US Court Rejects Nigeria’s Request To Cancel N2.7 trn Fine

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The District Circuit Court in Washington DC has dismissed the federal government’s request for it to set aside its $8.9billion arbitration award against Nigeria over alleged breach of contract.

The court, presided over by Justice Christopher Cooper, said the request was denied not only on ground that it was belated, but also on the basis it sought the dismissal of the petition for the enforcement of the award.

A government legal team, led by Abubakar Malami, the Attorney General and Minister of Justice, left Nigeria on Wednesday morning to Washington DC to attempt to get the court to set aside the award against Nigeria.

The team also included Dayo Apata, the Solicitor-General of the Federation and Ibe Kachikwu, the Minister of State for Petroleum Resources.

It was joined by a team of foreign solicitors, including Messrs Curtis, Mallet-Prevost and Colt & Mosle LLP, hired by the federal government to initiate the legal process to challenge the enforcement of the $8.9 billion award against the country.

But the outcome of the court’s proceedings showed that Nigeria’s motion requesting the court to set aside the clerk’s entry of default award was dismissed.

The court, however, granted a part of the country’s motion that Nigeria was not properly served the process documents by addressing them to the “head of the ministry of foreign affairs” as is the practice under 28 U.S. Code section 1608(a)(3).

The code stipulates the order of service or delivery of a copy of the summons and complaint in U.S. courts to a foreign state or political subdivision of a foreign state.

In his ruling on Friday, Judge Christopher Cooper said the court would have granted Nigeria’s request to set aside entry of default in view of the country’s recent interest to appeal, but described the request as belated.

The law stipulates a period of 30 days within which copies of the summons and complaint and a notice of suit should be sent to a foreign state.

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“The motion is denied to the extent it seeks dismissal of the petition,” the judge said.

The arbitration award was issued on March 20, 2013, in favour of a British engineering firm, Process & Industrial Development Limited, P&ID, over alleged breach of contract by the Nigerian government.

The original award against Nigeria was about $6.59 billion. But, following the country’s refusal to enter an appeal for over five years, the award attracted additional $2.3billion in accumulated interest at 7 percent rate per annum.

On January 31, 2017, the three-man tribunal constituted under the rules of the Arbitration Act 1996 (England and Wales) and the Nigerian Arbitration and Conciliation Act (CAP A18 LFN 2004), gave the final award of $8.9 billion for enforcement.

Malami’s team, according to online portal, Premium Times, had received a directive from President Muhammadu Buhari to ensure they did all that was legally possible to get the U.S. Court to review its affirmation of the award and drastically reduce its value against Nigeria.

However, a senior Justice Ministry official who spoke on condition of anonymity on Thursday, said the main plank of the team’s argument, which they sold to the President, was that the court lacked the legal authority to give such a ruling against a sovereign nation as Nigeria.