American Court issues $8.89bn Default Judgment against Nigeria

A United States District Court on Tuesday issued a $6.59 billion default judgement as arbitral award against the Federal Government [FG], $2.3 billion as interest.

The legal dispute arose over a natural gas supply and processing contract between FG and a US-Based firm — Process and Industrial Developments Limited [P&ID].

The judgement was awarded against Nigeria because the FG reportedly failed to enter a defence.

P&ID on March 16 filed the petition (Process and Industrial Developments Limited V. Federal Republic of Nigeria, et al., No. 1:18cv594, D. D.C.), to confirm a $6,597,000,000 English arbitral award that was earlier issued in its favour in London.

According to sources, the failure of Nigeria government to show up in court to defend itself led to the presiding Judge giving a default ruling which is a binding judgment in  favour of (P&ID).
“Most often, a default judgment is in favour of a plaintiff when the defendant has not responded to a summons or has failed to appear before a court of law, which is what happened to the federal government and it’s a very sad scenario, ” an oil industry
source told BusinessDay.

According to sources the firm had a gas supply and processing agreement with Nigeria’s Ministry of Petroleum Resources in January 2010. Pursuant to the agreement, P&ID claims that it would build the necessary facilities and then refine natural gas into non
associated natural gas for a period of 20 years.

The natural gas would be used by Nigeria to power its electrical grid. P&ID was to strip away heavy hydrocarbons known as Natural Gas Liquids (NGLs) in which P&ID would retain the NGLs as payment under the agreement.