P&ID Case Lawyers Urge Procurement Reform, Applauds CBN Legal Counsel

By Oluwakemi Kindness

The Federal Government has received critical recommendations from foreign legal counsel who successfully represented Nigeria in the high-profile legal battle against Process & Industrial Developments Ltd. (P&ID), aimed at preventing future contractual disputes.

The legal experts emphasized the importance of implementing robust safeguards when entering into high-value contracts.

Central to their recommendations is the need to strengthen the nation’s procurement processes and ensure comprehensive due diligence on prospective contractors and service providers.

According to the legal team, these measures are essential to avert a recurrence of the challenges faced in the P&ID matter, which had significant financial and reputational implications for the country.

The counsel urged government agencies and officials involved in contract awards to adopt international best practices, including transparent bidding processes, rigorous background checks, and enforceable legal protections.

Shaistah Akhtar, a Partner at Mishcon de Reya LLP, conveyed these insights during a send-off ceremony for the Director of the Legal Services Department of the Central Bank of Nigeria (CBN), Kofo Salam-Alada.

She stated that “these are things to look out for in the procurement process and in the process of awarding these high-value contracts going forward.”

Akhtar acknowledged that despite Nigeria possessing sophisticated anti-corruption and anti-money laundering laws, “things did go wrong in this case, where government officials were bribed. The contract was not as robust as it should have been. It was quite a flimsy contract for such a long-running and high-value transaction.” She added that “there wasn’t any due diligence carried out on the contractors, who were effectively a two-man band and an offshore company with no assets and no track record.”

Speaking about the controversial P&ID case, Akhtar explained that “this was a case where P&ID was a shell company that brought a claim of many billions of dollars against the government in respect of a gas supply and processing agreement, which never broke ground. And the upshot was they obtained an arbitral award, which they were trying to enforce. By the time it got to enforcement, the award was worth around $11 billion, which amounts to around a third of Nigeria’s foreign reserves, and several times its education, health, and security budgets.”

She described the potential liability as “huge.” The government then instructed her firm to challenge the award, and they succeeded in setting it aside after overcoming several hurdles.

Shaistah Akhtar also shed light on the crucial role Salam-Alada played in Nigeria’s success in the P&ID case.

She revealed that “Salam-Alada played a critical role in this case. The case itself was handled as a collective effort from, obviously, the Ministry of Justice, the Central Bank, and the Ministry of Petroleum, which were the parties to the litigation.”

She further explained that “Kofo Salam-Alada was delegated the day-to-day responsibility of dealing with the lawyers. And he played an essential role in terms of giving instructions, obtaining information and ensuring that we as the lawyers had the tools that we needed to pursue this case.”

“And he worked extremely hard over a period of five and a half years with us now, and going above and beyond the call of duty, working all hours and dealing with a number of government agencies and government officials in order to obtain the instructions and the information we needed to pursue this case.”