Nigeria seeks bank documents to overturn to overturn $9.6 billion P&ID case
By William Clowes
28 April 2020
Nigeria is seeking documents from 10 banks, including Citigroup Inc. and JPMorgan Chase & Co., in a bid to overturn a $9.6 billion arbitration award related to a business deal that the country contends is shrouded in allegations of corruption.
Nigeria has asked a federal court in New York for permission to subpoena information about transactions involving government officials, including former President Goodluck Jonathan. The politicians were in office when the state signed a contract with Process & Industrial Developments Ltd., and later became involved in a costly dispute with the company.
“There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria,” Attorney General Abubakar Malami said in court filings submitted on March 24.
Nigeria’s chances of annulling the giant penalty hinge on proving the 2010 gas supply arrangement was a sham designed to fail by P&ID and government officials. The saga became a full-blown crisis for Nigeria last August when a U.K. judge ruled P&ID could enforce an arbitration tribunal’s 2017 ruling, now totaling $9.6 billion including interest, which found the country breached the agreement.
A spokesman for P&ID denied wrongdoing, arguing that Malami has “manufactured a claim of fraud and bribery” to evade the state’s legal obligation to pay what amounts to about 30% of the country’s foreign reserves.
Malami’s application is “nothing but an absurdly overbroad fishing expedition,” P&ID said in an April 24 court filing.
Jonathan hasn’t been informed of the application, his spokesman said. Malami didn’t respond to request for comment about the court proceedings.
Nigeria is seeking the bank documents as part of an internal investigation into the contract and the arbitration proceedings. The findings will form the basis of the U.K. appeal.
P&ID “had no ability or intention of ever performing” the contract, which required the company to build a gas processing plant and the government to supply it, Malami said.
Nigeria wants the U.S. court’s permission to obtain information from the banks relating to companies and individuals affiliated with P&ID, as well as former government officials, to aid the ongoing investigation by the country’s Economic and Financial Crimes Commission.
The 10 institutions are likely to have processed U.S. dollar transactions connected to P&ID’s operations, as either correspondent banks or the New York branches of foreign lenders, the filings said.
U.S. District Judge Lorna Schofield allowed Nigeria to send copies of its application to the banks, eight of which had been served by April 15, according to filings. The court, however, hasn’t decided whether to give Nigeria access to the financial documents.
The country’s request may run into opposition from the banks. JPMorgan complained in a court filing that it has “substantial concerns about the breadth of the proposed subpoena.”
Nigeria is seeking documents from lenders including Citigroup and JPMorgan, as well as the New York branches of Deutsche Bank AG and United Bank for Africa Plc.
Citigroup and Deutsche Bank declined to comment on the case, while JPMorgan and UBA didn’t respond to emails and calls.
The country’s anti-graft agency is probing the roles of two former oil ministers, the late Rilwanu Lukman and his successor Diezani Alison-Madueke, according to Nigeria’s court filings. Lukman signed the contract while Alison-Madueke was responsible for the “flagrant mishandling” of the government’s arbitration strategy until 2015, the country said.
The EFCC hasn’t yet found “direct evidence” the politicians received payments from P&ID or its affiliates, the country said in its court filings.
Malami’s application “is wild speculation and no evidence exists” to back it up, P&ID said.
A lawyer for Alison-Madueke in a separate EFCC investigation said he hadn’t been briefed on the government’s application to the U.S. court. Another lawyer for Diezani didn’t respond to calls and messages.
Although the attorney general didn’t mention Jonathan as a subject of the EFCC probe, the former head of state appears alongside the ex-ministers in Nigeria’s proposed subpoenas.
The request includes “all documents concerning any transactions to, from, or for the benefit” of Jonathan and his wife between 2009 and the present day.
Jonathan led Nigeria from May 2010 – several months after P&ID sealed the contract – until he lost an election five years later to the current head of state, Muhammadu Buhari. The vote that brought Buhari and Malami to power ended 16 years of rule by the political party in which Jonathan, Alison-Madueke and Lukman were leading figures.