The Supreme Court of the United Kingdom in a unanimous judgment has granted a reprieve to the Nigerian National Petroleum Corporation (NNPC), over a $100 million bank guarantee in a case involving the corporation and a service company, IPCO (Nigeria) Limited.
This Pardon is the latest in the protracted dispute arising from the contract between NNPC and IPCO for the construction of the Bonny Export Terminal (BET) Project in Port Harcourt, Nigeria.
NNPC said IPCO had referred its claims to arbitration in Nigeria and obtained an Arbitral Award of US$154 million in 2004, with annual interest running at 14%, leaving NNPC with no option than to promptly challenge the award at the Federal High Court in Lagos.
The corporation explained that the development is a significant decision in the history of the case as the English Supreme Court has not only discharged NNPC from the responsibility to sustain the additional security of US$100 million in favour of IPCO but it also further reiterated the finding of the English Commercial Court and the Court of Appeal that NNPC has a good prima facie case that IPCO procured the Arbitral Award by fraud.
NNPC Group Managing Director, Dr Maikanti Baru, said he was delighted on the new development, commending the efforts of the legal team that secured judgment in favour of the Corporation.
Baru said no stone would be left unturned to extricate NNPC from encumbrances that may impede the Corporation’s access to hard earned funds which are much needed to execute developmental projects by the various tiers of government in the country.
Additionally, the decision of the Supreme Court has clarified conclusively the limits of an enforcing Court’s power to order security as a condition on the right to have a decision of a properly arguable challenge under the New York Convention 1958 and the English Arbitration Act 1996, NNPC added.
NNPC noted that since 2004, IPCO has repeatedly sought to enforce the award in England prior to the conclusion of NNPC’s challenge of the Arbitral Award in Nigeria.