London, United Kingdom – A former Nigerian civil servant could receive a portion of an enormous sum of damages if a British court rules against the West African nation, in a landmark case centred on a multi-billion dollar gas deal.
As part of an arrangement that Nigeria’s government calls “extraordinary” and “corrupt”, Grace Taiga, the petroleum ministry’s former head lawyer, hopes to share in the record-breaking $11.4bn awarded to the offshore company Process & Industrial Developments (P&ID) before England’s High Court.
Court filings and testimonies seen by Al Jazeera show that Taiga is one of three Nigerians who stand to make money if the court orders Nigeria to pay the award – an outcome that could severely damage the country’s economy. The other two are the businessmen Adetunji Adebayo and Mohammed Kuchazi.
In January 2017, a London-based arbitration panel ruled that Nigeria pay $6.6bn to P&ID as compensation for breaching the contract awarded in 2010. That amount has since ballooned to $11.4bn with interest. But Nigeria has refused to pay, claiming P&ID bribed officials including Taiga to secure the gas contract.
In an eight-week trial that ended in March this year, the government petitioned the High Court to invalidate the arbitration award. The court’s decision is expected within weeks.
Analysts say if Nigeria is ordered to pay the damages, its economy could be severely damaged.
“The negative shock would be monumental,” Olusegun Vincent, associate professor of finance at Pan-Atlantic University in Lagos State, told Al Jazeera. “It may take us back to the pre-1999 military era, when Nigeria wasn’t creditworthy,” he said, pointing to the risk that the government would be unable to pay its debt.
‘The P&ID scam’
This scandal began in the late 2000s when the administration of then-President Umaru Musa Yar’Adua planned to address Nigeria’s energy supply crisis by exploiting vast untapped gas reserves in its mineral-rich Niger Delta region.
Seizing the opportunity, P&ID pitched an ambitious project to the petroleum ministry, to build and operate a gas-processing plant near the southern city of Calabar despite having never undertaken a project like that before.
Taiga was at the centre of negotiations: She worked on the contract wording, recommended to the late Rilwanu Lukman, the petroleum minister then, that he sign a memorandum of understanding with P&ID in 2009, and witnessed his signing of the gas contract the following year.
Under the terms of the agreement, the government would provide wet gas to P&ID for free over 20 years. The two parties would then split the processed resource, with the government using its share to help power the country’s energy grid.
But the project never got off the ground. P&ID never built the plant and Nigeria never provided the company with any gas. P&ID blamed the government for the failure and convinced an arbitration panel it had been wronged.
The panel awarded the company damages equivalent to the total hypothetical profit the company would have made over the lifespan of the contract – $ 6.6bn plus interest of $1.3m per day from the time the contract was breached.
Evidence later emerged that Taiga had received close to $10,000 from individuals and companies linked to P&ID ahead of the contract signing. Before the High Court, Taiga acknowledged having received money but said that these payments were merely gifts from a family friend, P&ID co-founder Michael Quinn.
P&ID said it had done everything in its power to make the project work. However, its inexperience and Taiga’s receipt of undisclosed funds eventually led the Nigerian government to believe that it had been the victim of an elaborate fraud.
Addressing the United Nations General Assembly in 2019, then-President Muhammadu Buhari vowed to confront “the P&ID scam”, which he said was “attempting to cheat Nigeria of billions of dollars”.
Anticorruption campaigners seem to agree with him.
“The story of how a small offshore company with no meaningful track record, no website, and only a handful of employees managed to win a multibillion-dollar gas contract raises red flags for corruption that call for careful scrutiny,” Helen Taylor, senior legal researcher at the British NGO Spotlight on Corruption, told Al Jazeera.
The High Court will adjudicate these points. If Nigeria loses the case, the country would be legally bound to pay P&ID what amounts to eight times its 2023 federal health budget.
‘Part of the family’
How the proceeds would be divided, meanwhile, has long remained confidential. Taiga, who had previously denied in affidavits that she would receive any money from the award, finally told the High Court under oath on February 16: “I do have expectations.” Asked by Nigeria’s lawyer how much she expected P&ID co-founder Brendan Cahill to share with her, she said: “I did not put my mind on a particular ceiling.”
In one document dated October 2017, Cahill recorded a “commitment” of $200,000 to Taiga; in another, dated May 2019, the figure was put at $500,000. Al Jazeera has seen both documents, which form part of the evidence before the High Court. Cahill, an Irish businessman who founded P&ID alongside the now-deceased Michael Quinn, said that these were not firm commitments. “I sought to reassure her that she would be looked after to some degree,” he told the court. “I didn’t specify how or when.”
In court, Taiga denied having secretly helped Quinn and Cahill when she handled the gas contract at the petroleum ministry. But she added that she now saw herself as “part of the family” that is P&ID.
“It’s remarkable that this Nigerian government official who helped broker the controversial gas deal with P&ID now belongs to the close-knit beneficiaries of this opaque offshore company,” said Taylor. “Far from clearing up this conflict of interest, the obscure arrangements for paying her a cut of P&ID’s profits are deeply compromising to her credibility as a former public official.”
A billion-dollar promise and ‘lots of uncertainty’
For his part, Adetunji Adebayo, executive chairman of Nigerian gas company GFD Energy and middleman for P&ID during settlement negotiations with the government, could be entitled to $1.4bn. In an affidavit dated May 2022, Cahill wrote that “Mr Adebayo was promised 10 percent of the income from the arbitration” but added that there was still “a lot of uncertainty around the amount, if any, that will be paid out.”
Adebayo did not appear before the High Court.
Mohammed Kuchazi, who as P&ID’s commercial director assisted the firm in its relationship with the petroleum ministry, told the court that he believes himself to be entitled to 3 percent of the award – some $340m – as per an agreement he said he reached with Quinn. Cahill confirmed the existence of that deal in his affidavit.
In his own affidavit, Kuchazi wrote that he had been friends with Lukman, the minister, since the 1960s. Before entering business, Kuchazi had been a Nigerian politician.
Asked for further comment, Kuchazi’s lawyer Eric Ifere told Al Jazeera that his client’s entitlement to “a 3 percent commission” was supported by a written agreement with P&ID. He declined to share that document.
The Nigerian government has accused Adebayo and Kuchazi of having bribed Nigerian officials on P&ID’s behalf. The company and Kuchazi denied the accusations before the High Court.
Adebayo, Taiga, and P&ID did not respond to Al Jazeera’s requests for comment.