A foreign hedge fund, managed by VR Capital Group is intensifying efforts to recover the sum of $9 billion, being a judgment sum its legacy company, Process & Industrial Development (P&ID) won against Nigeria over nine years ago.
Process & Industrial Developments (P&ID) had sued and won a staggering judgment, now worth $9 billion against the country in 2010.
The company has, however, spent years trying to get the country to pay that award, equivalent to almost 2.5 percent of Nigeria’s annual gross domestic product.
A hedge fund managed by VR Capital Group has now taken a large stake in P&ID, thus, the fresh push to recover the money.
A report from Bloomberg said the gas company is trying to pull levers of power in the United States of America and the United Kingdom. to make Nigeria settle or, failing that, enable the company to start seizing assets.
Two years ago, P&ID won a decision against the Nigerian government , which reneged on an agreement allowing the natural gas company to harvest hydrocarbons in the country. Although lawyers for Nigeria say the company never put a shovel in the ground, a London arbitration tribunal in 2017 awarded it $6.6 billion—with more than $1 million in interest accruing daily.
To collect, P&ID, owned by the hedge fund and a firm called Lismore Capital Ltd., late last year hired lobbyists, lawyers, and a public-relations firm. The attorneys are also trying to confirm the award in courtrooms in Washington and London, which would allow P&ID to start seizing Nigerian assets in the U.S. and the U.K.
Dayo Apata, Nigeria’s solicitor general, said in a statement that the country “will ensure that its interests and that of the people of Nigeria are vigorously defended.” He wrote that the arbitration panel assumed too much confidence in the success of P&ID’s project in calculating the damages, leading to an excessive award.
In a statement, Brendan Cahill, one of P&ID’s founders, said “it is disappointing that Nigeria chose to repudiate the terms of a deal that would have benefited the country by bringing electricity to millions of its citizens.” He said the company, “backed by its investors,” would pursue enforcement.
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The issue began almost a decade ago and is revealed through court and arbitration filings and other public documents. Despite the country’s ample natural resources, Nigeria’s state-owned power and petroleum companies have struggled to power the country.
To help fix the problem, in 2010 then-President Umaru Musa Yar’Adua authorized partnerships with private companies to develop the nation’s energy infrastructure. The Ministry of Petroleum Resources struck one such agreement in January 2010 with P&ID, which was founded in 2006 by two Irishmen, Michael Quinn and Cahill.
Under the agreement, Nigeria planned to pipe natural gas from two offshore oil rigs to a refinery that would be built by P&ID. There, P&ID would remove hydrocarbons from the gas and send the fuel to Nigerian power plants. P&ID wouldn’t get paid for the endeavor, but it could keep and sell the hydrocarbon byproducts, which themselves had value, with the government getting a cut.
The company hoped it would make billions of dollars from the arrangement while helping to provide Nigeria with much-needed power. Quinn, in a statement before an arbitration panel, said he thought the deal would have been “the high point of my own career in Nigerian business.” He said P&ID spent tens of millions of dollars on preparatory work before winning the agreement. The project, however, never got off the ground.