weak arguments

A record bn fine handed down by an arbitration tribunal in favour of a notorious offshore company could devastate Africa’s largest economy, at a time of high debt, low revenue and surging inflation.

For nearly three years, Process & Industrial Developments (P&ID), a fledgling company incorporated in the British Virgin Islands, has been demanding damages from the Nigerian state at an arbitration tribunal in London for breach of a gas contract, claiming $6bn in a dispute that started over a decade ago.

On 18 May 2015, Diezani Alison-Madueke sent a classified memo to Nigerian president, Goodluck Jonathan, a few days before his handover of power.  Then minister for petroleum Diezani proposed putting an end to a dispute that was still largely unknown.

In the memo, which The Africa Report has seen, the minister advised Jonathan to settle the dispute amicably by paying the company $850m, as requested. The money was to come from the national oil company, NNPC. “Although P&ID’s demands seem outrageous, the government has very weak arguments to defend itself in this case,” wrote Alison-Madueke. The outgoing president made his decision a week later, on 25 May: “I cannot authorise at this time. Please submit to the incoming government for consideration.”