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Unease As Nigeria May Lose $9bn In Foreign Assets As London Court Sits On Tuesday |RN

Her Majesty Court

Anxiety continues to mount in government circles in Nigeria as a London court sits next Tuesday in a case that may see Nigeria forfeiting up to $9billion in foreign assets.
The expected loss is in respect of an enforcement application to the United States of America and the United Kingdom courts by Process and Industrial Development, 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.
On 16 March 2018, a BVI-based engineering and project management company sought to enforce in the US a USD6.6 billion award it obtained in January 2017 against Nigeria. This is one of the highest arbitral awards known to date. It shows the importance of the Respondent challenging facts, assumptions and calculations provided by the Claimant and of providing alternative evidence to the Tribunal.
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 May 21, 2019.
A former Attorney General of the Federation, Chief Bayo Ojo is representing Nigeria in the case.
Brendan Cahill, Founder, P&ID, said the company looks forward to the UK and US courts granting enforcement rights that will allow it to collect what is rightfully its.
Cahill said: “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.”
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 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 saddened by the failure of such a promising project and government’s lack of interest in trying to resolve the dispute amicably, adding that the 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.
He said: “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.”
In late February this year, the Office of the Attorney-General of Nigeria 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.

Background
In January 2010, Process and Development Limited (P&ID or the Claimant) and the Ministry of Petroleum Resources of the Federal Republic of Nigeria (Nigeria or the Respondent) entered into a 20-year Gas Supply and Processing Agreement (GSPA). Under this agreement Nigeria would supply Wet Gas to P&ID, who would process it in a newly-built facility and return it in the form of Lean Gas. P&ID could then sell the by-products of the refinement process (natural gas liquids (NGLs) for their own profit.
Nigeria did not make arrangements for the agreed supply of Wet Gas, including building the necessary pipelines. In March 2013, P&ID treated this failure as a repudiation of the GSPA. By that date PI&grin estimated that it had invested USD40 million in the project, although it had not yet acquired the land or built the facilities.
In July 2015, an ad hoc tribunal seated in London decided that Nigeria was liable to damages to P&ID. In a majority decision in January 2017, the tribunal awarded USD6.6 billion in damages to P&ID. The dissenting opinion estimated the loss at USD250 million over three years.

Claimant’s position
The Claimant estimated that the project would produce a net profit of USD5 to USD6 billion over a 20-year period.
Income projections were based on several assumptions relating to the expected yield of NGLs and the price of NGL. The Claimant estimated capital expenditure at USD580 million and operational expenditure at cUSD60 million per year.
The Claimant used a discount rate of 2.65% based on US Treasury bonds to represent only the time value for money.

Respondent’s position
The Respondent objected that P&ID should only be entitled to nominal damages as it had not fully performed its obligations under the GSPA at the date of the repudiation.
It argued that production would be disrupted by militancy in the Niger Delta so that utilisation should be reduced to 40-50%. The Respondent’s expert challenged the Capex calculation as being based on inadequate material.
The Respondent also insisted that damages could only be awarded for a period of three years as the Claimant had a duty to mitigate its loss and it should have pursued other investment opportunities.
The Respondent adopted a discount rate of 7% to reflect the risk of investing in Nigeria.

Approach taken by the tribunal
The Tribunal considered that there was no evidence that the Claimant was unable or did not intend to perform its obligations under the GSPA. Consequently, the Tribunal rejected the Respondent’s argument on nominal damages.
In addition, the Tribunal determined that there was no actual evidence that militancy in the Niger Delta had any impact on gas production or transport around the site earmarked by P&ID, or that other NGL prices than the ones forecast by the Claimant should be used.

In the absence of a meaningful challenge from the Respondent, the Tribunal agreed with the Claimant on key aspects of the measure and calculation of damages, including the 20-year period, the other underlying assumptions to project net income, and the discount rate. It awarded USD6.6 billion in damages together with pre and post-award interest of 7%. This interest rate reflects what PI&grin would have had to pay to borrow the money or could have earned by investing in Nigeria.

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Buhari’s Medical Trip Enters Fourth Week |The Republican News

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President Muhammadu Buhari

Olalekan Adetayo, Friday Olokor and Kamarudeen Ogundele

President Muhammadu Buhari’s medical vacation will on Monday (today) enter its fourth week.

The President has been away from the country for 24 days (16 working days) having left for London, United Kingdom on January 19.

As of the time he was leaving, Buhari had written the National Assembly that he would proceed on a short vacation that would see him undergoing check-ups from January 24 and would resume on February 6.

He has since transmitted another letter in which he said he had decided to extend the vacation because of the need for “a course of medications and further appointments” with his doctors.

Throughout the weekend, presidential aides and officials attached to the Protocol Unit of the Presidential Villa, Abuja were put on standby on the President’s possible return to the country.

Efforts made by agitated State House correspondents for information on the arrangements to receive the President on arrival at the Nnamdi Azikwe International Airport also did not yield any result.

As of the time of filing this report on Sunday evening, it was still not clear when Buhari would return to the country.

His wife, Aisha, had however on Saturday returned from Saudi Arabia where he participated in Lesser Hajj.

Many saw her return to the country as a prelude to the President’s arrival.

Amidst various speculations on the state of health of the President, his handlers including the Acting President, Yemi Osinbajo, had insisted that he is hale and hearty.

Buhari’s letter to the National Assembly, announcing the extension of his vacation had read, “Further to my letter dated 18th January, 2017 in which I notified the Distinguished Senate of taking part of my annual leave.

“During my leave, I took the opportunity to have routine check-ups and consult my long standing doctors in London.

“In the course of the routine examinations, certain test result indicated the need for a course of medications and further appointments have been scheduled for next week.

“I am therefore notifying the Distinguished Senate that I am extending my leave until the doctors are satisfied that certain factors are ruled out. In the circumstances, the vice-president will continue to act on my behalf.

“Please accept, Distinguished Senate President, the assurances of my highest consideration.”

Meanwhile, a former chairman of the Economic and Financial Crimes Commission, Mrs. Farida Waziri, on Sunday expressed concern about the perceived politicisation of the foreign medical trip of President Buhari with a call on Nigerians to cultivate the habit of encouraging their leaders, rather than demonising them.

According to her, the present economic hardship in the country should not lead to some citizens wishing their leaders dead.

“Speaking positively about our leaders and country will no doubt have a positive impact on our collective image around the world. Agreed, there is much suffering in the land but this should not change us from being the good people that we have always been, by wishing our leaders dead. Let us have a rethink. We can’t afford to cut our noses to spite our faces. We must not lose our humanity even in the face of hardship and recession, because it is our collective effort to build this nation,” the ex-EFCC chairman emphasised.

Waziri, in a statement obtained by The PUNCH in Abuja, said while “great nations adore their leaders, especially the good ones, and do not talk ill of them, Nigerians do not wish their leaders well.”

She said, “The world over, great nations –  whether the US, UK, China, Germany or France and more – they don’t talk ill of their leaders, instead, they encourage them and build them as exemplary national figures. As the wife of Nigeria’s Ambassador to Turkey in 2004-2008, I arrived at Atatürk Airport Istanbul, my escort informed me proudly that the airport is named after the father of modern Turkey.

“Downtown Istanbul main street was also adorned with portraits of the man, Atatürk. This, to me, is one clear way to encourage and build our national figures and leaders. Let the good ones serve as good examples of good leadership and the bad ones as such.

“During an event, there was a general discussion on various leaders from different countries: Ghandi (India), Mandela (South Africa) Nyerere (Tanzania), Kenyatta (Kenya). Now a lady asked me what was the name of the Atatürk of Nigeria and for the first time I realised that Nigerians do not appreciate their leaders but would rather bad-mouth them.

“I was taken aback by the question and tried to run through my mind the names of our leaders. Now, this is the question: why do we want our leaders dead or spread rumours that they are dead?  …For the late President Umaru Yar’Adua, it took the wittiness and ingenuity of former President Olusegun  Obasanjo to halt the rumour mill by placing a call publicly to the late President. Now our President is on vacation and seizing the opportunity to undergo medical check-up and instead of wishing him well, Nigerians are busy spreading rumour about his death.”

Also, the Special Adviser to the President on Political Matters, Senator Babafemi Ojudu, has said looters were the ones wishing President Buhari dead to escape prosecution.

He stated that Buhari had so far given the country exemplary leadership and cleared the rot left behind by the 16-year rule of the Peoples Democratic Party, which he said, had damaged the economy of the nation.

Ojudu spoke while hosting leaders and members of the All Progressives Congress from the 16 Local Government Areas of Ekiti State at his residence in Ado Ekiti.

He urged the APC members in Ekiti to be united and continue aggressive mobilisation ahead of the 2018 governorship poll to wrest power from Governor Ayodele Fayose-led PDP in the state.

Ojudu said, “Our President is honest, patriotic, committed and passionate that this country must be great. Nobody can accuse the President of fraud, corruption and stealing in government.”     (Punchng.com)

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