News
P &ID Offers FG Olive Branch Over Contract Dispute
Nigeria stands to lose up to $9 billion worth of its foreign assets following an enforcement application to US and UK courts by Process and Industrial Development (P &ID), a British firm tied up in a legal dispute with the Federal Government.
The court case arose out of the failure of a contract awarded the company in 2010 to process wet gas to power Nigeria’s generating plants.
In January 2017, a London tribunal, organized under the rules of the Nigeria Arbitration and Conciliation Act, ordered Nigeria to pay P&ID $6 billion in damages, plus $2.3million in uncollected interest. That figure has since been attracting interest at the rate of $1.2 million per day, and currently stands at over $9 billion.
The next hearing on the case will come up in a London court on Tuesday, May 21, 2019.
Mr. Brendan Cahill, Founder, Process and Industrial Development (P &ID) said that the company looks forward to the UK and US courts granting enforcement rights that will allow P&ID to collect what is rightfully its.
If history is any guide – just look at how creditors seized Argentina’s naval frigate while docked in Ghana. Efforts by Nigeria to evade this judgment will inevitably fall flat. The ball is in Nigeria’s court, if the government is prepared to find a good-faith solution”, he said.
Cahill however indicated that the company was open to negotiations with the Nigerian government to settle the dispute out of court
He said: “P&ID remains open to a settlement on a reasonable basis, but we need a willing partner in government to help resolve this matter. The onus is on the Nigerian government to act in good faith to find a solution”.
After the P&ID’s Gas Supply and Processing Agreement with the Federal Government failed, the company initiated arbitration proceedings in London, in line with the original contractual agreement between the parties.
Cahill said the company decided to go to court after several attempts at salvaging the deal were botched. He said: “P&ID’s Gas Supply and Processing Agreement (GSPA) failed when the government did not uphold its commitments. In August 2012, after several attempts over two and half years by P&ID to salvage the agreement, including offers to renegotiate the deal, the company initiated arbitration proceedings”.
Cahill is sadden by the failure of such a promising project and government’s lack of interest in trying to resolve the dispute amicably, adding that original project would have brought power and economic growth to Nigeria by supplying free natural gas for electricity generation, as well as building a highly successful commercial venture with a share of profits going to the Nigerian government.
“The P&ID project would have supplied 2,000 megawatts of electricity in a country where tens of millions do not have access to electricity. The award judgment was handed down by the independent arbitration panel because it represented the loss of profits for P&ID over the 20 years of the project”, he explained.
In late February this year, the Office of the Attorney-General of Nigeria (AGF) issued a statement contesting the huge amount the court awarded P & ID as damages, largely on the grounds that the project did not actually kick off the ground.
But Cahill reacted to the statement, explaining that the company had already put in years of planning, field work, design and on-the-ground preparation.
He stated: “We spent two and a half years offering solutions, while the government consistently failed to deliver its side of the contract. This is a tragic ending to a venture that would have delivered low-cost electrical energy to hundreds of thousands of households throughout Nigeria, and would have brought vital revenue to the Nigerian treasury”.
Cahill and his late partner, Michael Quinn, had over 30 years’ prior experience of executing successful engineering projects in Nigeria before the failed P&ID project that is now in dispute.
Ogba Ogbaga, an Abuja-based lawyer, has said that he has been instructed to institute legal proceedings against MTN Nigeria, Airtel Nigeria, Globacom, 9mobile and MultiChoice Nigeria, operators of DStv, over what he described as unfair consumer practices relating to expiring data bundles and television subscriptions.
In a statement posted on Facebook, Ogbaga said his law firm, GIMBG Legals, received instructions from its client, KAA, also known as KaaTruths, to challenge the companies’ subscription policies in court.
According to him, the proposed suit will question whether telecom operators and DStv’s subscription models comply with provisions of the Federal Competition and Consumer Protection Act (FCCPA) 2018 and other applicable laws.
Ogbaga alleged that telecom providers operate internet data services that are unfair to consumers, claiming subscribers sometimes do not receive the services they paid for but still lose their subscriptions once the validity period expires.
He also criticised DStv’s subscription model, arguing that consumers lose paid viewing time due to factors such as power outages, adverse weather conditions and service interruptions, while subscriptions continue to count down regardless.
“Our clients have complained that MTN data services are unduly one-sided,” Ogbaga said, adding that the legal action would also extend to other telecommunications providers and DStv.
He said the court action would seek judicial determination on whether the companies’ subscription practices comply with consumer protection laws.
The lawyer also invited interested legal practitioners to collaborate on the case, saying his firm would provide updates as the matter progresses.
In a separate Facebook post on Wednesday, Ogbaga said previous policy discussions, town hall meetings and debates at the National Assembly had failed to address the concerns raised by consumers.
He argued that telecom operators regularly carry out maintenance and network upgrades that temporarily disrupt services without extending customers’ subscription periods, while DStv subscribers also lose viewing time because of electricity outages and weather-related disruptions.
The National Insurance Commission (NAICOM) has commenced the issuance of new licence certificates to insurance companies that successfully met the industry’s new minimum capital requirements, marking the formal beginning of a new regulatory era aimed at strengthening the financial capacity, governance and global competitiveness of Nigeria’s insurance sector.
At a ceremony held at the Commission’s headquarters in Abuja, the Commissioner for Insurance, Olusegun Ayo Omosehin, presented the new licence certificates to compliant operators, describing the exercise as a major milestone in the industry’s recapitalisation programme.
According to the Commission, a total of 43 insurance companies declared compliant with the new capital requirements are expected to receive the new licence certificates in phases.
Omosehin congratulated the successful companies, saying the issuance of the new licences signals the beginning of a stronger regulatory framework anchored on improved capitalisation, sound corporate governance, innovation and sustainable growth.
He urged operators to leverage their enhanced capital base to develop innovative insurance products, improve operational efficiency and deepen insurance penetration across the country.
The Commissioner said the Commission expects the recapitalised companies to deliver stronger financial performance while maintaining high standards of professionalism and customer service.
He also announced that NAICOM’s next major regulatory initiative would be the implementation of the Risk-Based Capital (RBC) framework, under which insurers’ capital levels would be aligned with the risks inherent in their respective business portfolios.
According to him, the new framework will further strengthen the industry’s resilience by ensuring that insurers maintain capital commensurate with the risks they underwrite, thereby enhancing policyholder protection and boosting market confidence.
Omosehin reaffirmed the Commission’s commitment to removing regulatory impediments where necessary while maintaining effective oversight to safeguard policyholders and strengthen confidence in the insurance market.
The issuance of the new licence certificates marks the commencement of a phased transition to higher capital standards aimed at improving the financial capacity, solvency and claims-paying ability of insurance companies operating in Nigeria.
Management of Nigeria CommunicationsWeek Media has withdrawn its publication titled “Adefolarin Ogunsanya and the Allegations of Shareholder Interference and Self-Dealing at Pan African Towers,” which was published on its platform.
The decision to retract the story follows an editorial review to ensure that the platform maintains the highest standards of accuracy, fairness and responsible journalism in reporting matters that are the subject of ongoing judicial proceedings.
Nigeria CommunicationsWeek acknowledges that the issues raised in the publication remain before the courts and have not been finally determined.
Accordingly, the organisation has decided to remove the article from its platforms pending the conclusion of the legal processes or the availability of additional verified information.
The publication regrets any inconvenience or misunderstanding the report may have caused to readers or any individuals or organisations mentioned in the story.
Nigeria CommunicationsWeek remains committed to the principles of balanced, factual and ethical journalism and will continue to uphold professional standards in its coverage of judicial and corporate governance matters.
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