The Supreme Court of the United Kingdom, in a unanimous judgment, has granted a reprieve to the Nigerian National Petroleum Corporation over a $100m bank guarantee in a case involving the corporation and a service company, IPCO (Nigeria) Limited.
The reprieve, according to a statement by the corporation on Tuesday, was the latest in the protracted dispute arising from the contract between the NNPC and IPCO for the construction of the Bonny Export Terminal project in Port Harcourt, Rivers State.
IPCO had referred its claims to arbitration in Nigeria and obtained an arbitral award of $154m in 2004, with annual interest running at 14 per cent, leaving the NNPC with no option than to challenge the award at the Federal High Court in Lagos.
The Group Managing Director, NNPC, Dr. Maikanti Baru, said he was delighted about 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 the NNPC from encumbrances that might impede the corporation’s access to hard earned funds needed to execute developmental projects by the various tiers of government in the country.
The statement read in part, “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 $100m in favour of IPCO, but it also further reiterated the finding of the English Commercial Court and the Court of Appeal that the NNPC has a good prima facie case that IPCO procured the arbitral award by fraud.
“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.
“Since 2004, IPCO has repeatedly sought to enforce the award in England prior to the conclusion of the NNPC’s challenge of the arbitral award in Nigeria.”