It has been described as one of the most extraordinary cases ever to come before the high court, involving an Irish impresario, an alleged $50,000 bribe stuffed into a bag and potentially one of the biggest payouts in legal history.
The saga of two Irish businessmen, Michael Quinn and Brendan Cahill, who promised to revolutionise Nigeria’s energy sector, will be at the centre of a high court trial early next year.
It is claimed the two men’s hopes of a 20-year project to provide plentiful supplies of electricity for the country were dashed when Nigeria failed to build the required infrastructure.
The arbitration courts in London later awarded the small offshore firm set up by the two men for the project an award now worth £8.3bn because it was claimed Nigeria effectively reneged on the deal.
The huge award for the gas company, Process & Industrial Developments (P&ID), is more than 10 times Nigeria’s national health budget. The country’s government is now seeking for the award to be overturned.
The case has become a cause célèbre in Nigeria where officials now allege the gas deal was corruptly procured and the subsequent arbitration proceedings were “tainted” by claims of collusion.
Helen Taylor, a legal researcher at the charity and campaign group, Spotlight on Corruption, said: “What is so extraordinary about this case is the allegation that P&ID not only procured the gas contract through bribery, but then used sham arbitration proceedings to cash out the proceeds.
“Whatever its outcome, the case raises serious questions about whether the secrecy of arbitration can be abused to shield corporate criminality from public scrutiny.”
A high court judge permitted Nigeria an extension of time to challenge the award in September 2020 after concluding there was evidence the contract was procured by bribery and that arbitration proceedings were tainted. These issues will be disputed by P&ID at trial.
P&ID was founded in 2006 by Michael Quinn, a former music manager from Dublin, and his business partner Brendan Cahill.
Quinn, who died in 2015, trained as a mechanic but rose to local prominence in the music business, managing such acts as Daddy Cool & the Lollipops and Maxi, Dick and Twink. He is also reported to have funded a tour of Ireland by Diana Ross and the Supremes.
He expanded into other businesses and by the 1990s was involved in bidding for military contracts in Nigeria. Quinn and Cahill reportedly won contracts to repair Scorpion tanks in the country and another deal to repair jets for the Nigerian air force.
The proposed gas deal in Nigeria at the centre of the high court case involved processing “wet gas”, which was being wastefully flared into the atmosphere during the extraction of oil, with the construction of a gas plant initially proposed at the port city of Calabar.
P&ID offered to process it into “lean gas”, which it would provide free to Nigeria for electricity. The company would have made its profits from the sale of the natural gas liquids it would extract during processing.
The 20-year deal was agreed in January 2010, but P&ID says Nigeria failed to deliver its commitments on building the required infrastructure.
The dispute went to arbitration proceedings in London in 2012, and five years later a tribunal handed down the award of $6.6bn (£5.5bn) plus interest at 7% per annum. The total award is now in excess of £8bn.
Investigators in Nigeria have since claimed to have uncovered a trail of bribes, kickbacks and deception.
The west African country’s government has claimed in the court proceedings that at one P&ID meeting a black bag was dropped into the car of a Nigerian official which contained $50,000 in cash. The claim is denied by P&ID, which is based in the British Virgin Islands.
The barrister for the Nigerian authorities has also alleged in court that the arbitration case had been deliberately “thinly” defended by Olasupo Shasore, counsel for Nigeria, and that he had colluded with P&ID. Shasore has responded to the claims, saying they are “falsehoods”, and he made every effort to defend and vindicate his client.
A high court judgment in September 2020 found there was strong evidence the contract was procured by bribery to officials and there was a prima facie case that arbitration proceedings were tainted by the conduct of Shasore.
The Nigerian government says after arbitration, P&ID was purchased by Lismore Capital and VR Advisory Ltd, an investment fund.
Lismore Capital, a litigation funding firm, is owned by a leading commercial lawyer, Seamus Andrew, who represented P&ID in the arbitration proceedings.
A spokesperson for P&ID said: “The allegations of wrongdoing are denied, including the bribery of state officials. There was no collusion in the arbitration hearing in London to ensure P&ID would win the case.
“P&ID won because it had a strong case for breach of contract and FRN had no defence to that claim.”
A spokesperson for the government of Nigeria said: “The Federal Republic of Nigeria keenly awaits the opportunity to present its case before the high court in January 2023 and is confident that justice will finally be served. As this case is ongoing, it would be inappropriate to comment further.”
Andrew, who specialises in commercial litigation and once defended a copyright claim by Star Wars creator George Lucas, had declined to comment on the “precise division” of any award.
He said: “I am unable to comment on evidence in a case that is to go to trial, but can say that any claims of collusion in the arbitration proceedings are strenuously denied.”
Priti Patel, the home secretary, has previously publicly intervened in the dispute before the corruption allegations were aired, urging in an article published in November 2018 for Nigeria to pay its debts to P&ID.
A spokesperson for Priti Patel said: “Given the ongoing legal dispute, it would be inappropriate to comment on this case.”
