Preemptive measures against recurrence of P&ID’s saga (1)

Segun Olatunji

Without being privy to any contract, it is premature to comment authoritatively on the contract. We must be well abreast with the contractual terms, conditions and warranties so as to fathom its implied terms and the peculiar penalties non-execution or partial execution or wrongful execution of a contract imposes. While giving an economic consequence of paying the consequential damages of $9.6bn can be instructive, a legal analysis of any contract devoid of access to the specifics is forcing a square peg into a round hole.

From the essence of the contract between the Process and Industrial Development LTD and Nigeria made public, we have gleaned enough to proffer measures to drastically lower the size of this onerous penalty on Nigeria and Nigerians and offer strategies to prevent stampeding into any future contract. The P&ID is reaping the negligence or recklessness of Nigerian signatories to a contract entered into in 2010 to process and refine natural gas into electrical energy and other domestic uses.

Crucial to this contract is the provision that the Federal Government must build a pipeline to convey natural gas to the proposed gas plant to be built by the P&ID. The failure of the Nigerian Government to construct the pipeline prevented the building of the gas plant, which triggered legal proceedings in Britain culminating in a whopping $9.6bn judgment against Nigeria.

An incontrovertible feature of this contract is that any developing issue from it shall be subjected to Nigerian laws: Nigerian Arbitration and Conciliation ACT Cap A 18 and Nigerian Federal High Court. Allowing the case to be adjudicated in the United Kingdom in the first place was foolishness on steroid. Once we surrendered the primacy and supremacy of our laws to the British’s, we are bound by the unpalatable British decision. Without mincing words, this is a display of prototypical inferiority complex resulting in unforced procedural error.

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This windfall to the P&ID would cause a bandwagon effect of other aggrieved parties to abandoned, uninitiated or poorly executed contracts to unleash a barrage of law suits against Nigeria. Whether we are penalised or not, millions of dollars would be spent negotiating with the aggrieved parties, and litigating these cases. Our ineptitude in handling the procedural issues in the P&ID case was a self-flagellation likely to expose us to a spate of litigation: provable or not.

With necessary and correct procedural steps, the stupendous award can be drastically reduced. That is why the P&ID is baiting Nigeria into early negotiation to maximise the part of the award it is anticipating to actually receive, knowing that the appeal court would consider the staggering amount unreasonable and unfair; therefore, the $9.6bn bargaining strength in an early negotiation would vanish.

As this decision stands, we can be asked to pay the award in instalment. But if one or two more similar cases are awarded against Nigeria, the consequences would be too devastating to bear without the government facing the wrath of the citizens for her lackadaisical handling of this case since 2015.

The ensued badly battered economy would manifest unimaginable heightened and enlarged poverty, barely existing social amenities and infrastructure, bloated hyper-inflation, unemployment galore, hold-no-bar criminality, rampant business closures, bolting of foreign investors, mass exodus of Nigerian youths, scarce foreign reserves, severely threatened democracy, and reign of anarchy that would make Omoyele Sowore’s “RevolutionNow” a nostalgic preference. We are talking of tattered quality of life and threadbare standard of living!

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The more reasons urgent steps be installed to preclude the recurrence of such penalty or penalties. If we had all the aforementioned provisions in favour of Nigerians, why was the case botched? It is not enough to apprehend all the actors sleeping on duty when the deal was consummated, other people behind the scene must be interrogated in order to detect the scope of the vultures circling the consummation of a deal that was not feasible at the time.

In Nigeria, such a deal is never done without some people being settled. Who are those people? A former military chief did not voluntarily come out to inform the world that the proposed gas plant was his idea and he fronted the $40m the P&ID had claimed as its expenses so far until an American newspaper confronted him.

The mountebanks responsible for the behind-the-scene pressure are as culpable as the signatories.

All of them must be subjected to the fullest wrath of the law for compounding Nigerians’ miserable existence, and as a deterrent to would-be copycats. The morbid interest of these hucksters should not be condoned over the well-being of Nigeria. Heads must roll in order to stop future bleeding of Nigeria by would-be vampires.

A sustainable approach must be in place to prevent future embarrassment. Needless to opine that multidimensional steps must be implemented. First and foremost, the vetting process of awarding contracts both at the state, local and federal levels must be standardised with allowances made for peculiarities of contracts under strict oversight procedures. In addition, all contracts be made public with the preceding bidding processes.

In a bid to formulate the template guiding future contracts, injection of the devil advocacy to preclude susceptibility to group-think syndrome afflicting government policies becomes inevitable. The formulating process must embrace vigorous application of decision-tree analysis developing different scenarios running through the gamut of executory contract, wrongfully executed, substantial performance to unexecuted contract.

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The meeting summoned by Vice-President Yemi Osinbajo comprising the Attorney-General, Ministers of Finance, Budget and National Planning, Information, and the Governor of the Central Bank was more likely to be infested by a group-think syndrome because of the similarities in their value orientations, blind loyalty to the government, instead of the nation, and portrayal of espirit-de-corp, not stepping on the toes of offending portfolios or ministries or individuals.

Suffice to say outside experts must be brought into the formulation phase of contracts that have the potentiality of jeopardising the interests of Nigeria. The outside experts can proffer independent opinions on the formulation of such contracts in the interest of the nation.

Non-beholden outside experts would have pre-warned the signatories to the P&ID contract of the impending consequential damages if Nigeria did not have the resources or the will to construct the pipeline to convey gas as antecedent to the envisaged gas plant. Besides, if the signatories are hell-bent on signing such a contract, the devil advocates can step up their role into whistle-blowing by alerting the National Assembly and the public of the minatory catastrophic consequences.

Olatunji is a lawyer based in Abuja

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