Nigerians were rightly exultant about the recent judgement of the London Commercial Court quashing the $11bn arbitration award against Nigeria in the case involving an Irish company, Process and Industrial Developments Ltd, also known as P&ID. Former President Muhammadu Buhari penned a newspaper article titled ‘A matter of principle’, in which he described the award as “an attempted heist of historic proportions”, arguing that Nigeria would have forfeited “a third of its foreign reserves” had it lost the case. Bola Tinubu, the current president, called it a “landmark judgement.” Both Buhari and Tinubu credited their governments for the victory. But they miss two fundamental points.
First, it wasn’t lost on the British judge that Nigeria is a fantastically corrupt country where politicians and officials conspire with contractors to defraud their country. Second, the judge ignored technicalities and focused on the merits of the case. Fraud and corruption are serious crimes against society and must not be accorded the protective shield of legal technicalities. Sadly, that’s not how Nigerian courts behave: they put procedural technicalities above substantive justice; they dismiss serious corruption cases on technical grounds. We can’t ignore those two takeaways in the P&ID case.
Let’s start with the first. Justice Robin Knowles, who delivered the judgement on October 23, made some remarks that will resonate with Nigerians. He said that the P&ID case “brought together a combination of examples of what some individuals will do for money; driven by greed and prepared to use corruption, giving no thoughts to what their enrichment would mean in terms of harm for others.” He said Nigerians were let down by “a number of individuals in politics and administration whose duty it was to serve them and protect them.” For those who say there’s no morality in law and politics, the judge was clearly making a moral statement, based on John Stuart Mill’s harm principle.
Sadly, what Justice Knowles described in his resonant remarks is a widespread phenomenon that is not limited to the P&ID case. For the truth is, Nigerian politicians and officials have always colluded with contractors to swindle the country of billions, even trillions, of naira. In this column, I have often referred to Dr Ngozi Okonjo-Iweala’s internationally-acclaimed book, Fighting Corruption Is Dangerous. Indeed, I urge anyone who wants to know the true nature of public corruption in Nigeria to read that book, an account of Okonjo-Iweala’s experience as a two-time finance minister.
In a chapter titled “Opaque Deals and International Scams”, Dr Okonjo-Iweala extensively describes the problem of contract frauds in Nigeria. She says that politicians and officials commonly award contracts with a view to defaulting on them for personal gains. She says the arrangement involves connivance between contractors, government officials and the courts, describing it as “an unholy alliance where amounts owed by government, interests and penalties were inflated and all parties shared in the proceeds after payment.”
Dr Okonjo-Iweala was describing the periods between 2003 and 2006 and between 2011 and 2015 when she was Minister of Finance. But if you think the practice she described is dead, well, you are wrong: it is extant; alive and kicking. Recently, while addressing the media, Ola Olukoyede, the new chairman of the Economic and Financial Crimes Commission, EFCC, disclosed that: “Between 2018 and 2020, Nigeria lost N2.9trillion to contract and procurement frauds.” That’s just within two years!
Were English courts to fetishise technicalities as Nigerian courts do, the pivotal victory in the P&ID case would have eluded this country
In his response to the P&ID judgement, Tinubu said that Nigeria “would no longer be held hostage by economic conspiracies between private firms and solitary corrupt officials.” He’s wrong. First, the P&ID case and similar contract frauds in Nigeria didn’t involve “solitary corrupt officials”; rather, as Okonjo-Iweala’s book shows, they involved a wide network of corrupt politicians, officials and even judges. Secondly, contract frauds won’t end in Nigeria because, as several studies have shown, there is a strong relationship between big government and public corruption.
Truth is, when a government is spending massively on contracts and procurements, corruption is not far-fetched, especially in a country like Nigeria where the government pays lip service to due process and procurement rules. Therefore, it is utterly irrational and misguided to expect large-scale contract and procurement frauds to diminish under Tinubu’s big-spending government, a government that wants to be defined, as I wrote last week, by aggressive fiscal activism, by unlimited spending. So, expect contract and procurement frauds to fester and escalate under Tinubu’s government amid multi-trillion-naira contract awards and procurements.
Which brings us to the second takeaway from the P&ID case. Well, the truth is, despite Buhari’s self-congratulatory article, his government’s initial handling of the case was shambolic and incompetent. For instance, it did not appeal the arbitration tribunal’s final award made in 2017 until several months after the 28-day deadline. Rather, it spent time arguing that the case should be heard in Nigeria, despite an earlier ruling that the seat of the arbitration was England. Crucially, Nigeria did not make allegations of bribery and corruption when it eventually appealed the tribunal’s award at the Commercial Court in October 2018.
It was only after Justice Christoper Butcher granted P&ID’s application to enforce the arbitral award in September 2019 that Nigeria sought permission to appeal the enforcement order on grounds of bribery and corruption. Yet, Justice Butcher granted Nigeria’s application to appeal and ordered a stay of enforcement until the determination of the appeal. He refused to allow technicalities, such as Nigeria’s failure to meet deadlines and other procedural laxities, to stand in the way of substantive justice.
In December 2019, Nigeria filed an application asking the Commercial Court to set aside the arbitration award on the grounds that it was procured by fraud, corruption and perjury. Now, anyone who followed the case closely after Nigeria filed that application would agree that the judge bent over backwards to allow Nigeria to prove its case. On many occasions, the court granted Nigeria’s applications for “the extension of time” and for “further disclosure and related orders and a notice to prove documents.” At all times, the court’s disposition was to let Nigeria tender documents “that will throw relevant light on the case”.
But that’s not the attitude of Nigerian courts. By contrast, they are fixated on technicalities even in matters of serious public policy concerns, such as corruption. In 2022, Abdulrasheed Bawa, then chairman of EFCC, expressed frustration that several high-profile corruption cases were lost on technicalities. As he put it, “defendants who obviously have stolen our commonwealth and those who have aided and abetted them have been allowed to go home to enjoy their proceeds of crime on technical grounds.” Think about it. Were English courts to fetishise technicalities as Nigerian courts do, the pivotal victory in the P&ID case would have eluded this country.
Here’s another point. As Africa’s largest economy, Nigeria should be a regional hub for international commercial arbitration or litigation. Why is it not? Well, because Nigeria’s judiciary is regarded worldwide as corrupt and dysfunctional. In one report, the US Trade Representative, USTR, says: “The sanctity of contracts is often violated and Nigeria’s court system for settling commercial disputes is weak and sometimes biased.” Indeed, in a recent World Bank Doing Business Index, Nigeria scored only 8 out of 18 on quality of judicial process. Twice in the P&D case, Nigeria’s argument that it’s the right place to hear the case was rejected. Simply put: no foreign investor will ever agree to settle disputes in Nigeria.
So, Nigeria must thank Britain’s independent, incorruptible and competent courts for its victory in the P&ID case. Sadly, however, Nigeria’s corrupt politicians, officials and judges cause huge reputational damage globally, and erode investor confidence in Nigeria!
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