US appeal court permits Nigeria to request documents from P&ID stakeholders

A US court of appeals for the second circuit has overturned orders which blocked Nigeria from obtaining documents to support its appeal against a $10 billion judgement awarded against it in a case against Process and Industrial Developments (P&ID).

In 2019, a British court gave P&ID the go-ahead to seize Nigerian assets worth $9 billion over a 2010 contract.

The company claimed it agreed with Nigeria to build a gas processing plant in Calabar, Cross River state, but that the deal collapsed because the Nigerian government did not fulfil its end of the bargain.

The award, which has been accruing interest since 2013, is now worth $10 billion.

Nigeria had alleged that the gas deal was a scam designed to defraud the country.

Lawyers representing the federal government told the court that P&ID officials paid bribes to get the contract.

But P&ID denied the allegation and accused the Nigerian government of “false allegations and wild conspiracy theories”.

In a move to overturn the judgement, Nigeria got court clearance to request documents from P&ID stakeholders. The stakeholders include VR Capital, four subsidiaries and three of its directors — and review bank statements of ex-President Goodluck Jonathan, Diezani Alison-Madueke and Rilwanu Lukman, former ministers of petroleum.

However, the New York district court vacated its order in November 2020, on the grounds that Nigeria had not “provided a good reason” for bypassing the procedures set out in a mutual legal assistance treaty (MLAT) between the US and Nigeria.

The court also held that the discovery application appeared “unduly intrusive or burdensome” as it sought to subpoena documents outside of the subject of bribery.

But in a verdict delivered on February 3, 2022, a three-member panel of the court of appeal for the second circuit held that the lower court erred when it refused to allow Nigeria’s request for discovery from VR Capital Group and its executives.

The appellate court said Nigeria had not “circumvented” the MLAT as the treaty “does not restrict Nigeria’s use of other lawful means to access evidence in the United States for use in criminal matters”.

Court filings show that Nigeria wants VR Capital to hand over documents concerning the company’s purchase of P&ID shares, contract and arbitration proceedings.

The Economic and Financial Crimes Commission (EFCC) said its investigations have shown that P&ID acknowledged destroying records “in or around January 2017” and VR Capital is “a logical source” for recovering such information.

In a separate decision, a court of appeal has also granted Nigeria approval to obtain third-party discovery for use in the English set-aside proceedings against P&ID.

Adrian Jack, a judge in the British Virgin Island (BVI) high court, had ruled in July 2021 that Nigeria was not entitled to obtain disclosure orders against two BVI entities, Nerine Trust and Trident Trust.

Nigeria had described the entities as “registered agents” who were “innocently mixed up in the fraud”.

According to Global Arbitration Review (GAR), a spokesman for Nigeria said the state “has always been confident that its appeal would be upheld, and that the BVI high court’s highly unusual judgment erred in fact and law”.