Firm files petition in US court, wants FG to pay arbitral award in dollars

Piccol Nigeria Ltd, an engineering firm, has filed a petition against the federal government of Nigeria at the United States district court for the district of Columbia.

In the petition dated August 24, 2021, Peter. A. Chiejina and Piccol Nigeria Ltd, the petitioners, asked the court to convert the arbitral award issued on June 7, 2019, against the FG from naira to dollars.

According to the petition, the Nigerian government has made no attempt to pay the award issued two years ago.

Also, the naira has dropped to a third of its value since 2010 — the year when the government allegedly first breached its contract with Piccol Nigeria Ltd. by delaying payments in the middle of a project.

Chiejina, Piccol’s owner, is said to have mortgaged his home in order to keep the construction project alive when Nigeria failed to make interim payments on time.

“Although the Award was denominated in Nigerian naira, the Petitioners request and are entitled to entry of a judgment in US dollars. Issuance of a judgment in dollars when the underlying award is stated in a foreign currency “is the norm rather than the exception,” the petition reads.

“Entering an award in dollars, when requested by the judgment or award creditor, is particularly important in cases such as this, where the foreign currency has dropped precipitously in value over time.

“The naira was worth 0.0066 dollars on October 25, 2010, the date the work stopped, and 0.0033 on June 7, 2019, the date of the Award. It is worth 0.00243 dollars today. And while the future is uncertain, it is unlikely the naira’s fortunes will be reversed.”

The petition said that the arbitration agreement, procedure and award are all valid, and therefore enforceable under the New York Convention and the Federal Arbitration Act.

The United States and Nigeria are parties to the New York Convention, the petition noted.

“Nigeria made no argument about the validity of the agreement to arbitrate below. Indeed, by objecting to arbitration at the Abuja Multidoor Courthouse on the grounds that the parties had agreed instead to arbitrate at the Regional Centre for International Commercial Arbitration in Lagos, Nigeria affirmatively asserted the validity of the agreement,” the petition further reads.

“Nigeria has never suggested that the agreement to arbitrate was invalid or that it or PICCOL lacked capacity to enter into the agreement to arbitrate. In any case, even if Nigeria could raise a question about the validity of the contract between itself and PICCOL, such a challenge would not be enough to draw the validity of the agreement to arbitrate itself into question but would instead be a matter that was for the arbitrator to decide.”

The petitioners asked the district court to issue judgment based on the value of the naira at the time Nigeria was contractually obligated to pay, rather than the date of the award.

At the time, the naira was three times worth its current value.