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Reps Begin Probe Of P&ID Contract

The Ministry of Petroleum Resources of the Federal Republic of Nigeria was not suppose to be sued by P&ID, the right company to sue the Ministry of Petroleum Resources was P&ID Nigeria limited.
But the problem is P&ID Nigeria limited did not enter contract with the Ministry of Petroleum Resources.
The Contract was signed by P&ID,though negotiation was done by P&ID Nigeria limited.
The P&ID was registered in the British island as stated in the exhibit 5

Did the company meet the requirement to do business in Nigeria
For a foreign company to set up in Nigeria, there are basically 5 mandatory steps:

Step 1

Incorporation of a Limited Liability company with a share capital of N10m (Ten Million Naira) at the Nigerian Corporate Affairs Commission (CAC).

All companies intending to operate in Nigeria must be registered with the CAC. The minimum share capital which a company must have is N10,000. However, for Foreign owned companies, the minimum share capital is N10,000,000 (Ten Million Naira). The process to register is fairly straightforward, and normally takes about 2-4 weeks.

Step 2

Obtain a Tax Identification Number and register for Value Added Tax at the Federal Inland Revenue Service – TIN and VAT Registration.
Step 3

Open Domiciliary Bank Account with a Commercial Bank in Nigeria and obtain Certificate of Capital Importation.

Step 4

Registration at the Nigerian Investment Promotion Council (NIPC).

Step 5

Obtain a Business Permit from the Nigerian Ministry of Internal Affairs.

And there you have it, the 5 steps to setting up a foreign owned business in Nigeria. Once this is done, the next phase is to ensure that you comply with all business operation regulations. For instance, depending on the nature of the business you have set up, you might be required to register with certain regulatory bodies.
Published on September 19, 2019 By Kauthar Anumba-Khaleel

The House of Representatives has begun the investigation of the controversial gas contract awarded to Process and Industrial Development (P&ID) Limited and the $9.6 billion judgement fine imposed on Nigeria by a United Kingdom (UK) court.

The Lower House’s action followed the adoption of a motion of urgent national importance on the need to look into act of negligence of the P&ID’s transaction by the Ministries of Justice and Petroleum Resources respectively, sponsored by Hon. Julius Ihonvbere.

Consequently, the Speaker, Hon. Femi Gbajabiamila, constituted an ad-hoc committee to probe the circumstances surrounding the award of the contract.

Leading the debate, Ihonvbere lamented the judgement debt of $9.6 billion (with daily interest accruing) in the case between P&ID and the federal government.



He said that the judgement was punitive and would have negative effects on the country with a foreign reserve of only $45 billion and a sovereign debt profile of over $80 billion.

Ihonvbere said: “The House is aware of the fact that Nigeria has a penchant for disregarding the sanctity of contracts and terms of agreement, coupled with the failure of Nigeria’s representatives in many cases, to carefully or diligently scrutinise agreements they sign knowing that the consequences will affect past and future generations.



“Nigeria had entered into a Gas Supply and Processing Agreement (GSPA) with P&ID Limited in January 2010 through the Ministry of Petroleum Resources with the understanding that Nigeria would supply natural gas (wet gas) at no cost, through a government pipeline to P&ID’s production facility, while P&ID in return would construct and operate the facility, process the wet gas and return to the government of Nigeria lean gas for the generation of power at no cost to Nigeria.

“Further aware that two years down the line, P&ID had not built any gas plant to which Nigeria could supply wet gas for processing, signifying in the first place that the move to arbitration was opportunistic and grossly self-serving.

“The House is cognisant of the fact that the matter went before an Arbitration Tribunal, under the rules of the Nigerian Arbitration and Conciliation Act 2004, with London, England as place of arbitration. After affirming its jurisdiction in the matter, the tribunal began hearing to determine whether or not there was any repudiatory breach of contract.

“At this point, there was an attempt by the Ministry of Petroleum to reach a settlement agreement with P&ID Limited to the tune of $850 million, payable in instalments, which obviously was not diligently pursued,” he lamented.



The lawmaker continued, “the House is alarmed that the agreement was somewhat shrouded in secrecy and as such apparently dubiously procured, as those who ought to know about its existence did not and more importantly, the relevant laws in Nigeria for the transaction to be consummated was not applied especially, Part IV of the Bureau of Public Procurement Act 2007 which deals with the Fundamental Principles of Procurement.

“The House is further alarmed that it took the new Nigerian government more than four months to respond to the vital arbitration judgement of about $9.6 billion with a ridiculous excuse that there had been a change of administration in Nigeria and that ministers, including the attorney-general had only just been appointed thus asking for an extension of time to act on the outcome of the Arbitration Tribunal.


“Rather than engage P&ID in the matter before the tribunal with robust legal arguments and interpretations, Nigeria was busy shopping for a favourite forum to plead her case in a court in Lagos, Nigeria.

“The House is worried that the lack of diligent prosecution of cases in which Nigeria is involved by those whose duty it is to do so, is due to our tendency to either politicise everything or focus more on personal interests, or failure on the part all parties involved,” he noted.

The lawmaker further observed that that Butcher, J. (the judge in the matter) in his August 16, 2019 ruling made heavy weather out of several acts of omission on the part of the Nigerian authorities, especially when he noted that “…the FRN had remedies for procedural unfairness, but it did not utilise them.”

He argued that Nigeria could also have objected to Procedural Order No. 12 or questioned the Final Award. In the words of Butcher J, “it did neither and the time for doing so is long past.”

Ihonvbere maintained that “these are serious indictments on the incompetence and gross negligence displayed by our representatives/agents/arbitrators in the matter.”

Thereafter, the House resolved to probe that the “embarrassing judgement,” which it described as exposing “a deep decay in our governance and leadership infrastructure with far-reaching implications for the credibility of the country’s capacity to handle business and legal cases.”
https://leadership.ng/2019/09/19/reps-begin-probe-of-pid-contract/

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