UK Supreme Court dismisses P&ID appeal, orders £43m payment to Nigeria in pounds sterling

The United Kingdom Supreme Court has dismissed an appeal filed by Process & Industrial Development (P&ID), upholding a ruling that the firm must pay £43 million in compensation to Nigeria in pound sterling rather than in naira.

In a unanimous judgment delivered by a five-member panel on Wednesday, the apex court affirmed earlier decisions by the commercial court and the court of appeal, ruling that the award must be paid in the currency used by Nigeria to settle its legal fees during the protracted litigation.

The panel — comprising Lords Robert Reed, Dame Simler, David Richards, Ben Stephens, and Patrick Hodge — held that there was no legal basis to convert the payment to naira, as Nigeria’s solicitors were paid in sterling and the country incurred its legal expenses in the same currency.

Court Upholds Sterling-Based Award

Delivering the lead judgment, the Supreme Court noted that “there are no reasons for the award costs to be paid in any other currency aside from sterling since English solicitors charged and received payments in that currency.”

The court dismissed P&ID’s argument that the conversion of naira to sterling by the Nigerian government to pay legal fees should have warranted payment in the domestic currency.

P&ID claimed that payment in sterling would grant Nigeria a “windfall” due to the sharp depreciation of the naira, which has fallen from about ₦25 billion equivalent in 2019 to ₦95 billion for the same £43 million today.

Rejecting the claim, the panel held that the depreciation had instead led to “a substantial diminution of the domestic purchasing power of the naira” and did not amount to any unjust enrichment for Nigeria.

“Contrary to P&ID’s submission, Nigeria does not enjoy a large windfall from this decision,” the justices stated.

“The depreciation of its currency internationally has resulted in a substantial diminution of the domestic purchasing power of the naira in Nigeria since 2019 and especially since 2023.”

The ruling marks the latest chapter in the long-running dispute between Nigeria and P&ID over a failed 2010 gas processing deal.

P&ID had agreed to build a gas processing facility in Calabar, Cross River State, but the project collapsed after Nigeria allegedly failed to meet its contractual obligations.

The company secured an arbitral award of $6.6 billion in 2017, with interest accruing at seven percent, pushing the total to about $11 billion.

However, in October 2023, Robin Knowles of the Commercial Court of England and Wales set aside the award, ruling that it had been procured through fraud, bribery, and improper access to Nigeria’s confidential documents.

Knowles also ordered P&ID to pay £43 million to Nigeria as compensation for legal costs — a decision that the firm subsequently challenged.

After the UK Court of Appeal dismissed P&ID’s challenge in July 2024, the firm took its case to the Supreme Court, arguing that Nigeria should be paid in its domestic currency since it used funds converted from naira to finance its legal defence.

The Supreme Court, however, upheld the lower courts’ reasoning, affirming that the governing currency of the litigation and associated costs was sterling.

With Wednesday’s decision, the UK Supreme Court has effectively brought the matter to a close, marking another decisive victory for Nigeria in one of the country’s most significant international arbitration battles.

The verdict reinforces the October 2023 judgment that exposed systemic corruption within the original gas contract and vindicated Nigeria’s position that the $11 billion arbitral award was fraudulent.

The Supreme Court also ordered P&ID to bear Nigeria’s legal costs on a standard basis.

The ruling is expected to strengthen Nigeria’s reputation in international arbitration circles and could bolster investor confidence in the country’s ability to challenge unfair or fraudulent treatment