P&ID AWARD WOULD HAVE CRIPPLED NIGERIA’S ECONOMY – FAGBEMI

The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), has said the controversial arbitral award in the Process and Industrial Developments Limited case could have had a crippling effect on Nigeria’s economy if it had been enforced.

Fagbemi made the remarks at the Heads of Delegations Roundtable of the Chief Legal Advisors Forum 2026 in Singapore, where he called for reforms to the international Investor-State Dispute Settlement system.

The minister said the P&ID case highlighted the need for clearer and more predictable rules governing the calculation of damages in international arbitration.

He noted that the award, which relied on compound interest, had grown to billions of dollars and could have imposed a severe financial burden on Nigeria.

The P&ID dispute arose from a failed 2010 gas processing agreement between Nigeria and Process and Industrial Developments Limited. An arbitral tribunal eventually awarded damages against Nigeria, with the amount growing substantially through accumulated interest.

A UK court later set aside the award in 2023 after finding serious issues surrounding fraud and the conduct of the arbitration. Nigeria subsequently secured further legal victories relating to the case.

Fagbemi said the experience reinforced Nigeria’s position that international arbitration rules should provide greater transparency, consistency and predictability.

He urged reforms that would strengthen domestic courts rather than circumvent them while still protecting legitimate investor interests.

The Attorney General also called for clearer standards on damages calculations, arguing that uncertainty in arbitration awards can undermine confidence among both states and investors.

He said Nigeria would continue supporting reforms that promote fairness, transparency and accountability in international dispute resolution.

Fagbemi maintained that stronger arbitration frameworks would help protect national sovereignty while creating a more predictable environment for legitimate international investment.