' reports, my Lord, is based on the assumption that the event had happened to entitle the claimant to have damages naturally flowing from the event of the breach, which is after the signing of the GSPA. The question is, has anything happened after that to entitle the claimant to expect such huge amounts in profit? My Lord, at this point, going back to the GSPA, and this is without prejudice to - we cannot even refer to the liability hearing, that is done. The claimant was not even in the position to make any revenue, not to talk of profit, and that was part of my earlier submission with regards to the first step, acquisition of land, not to mention the building of the plant and other things. My learned friend referred to the warranty in the agreement as to obligations of the government and all that. My Lord – THE CHAIRMAN: Can you tell us, what would have prevented them from acquiring the land and building the plant? CHIEF AYORINDE: Absolutely nothing, my Lord. In fact – THE CHAIRMAN: That's what they say. CHIEF AYORINDE: They were offered the land. The only evidence before your Lordship – THE CHAIRMAN: You said there is no evidence that they were in a position to make the profits. CHIEF AYORINDE: Yes, my Lord. THE CHAIRMAN: What would have prevented them from making the profits? CHIEF AYORINDE: My Lord, if they had come before your Lordship and showed your Lordship evidence of acquisition of the land, then they are on the way, they are free to go.— THE CHAIRMAN: Yes. I see. CHIEF AYORINDE: That's the point, my Lord. THE CHAIRMAN: This is the same as your first point, then? CHIEF AYORINDE: Yes, my Lord. I have referred to the effort by the government to give them the land, an effort which they rejected or which they did not countenance. That is the only evidence before your Lordship. … CHIEF AYORINDE: … Article 22, my Lord. My Lord, it says: "Each party represents and warrants that it has the right and authority to enter into this agreement and to perform and observe all of its obligations under this agreement." "Each party". My Lord, your Lordship has found on liability. On quantum of damages, your Lordship, with respect, ought to ask the claimant, "Your responsibilities under this agreement, which one did you meet?”
“CHIEF AYORINDE: My Lord, if I may refer your Lordship to - I think Sir Anthony also asked the question about tax. My Lord, the issue of tax is regulated by law. Tax is not by agreement. If the government says you pay tax, you pay tax. There is no evidence before your Lordships that the claimant applied for pioneer status in order to be entitled to tax-free years. There is absolutely no evidence. I do not want to be accused of going back to that point, which is they did nothing. They did not even apply for tax status.”
“CHIEF AYORINDE: My Lord, at this point, I wish to just round up my submissions, except if your Lordship wishes to direct any questions of me. My Lord, I just wish to round up and to say that your distinguished panel should decide whether it is reasonable, whether it is just or equitable, for the claimant - having considered all the evidence before this panel, whether the claimant should be entitled to such a colossal sum of money. Yes, I concede that it is a commercial transaction, but, again, we cannot take out the fact that the government is involved, and that money will have to be paid from taxpayers' money. So at this point, for doing next to nothing, if I may say that, can the claimant be entitled to$6 billion ? From my position here, it would be extremely unfair. Thank you.”
“CHIEF AYORINDE: Your Lordship will see that our position has mainly been to rely on law when it concerns damages, and we have not made heavy weather of the reports, because we believe that the reports come after there has been a decision that the claimant is entitled to damages other than nominal damages. My Lord, your question brings me to -if I may I refer your Lordship to the author Chitty On Contracts. The 29th edition is the quote I have here, volume 1 at page 1402, paragraphs 24 to 52. … It says clearly that, upon discharge, the primary obligation of the party in default is to perform any of the promises made by him, and the remaining unperformed come to an end as this right or obligation to perform them stops to exist. My Lord, the next step is the secondary obligation to pay the other party. THE CHAIRMAN: That's right. CHIEF AYORINDE: It only pays the other party a sum of money to compensate him for the loss he has sustained as a result of the failure to perform. My Lord, in answer to your Lordship’s question, from the signing of the contract until the repudiation is accepted by the injured party, your Lordship will determine, using quantum meruit, what the injured party is due to be paid. At that point, the injured party upon acceptance also is not under any obligation to incur any further losses, 'That is where the law of [mitigation] kicks in. Therefore, my Lord, I answer your Lordship in that, yes maybe between the execution and the repudiation there is a period of about three years and it is limited to that, not 20 years. Maybe that is where 17 years goes away.”
“THE CHAIRMAN: I have to admit, I have some difficulty in following that. You made reference to mitigation. What do you say they should have done about mitigation? CHIEF AYORINDE: Yes, my Lord. They have a problem in mitigation because they haven't done anything. THE CHAIRMAN: What do you say they ought to have done? CHIEF AYORINDE: My Lord, if they had acquired land and suddenly they see that the other contracting party is not going to go ahead — THE CHAIRMAN: How would that have mitigated their loss? CHIEF AYORINDE: They could have sold the land. They could have said, "This is not going on any further. We are not just going to wait here". THE CHAIRMAN: That would have been a zero sum transaction. If they had bought the land and sold it. CHIEF AYORINDE: My Lord, if they had bought the land and three years down the line they see that nothing is going to happen, at that point they have an obligation not just to keep the land within there and say, "Oh, one day, after 20 years, we are going to get paid". THE CHAIRMAN: Okay. Thank you.”
“… if the evidence had showed that for some reason, even if the Government was ready and willing to perform the contract, P&ID would never have been able to acquire the site or build the plant, then it would not be able to recover more than nominal damages.”
“In some cases the fact that a party had not done anything by way of performance of the contract for three years, as in the present case, might be evidence that it was unable or did not intend to do so.”
“In fact, the evidence shows a high degree of likelihood that if the Government had been willing to perform, P&ID would have acquired the site and built the plant”
“the prospective profits were such as to create a substantial financial incentive to go ahead. Mr Quinn estimated that the project would produce a profit of$5 to$6 billion for P&ID over a 20 year period.”
“If the contract had been performed, P&ID would have received for 20 years an income from the sale of natural gas liquids extracted from the wet gas supplied by the Government. As against that income, it would have had to finance the necessary capital expenditure to acquire the site and construct the gas processing facilities ("CAPEX") and incur revenue expenditure in operating the plant (“OPEX”). The loss is therefore the value of the stream of net profit which P&ID would have made if the Government had performed the contract according to its terms. As the damages have to be assessed once and for all, it is necessary to estimate the value of that stream of profit at the time of the breach, making an appropriate discount for the fact that P&ID will be awarded immediate payment in place of sums which would actually have been received over a 20 year period. The Tribunal will in due course consider whether the valuation at the date of breach may take into account what is known to have happened since that date.”
“In his closing submissions, Chief Ayorinde said that, as a matter of Nigerian law, a “feasibility study" should not be the basis for an award of damages and that Mr Wolf, in his reliance upon the pre-contractual work of P&ID, was presenting the Tribunal with a "feasibility study””
“Mr Dare, in oral evidence after Mr Wolf had concluded his testimony, produced a number of points which had not previously mentioned in the Upstream report or otherwise: performance would be “sub-optimal" on account of having to employ Nigerian personnel, precautions would be needed to protect the condensate before export, stolen condensate could cause pollution and the government “will come after you". The claimants had no opportunity to comment on any of these matters.”
“An estimation of future income requires a calculation of (a) the yield of NGLs which the plant would have recovered from the incoming gas and (b) the prices at which they could have been sold. The resulting figure must then be discounted to allow for the award being for an immediate lump sum rather than income spread over 20 years.”
“Even assuming that the GSPA was about exporting oil, a 50% reduction in operating time would have been a remarkable figure. The Upstream report offers no actual evidence of (1) the incidence of militant attacks in the Calabar region and its effect on oil production (2) if the attacks were against oil pipelines, how this would affect the production of associated gas at the wells (3) whether there had been any interference with gas pipelines”
“In any case, the Upstream calculation is based upon a misapprehension, evident throughout the report and the submissions on behalf of the Government, about the nature of the calculation which the Tribunal has to make. It fails to appreciate that the calculation must be made on the assumption that the Government will perform its obligations under the contract. Except so far as the Government would be entitled to plead force majeure (as to which no argument was presented to the Tribunal) it must be assumed to have delivered the necessary quantities of Wet Gas to P&ID's site and taken the Lean Gas for its power stations. If militancy makes it difficult to obtain the gas from one field, it must find the gas somewhere else.”
“91. The price of NGLs is closely linked to the price of oil which is, like that of most commodities, cyclical - sometimes dramatically so. It is not easy to predict the future movement of prices. But such predictions have to be made, because investment decisions depend upon them. Likewise, they have to be made by the Tribunal to determine the loss which has been caused to P&ID by the repudiation of the contract.”
“First, he assumed that they would be sold f.o.b. Nigeria into the north west European market. So he took into account the cost of shipping the liquids to Europe. Secondly, he assumed that NGL prices would closely follow oil prices.”
“He was not cross-examined on this estimate, save to secure the admission that forecasting oil prices 20 years ahead was difficult.”
“However, when Mr Dare gave oral evidence, he said that there were several forecasts available on web sites which were different from the New Policies scenario. He did not however identify these or produce them to the Tribunal. The Tribunal did not have the benefit of Mr Ede’s comments because none of this material (if such it was) had been put to him in cross-examination.”
“the exercise which the Tribunal has to undertake. It is to make the best estimate which would be made today of the income stream which P&ID would have received from the sale of NGLs if the Government had performed its side of the bargain.”
“The only estimates of what might happen to oil prices that the Tribunal has actually seen are those in the IEA report relied upon by Mr Ede.”
“101. Mr Ede is an economist who has for 15 years specialized in energy markets. His evidence is that IEA’s New Policies scenario is the one most appropriate to be used in forecasting. None of this was challenged in cross-examination. 102. By contrast, Mr Dare has said only that there are other forecasters in the business who have arrived at different hut unspecified conclusions. No such forecasts were actually made available to the Tribunal, still less to Mr Ede. 103. The Tribunal considers that there is no material upon which it can come to a conclusion different from that of Mr Ede's second estimate, which gave effect to all the information presently available about the movement of oil prices. Accordingly, it accepts the forecasts of prices (in real 2013$ terms) in the second BRG Report”
“105. The Upstream Report contains no explanation of why it (a) ignored the 5 years Pioneer Status granted by the GSPA and (b) reduced the standard rate of tax to 20%. In the circumstances the Tribunal will accept the BRG calculation, which in fact results in a lower award of damages than the Upstream calculation.”
“… for the reasons given by the Government, 7% is the correct rate of interest to apply to the Government's obligation to pay damages which crystallised at the date of repudiation. It is not a risk free rate but reflects what P&ID would have had to pay to borrow the money or could have earned by investment in Nigeria.”
“Of course in the valuation of a business, estimated future earnings may also be discounted to reflect the risk that they will not materialise. The Government submits that such a discount should also be applied to the estimate of future profits in this case, to reflect the risk of investing in Nigeria. For this purpose, as well as the time value of money, Upstream proposes a discount rate of 7%.”
“On the other hand, for the reasons given by the Government, 7% is the correct rate of interest to apply to the Government's obligation to pay damages which crystallised at the date of repudiation. It is not a risk free rate but reflects what P&ID would have had to pay to borrow the money or could have earned by investment in Nigeria.”
“109. The Government submits that only three years loss of income should be taken into account because by that time P&ID should have found some other profitable investment and thereby mitigated its loss. There is no suggestion of what this other investment would have been. Nor is there any explanation of why, if found, this would have mitigated the loss caused by repudiation of the GSPA. Even if P&ID could have found some other unspecified investment opportunity, there is no reason why this should be treated as mitigation of its loss. An employee who is dismissed can mitigate his loss by finding another full time job. But there is no reason why P&ID should not have pursued more than one investment opportunity. The burden of proving that loss could have been mitigated is upon the party who has broken its contract: see Roper v Johnson {1873) LR 8 CP 167; Geest plc v. Lansiquot[2002] 1 WLR 3111 (Privy Council). The Government has not suggested, let alone proved, what the Claimant might have done to earn the equivalent profit. This is not surprising because the law does not require the innocent party to take risks in an endeavour to save the party in breach from having to pay damages: Banco de Portugal v Waterlow & Sons Ltd[1932] AC 452 at 506 (Lord Macmillan). For all these reasons, the Tribunal considers that in this context the argument as to mitigation is misplaced.”
“[t]he proper inference is that Mr Smyth, if truthful, would have confirmed that bribery and illegality was the modus operandi of those behind P&ID, including that bribes were paid to Mrs Grace Taiga in connection with the entry of the GSPA”
“In a particularly extraordinary episode in late 2014 and early 2015, Mr Adebayo persuaded Ms Adelore, Mr Oguine and Mr Shasore to lobby their superiors relentlessly for a settlement of US$1.1 billion . This figure was concocted without any serious attempt to value P&ID’s claim. Both Mr Cahill and Mr Andrew said in cross-examination that it was inconceivable that a settlement at that level could have been achieved, certainly before any finding on liability, yet Mr Adebayo almost managed it, with Ms Adelore, Mr Shasore and Mr Oguine recommending (in privileged advice improperly shared immediately in draft with P&ID on28 November 2014 ) that [Nigeria] pay that sum. They were stymied only by the President refusing to sign-off on the proposed settlement in late May 2015. It is no coincidence that huge amounts of cash were withdrawn by Mr Adebayo, and deposited by Ms Adelore and Mr Shasore, over the same period.”
“[1.] The circumstances in which the GSPA came to be signed, including what the responsibilities of Mrs Grace Taiga and Mr Tijani were, and whether the process that was followed was any different from the process for concluding any other Nigerian contract, and in particular any of the other [Accelerated Gas Development Project] contracts which were concluded at around the same time.” “[2.] [Nigeria]’s … inept handling of the arbitration, and in particular the reasons why it failed to mount the arguments which it now says would have won it the case, despite the urging of its internal and external advisers. “[5.] [Nigeria]’s failure, over a period of several years, to carry out any investigation into the bribery allegations they eventually advanced in December 2019; and in particular Mr Malami’s complete failure to act on the EFCC’s advice in 2016 to carry out a “detailed investigation into the circumstances surrounding the award of the contract” to P&ID.”
“[7.] The shameful persecution of three of P&ID’s witnesses – all highly vulnerable individuals – in an attempt to generate false evidence to support [Nigeria]’s case (referred to at trial only in passing and facetiously: “poor Grace has been bashed up”). “[8.] [Nigeria]’s especially depraved treatment of Mr Kuchazi, in denying him access to cancer treatment and forcing him to stand trial, even though [Nigeria]’s own counsel submitted within minutes of his cross-examination starting that he was “obviously unwell” and incapable of understanding the process. [although later the suggestion by Nigeria was that Mr Kuchazi was only pretending not to understand the questions put to him]. The offences with which he is charged are ridiculously technical, do not involve any allegations of bribery or corruption or anything relating to P&ID, and are obviously trumped-up …” (original emphasis). “[13.] The steps taken by [Nigeria] (no doubt also on Mr Malami’s initiative) to cause criminal proceedings to be instituted against Mr Cahill in Ireland, in order to harass and intimidate him.”
“[14.] [Nigeria]’s deliberate suppression of documents which exposed its case as false and dishonest, and its broader failure to collect and disclose relevant documents, including any electronic documents from huge swathes of [Ministry] officials.”
“Challenging the award: serious irregularity. (1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3). (2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant— … (g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy.”
“The s. 68 jurisdiction is structured and circumscribed and, for sound reasons of policy, requires a close focus on the parties’ conduct in the arbitration and the process by which the award was obtained.”
“Fraud (that is dishonest, reprehensible or unconscionable conduct) must be distinctly pleaded and proved, to the heightened burden of proof as discussed in Hornal v Neuberger Products Ltd[1954] 1 QB 247 and Re H (Minors)[1996] AC 563 . This was emphasised by Rix LJ in The Kriti Palm, at paragraphs 256-259 …”
“Considerations of public policy can never be exhaustively defined, but they should be approached with extreme caution … It has to be shown that there is some illegality or that the enforcement of the award would be clearly injurious to the public good or, possibly, that enforcement would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the powers of the state are exercised.”
“… there is no blanket rule that it will never be contrary to English public policy to enforce an award arising out of a contract procured by bribes. … The question of whether enforcement of a particular award would offend public policy is, by its nature, one which will depend on the facts of each case.”
“Bribes that P&ID allegedly paid to procure the GSPA are a very long way from the Awards: a huge number of contingencies had to be satisfied, including Nigeria’s failure to perform, P&ID’s acceptance of that repudiatory breach, and then the entirety of the arbitral process leading to P&ID successfully obtaining the Awards. To find that pre-GSPA payments from (say) 2009 were the reason why P&ID obtained the Final Award dated 2017 is to give no real meaning to the causal link in the phrase “obtained by fraud””
“substantial injustice”
“30. As was explained in the 1996 Report on the Arbitration Bill (which became the 1996 Act) of the Departmental Advisory Committee on Arbitration Law (“the DAC”), the test of serious irregularity was intended to limit intervention to “extreme” cases where it could be said that “the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”
“280. Irregularities stand on a different footing. Here we consider that it is appropriate, indeed essential, that these have to pass the test of causing ‘substantial injustice’ before the court can act. The court does not have a general supervisory jurisdiction over arbitrations. We have listed the specific cases where a challenge can be made under this Clause. The test of ‘substantial injustice’ is intended to be applied by way of support for the arbitral process, not by way of interference with that process. Thus it is only in those cases where it can be said that what has happened is so far removed from what could reasonably be expected of the arbitral process that we would expect the court to take action. The test is not what would have happened had the matter been litigated. To apply such a test would be to ignore the fact that the parties have agreed to arbitrate, not litigate. Having chosen arbitration, the parties cannot validly complain of substantial injustice unless what has happened simply cannot on any view be defended as an acceptable consequence of that choice. In short, Clause 68 is really designed as a long stop, only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected.” (Emphasis added)
“… nowhere in section 68 [90] is there any hint that a failure by the tribunal to arrive at the ‘correct decision’ could afford a ground for challenge.” 33. Even if a case is shown to fall within one or more of the kinds of irregularities listed in section 90 this will only amount to a serious irregularity if the court considers that it “has caused or will cause substantial injustice”
“… those who framed the bill contemplated that the courts’ intervention would be engaged not merely in those cases where some injustice has been caused to the applicant by the incidence of the serious irregularity but where the substance and nature of the injustice goes well beyond what could reasonably be expected as an ordinary incident of arbitration.” 34. There will be substantial injustice where it is established that, had the irregularity not occurred, the outcome of the arbitration might well have been different: see, for example, Vee Networks Ltd v Econet Wireless International Ltd[2004] EWHC 2909 (Comm) ; [2005] 1 All ER (Comm) 303 at para 90 (Colman J). It is not necessary to show that the outcome would “necessarily or even probably be different”: Cameroon Airlines v Transnet Ltd[2004] EWHC 1829 (Comm) ; [2006] TCLR 1, at para 102 (Langley J). As stated by Akenhead J in Raytheon at para 33(i): “(i) For the purposes of meeting the ‘substantial injustice’ test, an applicant need not show that it would have succeeded on the issue with which the tribunal failed to deal or that the tribunal would have reached a conclusion favourable to him; it [is] necessary only for him to show that (i) his position was ‘reasonably arguable’, and (ii) had the tribunal found in his favour, the tribunal might well have reached a different conclusion in its award …” 35. Some irregularities may be so serious that substantial justice is “inherently likely” or “likely in the very nature of things” to result. As Toulson J stated in Ascot Commodities NV v Olam International Ltd [2002] CLC 277 at pp 284F-285A: “Since the whole process of arbitration is intended as a way of determining points at issue, it is more likely to be a matter of serious irregularity if on a central matter a finding is made on a basis which does not reflect the case which the party complaining reasonably thought he was meeting, or a finding is ambiguous, or an important issue is not addressed, than if the complaints go simply to procedural matters. … It is inherently likely to be a source of serious injustice if irregularities occurred of the kind to which I have referred. Since the purpose of arbitration is to determine central issues between the parties, if there has been a flaw in that this has not been done, that is likely in the very nature of things to be a matter of serious injustice.” (Emphasis added)
"so material that its production [at trial] would probably have affected the result and (when the fraud consists of perjury) is so strong that it would reasonably be expected to be decisive at the re-hearing and if unanswered must have that result."
“[There] is no support in [RAV] for the suggestion that in a section 68 application a finding of apparent bias in an arbitration tribunal will lead as a matter of course to a finding of substantial injustice. Rather, as we have seen, the effect of the Privy Council advice is that a case within section 68(2)(a) will not constitute a serious irregularity unless the court considers that it has caused substantial injustice, although the nature of the irregularity may be such that the inference of substantial injustice almost goes without saying. Moreover, there will be no substantial injustice if it can be shown that the outcome of the arbitration would have been the same regardless of the irregularity.”
“(1) If a party to arbitral proceedings takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection … (a) that the tribunal lacks substantive jurisdiction … or (d) that there has been any other irregularity affecting the tribunal or proceedings … he may not raise that objection later, before the tribunal or the court, unless he shows, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection.”
“The effect of this section is that a party to an arbitration must act promptly if he considers that there are grounds on which he could challenge the effectiveness of the proceedings. If he fails to do so and continues to take part in the proceedings, he will be precluded from making a challenge at a later date. Moreover, it is clear from the language of sub-s. (1) itself that it is unnecessary for an applicant to have had actual knowledge of the grounds of objection in order for him to lose his right to challenge the award. If the respondent can show that the applicant took part or continued to take part in the proceedings without objection after the grounds of objection had arisen, the burden passes to the applicant to show that he did not know, and could not with reasonable diligence have discovered, those grounds at the time. It may often be necessary, therefore, to consider the applicant's conduct of the proceedings against the background of his developing state of knowledge.”
“… as a matter of law, it is not open to a fraudster who has obtained a judgment by fraud, including through perjured evidence, to profit from it by contending that the innocent party has acted negligently in failing to uncover his fraud sooner”
"66. I would leave open the question whether the position as I have summarised it is any different where the fraud was raised in the earlier proceedings but unsuccessfully. My provisional view is that the position is the same, for the same reasons. If decisive new evidence is deployed to establish the fraud, an action to set aside the judgment will lie irrespective of whether it could reasonably have been deployed on the earlier occasion unless a deliberate decision was then taken not to investigate or rely on the material."
“183. If it had been necessary to decide the issue, it seems to me that Mr Howard has the best of the arguments. It is a fundamental principle of our law that, as Lord Bingham said in HIH Casualty and General Insurance Ltd v Chase Manhattan Bank[2003] UKHL 6 ,[2003] 2 Lloyd's Rep 61 - referring to what Rix LJ had said in the Court of Appeal - that fraud is a thing apart, it unravels all: [15]. There seems to be no reason why the finality of arbitration awards should be afforded greater importance than the finality of judgments in circumstances of fraud. The statutory bar in section 73 is limited to irregularities discoverable during the arbitration. Otherwise, the effect of section 81(1) of the [Arbitration] Act [1996] is to preserve the right to challenge the enforcement of an award on public policy grounds under the common law.
“It also reflects the practical basis of commercial intercourse. Once fraud is proved, "it vitiates judgments, contracts and all transactions whatsoever": Lazarus Estates Ltd v Beasley[1956] 1 QB 702 at 712, per Denning LJ. …”
“… there is no principled basis to distinguish between the test for extending time under s.80(5), which is a test of reasonable diligence, and the test under s.73, which is also a test of reasonable diligence. Takhar applies to both.”
“Where any provision of this Part requires an application or appeal to be made to the court within a specified time, the rules of court relating to the reckoning of periods, the extending or abridging of periods, and the consequences of not taking a step within the period prescribed by the rules, apply in relation to that requirement.”
“In this respect, the test is not whether Nigeria’s legal team could by any means have discovered P&ID’s dishonesty, but whether it should have done so”, the test does not involve the word “should” but the test also does not include the words “any means”
“… proceedings of this kind are abusive only where the point at issue and the evidence deployed in support of it not only could have been raised in the earlier proceedings but should have been: see Johnson v Gore-Wood & Co, at p 31 (Lord Bingham of Cornhill) and Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd, para 22 (Lord Sumption). As Lord Bingham observed in the former case, it is “wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.”
“Although some of the cases have spoken in terms of reasonable diligence only being required once the claimant is on notice that there is something to investigate (the “trigger”), it is more accurate to say that the requirement of reasonable diligence applies throughout”
“If the respondent can show that the applicant took part or continued to take part in the proceedings without objection after the grounds of objection had arisen, the burden passes to the applicant to show that he did not know, and could not with reasonable diligence have discovered, those grounds at the time”
“show[] at the time [it] took part or continued to take part in the proceedings, [it] did not know and could not with reasonable diligence have discovered the grounds for the objection.”
“… in August 2012, [Nigeria] was (on its own case) faced with a potential exposure of several billion dollars, under a “deeply suspicious oil and gas contract, signed by the wrong Minister, during a period of “endemic corruption in Nigeria, and most particularly in the oil and gas sector”, imposing an essentially unqualified obligation on [Nigeria] to supply gas to a BVI company which had no apparent assets, no industry experience, had carried out no work, had no engineering designs, had no finance, had no land, had misrepresented that sufficient gas for the project would be available, and might reasonably have been suspected of having “friends in government” who would do its bidding.”
“… what this means is that never mind during the arbitration, in August 2012 on its own case, eight points we know were alive. First, Nigeria was being sued for$6 billion . Second, by a BVI company, something that we are told any Nigerian Minister or official would know was in breach of Nigerian law. Third, with no apparent assets, experience or finance. Fourth, under a deeply suspicious contract, to use Mr Malami’s phrase. Five, signed by the wrong Minister. Six, at a time and in a sector when corruption was endemic. Seven, imposing an essentially unqualified obligation on Nigeria to supply gas. And eight, containing an “unorthodox”, according to Mr Malami, arbitration clause which breached Nigerian public policy.”
“(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may— (a) remit the award to the tribunal, in whole or in part, for reconsideration, (b) set the award aside in whole or in part, or (c) declare the award to be of no effect, in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.”
“to provide for the construction of Gas Processing Facilities by P&ID encompassing the provision of Wet Gas by the Government and the processing of the said Wet Gas by P&ID utilising two or more process streams with a total capacity of up to 400 MMSCuFD together with all utilities, support and maintenance facilities at the Site and the provision of Lean Gas by P&ID to the Government as set forth in this Agreement and its Appendices and to operate and maintain the facilities in an efficient manner.”
“Section 68 is not there to give you a remedy if you instruct an honest lawyer who makes a mess of it or doesn’t take an available point. That is just tough. You have made your arbitration bed and you lie on it”
“General principles The provisions of this Part are founded on the following principles, and shall be construed accordingly— (a). the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; (b). the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; (c). in matters governed by this Part the court should not intervene except as provided by this Part.”
“Enforcement of the award. (1). An award made by the tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect. (2). Where leave is so given, judgment may be entered in terms of the award. (3). Leave to enforce an award shall not be given where, or to the extent that, the person against whom it is sought to be enforced shows that the tribunal lacked substantive jurisdiction to make the award. The right to raise such an objection may have been lost (see section 73). (4). Nothing in this section affects the recognition or enforcement of an award under any other enactment or rule of law, in particular underPart II of the Arbitration Act 1950 (enforcement of awards under Geneva Convention) or the provisions of Part III of this Act relating to the recognition and enforcement of awards under the New York Convention or by an action on the award.”
“Challenging the award: substantive jurisdiction. (1). A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court— (a). challenging any award of the arbitral tribunal as to its substantive jurisdiction; or (b). for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3). (2). The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction. (3). On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order— (a). confirm the award, (b). vary the award, or (c). set aside the award in whole or in part. (4). The leave of the court is required for any appeal from a decision of the court under this section.”
“Challenging the award: serious irregularity. (1). A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3). (2). Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant— (a). failure by the tribunal to comply with section 33 (general duty of tribunal); (b). the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67); (c). failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties; (d). failure by the tribunal to deal with all the issues that were put to it; (e). any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers; (f). uncertainty or ambiguity as to the effect of the award; (g). the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy; (h). failure to comply with the requirements as to the form of the award; or (i). any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award. (3). If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may— (a). remit the award to the tribunal, in whole or in part, for reconsideration, (b). set the award aside in whole or in part, or (c). declare the award to be of no effect, in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration. (4). The leave of the court is required for any appeal from a decision of the court under this section.”
“Appeal on point of law (1). Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An agreement to dispense with reasons for the tribunal’s award shall be considered an agreement to exclude the court’s jurisdiction under this section. (2). An appeal shall not be brought under this section except— (a). with the agreement of all the other parties to the proceedings, or (b). with the leave of the court. The right to appeal is also subject to the restrictions in section 70(2) and (3). (3). Leave to appeal shall be given only if the court is satisfied— (a). that the determination of the question will substantially affect the rights of one or more of the parties, (b). that the question is one which the tribunal was asked to determine, (c). that, on the basis of the findings of fact in the award— (i). the decision of the tribunal on the question is obviously wrong, or (ii). the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and (d). that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question. (4). An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted. (5). The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required. (6). The leave of the court is required for any appeal from a decision of the court under this section to grant or refuse leave to appeal. (7). On an appeal under this section the court may by order— (a). confirm the award, (b). vary the award, (c). remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court’s determination, or (d). set aside the award in whole or in part. The court shall not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration. (8). The decision of the court on an appeal under this section shall be treated as a judgment of the court for the purposes of a further appeal. But no such appeal lies without the leave of the court which shall not be given unless the court considers that the question is one of general importance or is one which for some other special reason should be considered by the Court of Appeal. Section 70: “Challenge or appeal: supplementary provisions. (1). The following provisions apply to an application or appeal under section 67, 68 or 69. (2). An application or appeal may not be brought if the applicant or appellant has not first exhausted— (a). any available arbitral process of appeal or review, and (b). any available recourse under section 57 (correction of award or additional award). (3). Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process. (4). If on an application or appeal it appears to the court that the award— (a). does not contain the tribunal’s reasons, or (b). does not set out the tribunal’s reasons in sufficient detail to enable the court properly to consider the application or appeal, the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose. (5). Where the court makes an order under subsection (4), it may make such further order as it thinks fit with respect to any additional costs of the arbitration resulting from its order. (6). The court may order the applicant or appellant to provide security for the costs of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with. The power to order security for costs shall not be exercised on the ground that the applicant or appellant is— (a). an individual ordinarily resident outside the United Kingdom, or (b). a corporation or association incorporated or formed under the law of a country outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom. (7). The court may order that any money payable under the award shall be brought into court or otherwise secured pending the determination of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with. (8). The court may grant leave to appeal subject to conditions to the same or similar effect as an order under subsection (6) or (7). This does not affect the general discretion of the court to grant leave subject to conditions.”
“Loss of right to object (1). If a party to arbitral proceedings takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection— (a). that the tribunal lacks substantive jurisdiction, (b). that the proceedings have been improperly conducted, (c). that there has been a failure to comply with the arbitration agreement or with any provision of this Part, or (d). that there has been any other irregularity affecting the tribunal or the proceedings, he may not raise that objection later, before the tribunal or the court, unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection. (2). Where the arbitral tribunal rules that it has substantive jurisdiction and a party to arbitral proceedings who could have questioned that ruling— (a). by any available arbitral process of appeal or review, or (b). by challenging the award, does not do so, or does not do so within the time allowed by the arbitration agreement or any provision of this Part, he may not object later to the tribunal’s substantive jurisdiction on any ground which was the subject of that ruling. Section 80: “Notice and other requirements in connection with legal proceedings (1). References in this Part to an application, appeal or other step in relation to legal proceedings being taken “upon notice” to the other parties to the arbitral proceedings, or to the tribunal, are to such notice of the originating process as is required by rules of court and do not impose any separate requirement. (2). Rules of court shall be made— (a). requiring such notice to be given as indicated by any provision of this Part, and (b). as to the manner, form and content of any such notice. (3). Subject to any provision made by rules of court, a requirement to give notice to the tribunal of legal proceedings shall be construed— (a). if there is more than one arbitrator, as a requirement to give notice to each of them; and (b). if the tribunal is not fully constituted, as a requirement to give notice to any arbitrator who has been appointed. (4). References in this Part to making an application or appeal to the court within a specified period are to the issue within that period of the appropriate originating process in accordance with rules of court. (5). Where any provision of this Part requires an application or appeal to be made to the court within a specified time, the rules of court relating to the reckoning of periods, the extending or abridging of periods, and the consequences of not taking a step within the period prescribed by the rules, apply in relation to that requirement. (6). Provision may be made by rules of court amending the provisions of this Part— (a). with respect to the time within which any application or appeal to the court must be made, (b). so as to keep any provision made by this Part in relation to arbitral proceedings in step with the corresponding provision of rules of court applying in relation to proceedings in the court, or (c). so as to keep any provision made by this Part in relation to legal proceedings in step with the corresponding provision of rules of court applying generally in relation to proceedings in the court. (7). Nothing in this section affects the generality of the power to make rules of court.”
“Saving for certain matters governed by common law (1). Nothing in this Part shall be construed as excluding the operation of any rule of law consistent with the provisions of this Part, in particular, any rule of law as to— (a). matters which are not capable of settlement by arbitration; (b). the effect of an oral arbitration agreement; or (c). the refusal of recognition or enforcement of an arbitral award on grounds of public policy. (2). Nothing in this Act shall be construed as reviving any jurisdiction of the court to set aside or remit an award on the ground of errors of fact or law on the face of the award.”
“Refusal of recognition or enforcement (1). Recognition or enforcement of a New York Convention award shall not be refused except in the following cases. (2). Recognition or enforcement of the award may be refused if the person against whom it is invoked proves— (a). that a party to the arbitration agreement was (under the law applicable to him) under some incapacity; (b). that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made; (c). that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; (d). that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration (but see subsection (4)); (e). that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country in which the arbitration took place; (f). that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made. (3). Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award. (4). An award which contains decisions on matters not submitted to arbitration may be recognised or enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those on matters not so submitted. (5). Where an application for the setting aside or suspension of the award has been made to such a competent authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award. It may also on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security.”