Foreign legal counsel to Nigeria in the P&ID case has advised the Federal Government to focus on strengthening its procurement processes and conducting thorough due diligence on contracts to prevent a recurrence of the scandal.
The controversial P&ID case involved a shell company that filed multi-billion dollar claims against the Nigerian government for allegedly failing to keep its side of a gas supply and processing agreement, resulting in an arbitral award of about $11 billion to the British firm.
Shaistah Akhtar, a Partner at Mishcon de Reya LLP, who was part of the legal team representing Nigeria during the trial said Nigeria should consider this advice as safeguards before awarding high-value contracts in the future.
Speaking during a send-off ceremony for the Director of the Legal Services Department of the Central Bank of Nigeria (CBN), Mr. Kofo Salam-Alada, Akhtar said these were things to look out for in the procurement process and in the process of awarding these high-value contracts going forward.
Despite Nigeria’s sophisticated anti-corruption and anti-money laundering laws, Akhtar said things still went wrong in the P&ID case, because government officials were bribed.
“The contract was not as robust as it should have been. It was quite a flimsy contract for such a long-running and high-value transaction,” she said, adding that “there wasn’t any due diligence carried out on the contractors, who were effectively a two-man band and an offshore company with no assets and no track record.”
She pointed out that many things went wrong with the contract, which should serve as lessons to be learnt.
On the implication of the arbitral award, Akhtar said if the shell company was successful in enforcing the award worth around $11 billion, the potential liability was huge; that would have been equivalent to around a third of Nigeria’s foreign reserves, and several times its education, health, and security budgets.”
The significance of Nigeria’s victory in the P&ID case, she noted, was multifaceted, including obviously, its huge economic liability, which was removed.
“It is also a great symbol in the fight against corruption. It’s a practical implementation of the government’s anti-corruption policy. And it also sets a powerful deterrent against other fraudsters who may be trying to take advantage of the government and exploit its resources,” she said.
Shaistah Akhtar who also shed light on the crucial role Mr. Salam-Alada, along with the parties to the litigation from the Ministry of Justice, the CBN, and the Ministry of Petroleum Resources, played in Nigeria’s success in the P&ID case.
“Kofo Salam-Alada was delegated the day-to-day responsibility of dealing with the lawyers, in terms of giving instructions, obtaining information and ensuring that we as the lawyers had the tools needed to pursue this case.
“He worked extremely hard over a period of five and a half years, going above and beyond the call of duty, working all hours and dealing with a number of government agencies and government officials to obtain the instructions and the information we needed to pursue the case,” she said.
She said the lesson to learn was to appreciate Kofo’s qualities as a professional, an individual and a senior representative of the Nigerian government.
“He played an invaluable role. He has been a critical part of the success of this case, which saved the Nigerian government this enormous liability of $11 billion. This is an important result, not just for the government, but for the over 200 million people of Nigeria. So, it’s a great part of the legacy.
“We feel very proud to have worked with him and to have known him over this time. It’s been a pleasure to work with. He is a great representative of the government, a great servant of Nigeria. And you have left a great outcome which will benefit many generations to come,” she said.
