The Federal Government has won its case against Process & Industrial Developments, P&ID contract which sought enforcement of $11 billion debt in its favour.
The development comes after five years of intense legal battle.
A UK court on Monday quashed the enforcement of the judgment on the grounds that it was fraudulently obtained.
In a ruling, Robin Knowles, the Justice of the Commercial Courts of England and Wales, upheld Nigeria’s prayer that the judgment should be quashed.
Nigeria had argued that it was a victim of bribery and deception in the controversial gas deal.
The P&ID contract dates back to January 2010 when the company signed a gas supply and processing agreement with the Ministry of Petroleum Resources on behalf of the Nigerian government.
Under the terms of the agreement, P&ID contract was to build and operate an Accelerated Gas Development project to be located at Adiabo in Odukpani Local Government Area of Cross River State. The Nigerian government was to source natural gas from oil mining leases (OMLs) 123 and 67 operated by Addax Petroleum and supply to P&ID to refine into fuel suitable for power generation in the country.
However, P&ID alleged that after signing the agreement, the Nigerian government reneged on its obligation after negotiations were opened with the Cross River State government for allocation of land for the project.
The company said the failure to construct the pipeline system to supply the gas frustrated the construction of the gas project, thereby depriving it of the potential benefits from over 20 years’ worth of gas supplies.
It added that attempts to settle out-of-court with the Nigerian government failed.
In August 2012, P&ID served the Nigerian government a Request for Arbitration but Nigeria argued before the tribunal that “the failure of P&ID to acquire the site and build Gas Processing Facilities was a fundamental breach and that no gas could be delivered until this has been done.”
The tribunal ruled that Nigeria’s obligations under Article 6B were not conditional upon P&ID having constructed the gas processing facilities.