Commercial transactions not only involve huge investments but also go a long way to determine the development of the economy. A great degree of skill and honesty is required in business dealings, particularly when dealing with international investors. This explains the reason international commercial arbitrations are frequently utilized in developed states as a dispute resolution method of choice in energy contracts and transactions involving huge capital and investments.[1]

The Process and Industrial Developments Ltd v Federal Republic of Nigeria (P&ID) is instructive in this article. The issues in the case bordered on non-performance of contract, the seat of arbitration, and the effect of the enforcement of an arbitration award tainted with bribery, fraud, and corruption in the procurement of the contract.

Nigeria was adjudged to have breached a contract, awarded to P&ID in 2010 by the country’s Petroleum Ministry for the construction of a gas processing plant in the South-Eastern city of Calabar. One major lesson in the (P&ID)[2] case is for the nation to ensure that contracts entered into by the government are prepared by competent and experienced legal and other experts with an unimpeachable degree of integrity. This article aims to examine the implications of this arbitration triumph for international dispute resolution.

BRIEF BACKGROUND ON P& ID ARBITRATION CASE

Process & Industrial Developments Ltd (P&ID) and the Nigerian Ministry of Petroleum Resources signed a 20-year gas supply and processing agreement (GSPA) in 2010. The dispute arose from the Gas Supply and Processing Agreement (GSPA) signed in 2010 between Process & Industrial Developments Ltd (P&ID) and the Nigerian Ministry of Petroleum Resources. Under the GSPA, Nigeria was to supply natural gas (“wet gas”) to P&ID, which would in turn construct and operate gas processing facilities in Cross River State. However, the project never materialised. P&ID claimed that Nigeria failed to make the required arrangements for gas supply, including failure to construct necessary pipelines and associated infrastructure

P&ID issued an arbitration against Nigeria, accusing Nigeria of failure to perform its obligations under the GSPA. In January 2017, the tribunal rendered a final award against Nigeria, finding it liable to pay damages of US$6.6 billion. By the time the English High Court delivered its judgment in October 2023, the award had a value exceeding US$11 billion, including interest.

Nigeria first attempted to set aside the partial award on liability before the English courts in 2016, but was unsuccessful. P&ID began enforcement proceedings of the final award in 2019. Following successful actions for discovery against P&ID in various courts internationally, in December 2019, Nigeria applied to set aside the final award and to challenge enforcement based on new evidence that the GSPA itself and the award had been procured by fraud. In 2020, Nigeria obtained an ‘unprecedented’ extension of time from the English court under Section 70(3) of the Act[3] to apply to set aside the award. Sir Ross Cranston[4] decided that there was a ‘strong prima facie case’ of fraud and that Nigeria had not made any deliberate decision not to investigate the fraud.[5]

KEY PRINCIPLE AND DOCTRINE CONSIDERED IN THE CASE

 

1. Principle of Substantial Injustice: The court re-established critical emphasis on the concept of substantial injustice, where it noted that it was not enough for the irregularities to merely exist; they had to rise to a level where they caused substantial injustice to the aggrieved party in this case, Nigeria. The court deemed the cumulative impact of the aforementioned irregularities as not merely injurious but of such a magnitude that it surpassed what could reasonably be expected in an arbitral process. What this holds in arbitral proceedings is the magnitude of injustice, which will determine the award.[6]

1. The Doctrine of Separability: The court also clarified the distinction between the question of jurisdiction and the GSPA itself, emphasizing that Section 68(2)(g) pertained to the award’s procurement, not the contract’s substance. This clarification delineated the boundaries within which the court’s scrutiny operated, emphasizing the separation of these crucial elements. Relying on this, it is established that to determine the doctrine of separability between the contract and Jurisdiction, reference is made to issues raised by parties as affecting the substance of the contract or the issue of jurisdiction.[7]

IMPACTS ON INTERNATIONAL DISPUTE RESOLUTION

a. INTEGRITY IN ARBITRATION: The P&ID case has a big influence on international dispute resolution because it confirms that national courts would invalidate arbitral decisions and fraudulent contracts that were gained by bribes. This strengthens the integrity and moral principles of the international arbitration system.[8]

b. FRAUD PREVENTION: The case is regarded as one of the most significant court cases in Nigerian history and acts as a warning against such attempts in the future. Nigeria has won one of the biggest legal battles in its history.

c. LEGAL PRECEDENT: Three arbitration awards were made in favour of P&ID against the Federal Government of Nigeria by a London tribunal on the 3rd of July 2014, 17th of July 2015, and 31st January 2017, respectively. Upon conducting a late investigation, the issues of fraud and bribery were raised after the initial sum of $6.6 billion, which accumulated to $11 billion in 2021, had been awarded against Nigeria. The 140-page judgement followed an eight-week hearing earlier in 2023 in which the Nigerian Government argued that it should not be required to honour the award as a result of fraud and bribery discovered in the contract. The Court quashed the judgment against P&ID and gave its verdict in favour of Nigeria on the 23rd of October, 2023. The case has fundamentally altered arbitration as we know it and rekindled debates about its applicability and feasibility, especially when it comes to investor-state disputes.[9] This serves as a form of legal precedent for future litigants in international dispute resolution.

The reputation and track record of the well-known global Alternative Dispute Resolution Centres remain an attraction to arbitration users in Nigeria. However, cases such as Nigeria v P&ID presented high economic stakes and public policy considerations, which underscore the need to develop the capacity of alternative dispute resolution centres across Africa in order to provide a viable forum for settling arbitration disputes.

In international arbitration, especially in common law jurisdictions, the panel generally refrains from stepping in to defend a party. According to this viewpoint, the parties have chosen their own arbitrator, agreed to arbitrate their disagreements, and ought to accept the repercussions of their choice. A sobering illustration of when the general approach fails is provided by the ruling in Nigeria v. P&ID. The English courts acknowledge that the particulars of each case determine the proper method for the tribunal’s balancing act under Section 33. A tribunal must assess all relevant facts and take into account the case’s circumstances when deciding what procedural decisions to make and how interventionist they should be.[10]

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[1] A Redfern, N Blackaby, C Partasides & M Hunter, Redfern and Hunter on International Arbitration-Student Version (5th edn, New York USA: Oxford University Press, 2009) 1.

[2] [2019] EWHC, 2241 (Comm.).

[3] The Arbitration Act, 1996

[4] A former High Court Judge of the Queen’s Bench Division. He was the judge who heard Nigeria’s application for an extension of time

[5] https://www.nortonrosefulbright.com/en/knowledge/publications/8d1c52b3/nigeria-v-pid accessed October 31, 2025

[6] https://wtsblackwoodstone.com/p-id-case-nigerias-impact-in-international-arbitration-proceedings/ accessed October 30, 2025

[7] https://wtsblackwoodstone.com/p-id-case-nigerias-impact-in-international-arbitration-proceedings/ accessed October 30, 2025

[8] https://www.afronomicslaw.org/category/analysis/nigeria-v-pid-and-its-effect-uncitral-model-law-arbitration#:~:text=Justice%20Robin%20Knowles’%20decision%20in,reform%20of%20ISDS%5B3%5D. accessed October 31, 2025

[9] https://www.afronomicslaw.org/category/analysis/nigeria-v-pid-and-its-effect-uncitral-model-law-arbitration#:~:text=Justice%20Robin%20Knowles’%20decision%20in,reform%20of%20ISDS%5B3%5D. accessed October 31, 2025

[10] https://www.nortonrosefulbright.com/en/knowledge/publications/8d1c52b3/nigeria-v-pid accessed October 30, 2025

Written by Adewale Adetokunbo and Kareema Mohammed for The Trusted Advisors

Email us: info@cms.trustedadvisorslaw.com

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