By Olu Fasan
LAST week’s judgement by the London Commercial Court quashing the $11bn arbitration award against Nigeria rightly triggered exultant responses across the country. Former President Muhammadu Buhari penned a newspaper article titled: ‘A matter of principle’, in which he described the award as “an attempted heist of historic proportions”, arguing that Nigeria would have forfeited “a third of its foreign reserves” if it had lost the case. Bola Tinubu, the current president, called it a “landmark judgement”. Both Buhari and Tinubu credited their governments for the victory. But they miss two fundamental points.
First, it wasn’t lost on the British judge that Nigeria is a fantastically corrupt country where some politicians and officials conspire with contractors to defraud their country. Second, the judge ignored technicalities and focused on the merits of the case. Fraud and corruption are crimes against society and must not be accorded the protective shield of legal technicalities. Sadly, that’s not how Nigerian courts behave; rather, they put technicalities above substantive justice, they dismiss serious corruption cases on technical grounds.
Take the first point. Justice Robin Knowles, who delivered the judgement on October 23, made some remarks that will resonate with Nigerians. He said the case, between Nigeria and Process and Industrial Developments Ltd., also known as P&ID, ”brought together a combination of examples of what some individuals will do for money; driven by greed and prepared to use corruption, giving no thoughts to what their enrichment would mean in terms of harm for others.” He said Nigerians were let down by “a number of individuals in politics and administration whose duty it was to serve them and protect them.”
As I said, those remarks will strike a chord with most Nigerians. But what Justice Knowles described is a widespread phenomenon not limited to the P&ID case. Truth is, Nigerians politicians and officials have always colluded with contractors to swindle the country of billions, even trillions, of naira. In this column, I have often referred to Dr. Ngozi Okonjo-Iweala’s internationally-acclaimed book, Fighting Corruption Is Dangerous. Indeed, I urge anyone who wants to know the true nature of public corruption in Nigeria to read that book, an account of Okonjo-Iweala’s experience as a two-time finance minister.
In a chapter titled “Opaque Deals and International Scams”, Dr. Okonjo-Iweala extensively describes the problem of contract frauds in Nigeria. She says that politicians and officials commonly award contracts with a view to defaulting on them for personal gains. She says the arrangement involves connivance between contractors, government officials and the courts, describing it as “an unholy alliance where amounts owed by government, interests and penalties were inflated and all parties shared in the proceeds after payment”. But if you think this practice is dead, you are wrong. Recently, Ola Olukoyede, the new chairman of the Economic and Financial Crimes Commission, EFCC, said: “Between 2018 and 2020, Nigeria lost N2.9 trillion to contract and procurement frauds.” That’s just within two years!
Responding to the P&ID judgement, Tinubu said Nigeria “would no longer be held hostage by economic conspiracies between private firms and solitary corrupt officials”. First, he’s wrong: the P&ID case and similar contract frauds in Nigeria did not involve “solitary corrupt officials”; rather, as Okonjo-Iweala’s book shows, they involve a network of politicians, officials and even judges. Secondly, studies show that there’s a relationship between big government and public corruption.
When a government is spending massively on contracts and procurements, corruption is not far-fetched, especially in a country like Nigeria where government pays lip service to due process and procurement rules. Thus, it’s utterly irrational and misguided to expect contract and procurement frauds to diminish under Tinubu’s big-spending government; instead, they will fester amid multi-billion-naira contract awards, procurements and other expenditures.
What about the second takeaway from the P&ID case? Well, truth is, the Buhari government’s initial handling of the case was shambolic and incompetent. It didn’t appeal the arbitration tribunal’s final award made in 2017 until several months after the 28-day deadline. Crucially, Nigeria didn’t make allegations of bribery and corruption when it eventually appealed the tribunal’s award at the Commercial Court in October 2018.
It was only after Justice Christoper Butcher granted P&ID’s application to enforce the arbitral award in September 2019 that Nigeria sought permission to appeal the enforcement order, making allegations of bribery and corruption. Justice Butcher granted Nigeria’s application to appeal and ordered a stay of enforcement until the determination of the appeal. He refused to allow technicalities, such as Nigeria’s failure to meet deadlines, to stand in the way of justice.
In December 2019, Nigeria filed an application asking the Commercial Court to set aside the arbitration award on the grounds that it was procured by fraud, corruption and perjury. Now, anyone who followed the case closely after Nigeria filed that application would agree that the judge bent over backwards to allow Nigeria to prove its case. On many occasions, the court granted Nigeria’s applications for “the extension of time” and for “further disclosure and related orders and anotice to prove documents”. At all times, the court’s disposition was to let Nigeria file documents “that will throw relevant light on the case”.
By contrast, Nigerian courts are fixated on technicalities even in matters of serious public policy concerns, such as corruption. In 2022, Abdulrasheed Bawa, then chairman of EFCC, expressed deep frustration that several high-profile corruption cases were lost on technicalities. As he put it, “defendants who obviously have stolen our commonwealth and those who have aided and abetted them have been allowed to go home to enjoy their proceeds of crime on technical grounds”. Were English courts to fetishise technicalities as Nigerian courts do, the pivotal victory in the P&ID case would have eluded this country.
As Africa’s largest economy, Nigeria should be a hub for international commercial arbitration or litigation. Well, it’s not because its judiciary is regarded as corrupt and dysfunctional. In one report, the US Trade Representative, USTR, says: “The sanctity of contracts is often violated and Nigeria’s court system for settling commercial disputes is weak and sometimes biased.” No foreign investor will ever agree to settle disputes in Nigeria if they invest at all.
Nigeria won the P&ID case thanks to Britain’s independent and incorruptible judiciary. But some corrupt politicians, officials and judges cause it reputational damage globally, and erode investor confidence!