House Sets Up Ad-Hoc Committee to Investigate $9.6bn Judgement Debt

The  House of Representatives on Wednesday set up an ad hoc committee to investigate the controversial $9.6 billion judgement debt against Nigeria by a British court in a case involving the federal government and a United Kingdom-based Process and Industrial Development (P&ID) Limited.

The decision was sequel to a motion on urgent need to investigate the alleged official negligence in the handling of the P&ID transaction by the Ministry of Justice and Ministry of Petroleum Resources respectfully. The motion was moved by Hon. Julius Ihonvbere.

After amendments to the initial motion, the House resolved to mandate a 17-man ad-hoc committee, to as a matter of urgency, invite the ministers of both ministries as well as other officials of the ministries saddled with the responsibility to negotiate the agreement with P&ID and the prosecution of the matter before the court 

The lawmakers also agreed to recommend appropriate sanctions, where necessary, without fear or favour or preference for status in line with Order 14 of the Standing Orders of the House.

It is also to initiate a process of reviewing all agreements and treaties signed by Nigeria through the appropriate committees to create opportunities to discover anomalies and avoid a repeat in the future.

Ihonvbere had noted in his motion that the recent judgement debt of $9.6 billion "leaves a very sour taste in the mouth."

He said: "For a country with a foreign reserve of only $42 billion and a sovereign debt profile of over $80 billion, this judgment debt is not only punitive but would devastatingly affect the Nigerian economy."

He regretted that Nigeria has a penchant for disregarding the sanctity of contracts and terms of agreement, coupled with the failure of Nigeria’s representatives in many cases, to carefully or diligently scrutinise agreements they sign, knowing that the consequences will affect past and future generations.

Nigeria, he stated, had entered into a Gas Supply and Processing Agreement (GSPA) with P&|D Limited, in January 2010, through the Ministry of Petroleum Resources with the understanding that Nigeria would supply natural gas (wet gas) at no cost, through a government pipeline to P&ID’s production facility, while P&ID in return would construct and operate the facility, process the wet gas and return to the government of Nigeria lean gas for the generation of power at no cost to Nigeria.

He noted: "Two years down the line, P&ID had not built any gas plant to which Nigeria could supply wet gas for processing, signifying in the first place that the move to Arbitration was opportunistic and grossly self-serving.

"Cognisant of the fact that, the matter went before an Arbitration Tribunal, under the Rules of the Nigerian Arbitration and Conciliation Act 2004, with London, England as place of Arbitration. After affirming its jurisdiction in the matter, the tribunal began hearing to determine whether or not there was any repudiatory breach of contract. At this point, there was an attempt by the Ministry of Petroleum to reach a settlement agreement with P&ID Limited to the tune of $850 million, payable in instalments which obviously was not diligently pursued.

The agreement, he pointed out, was somewhat shrouded in secrecy and as such apparently dubiously procured, adding that those who ought to know about its existence did not while the relevant laws in Nigeria for the transaction to be consummated was not applied especially, Part IV of the Bureau of Public Procurement Act 2007 which deals with the Fundamental Principles of Procurement.

The lawmaker added that it took the new Nigerian government more than four months to respond to the vital arbitration judgement of about $6 billion "with a ridiculous excuse that there had been a change of administration in Nigeria and that ministers, including the Attorney General, had only just been appointed thus asking for an extension of time to act on the outcome of the arbitration tribunal."