The Supreme Court of the United Kingdom in a unanimous judgement has granted reprieve to Nigerian National Petroleum Corporation, Nnpc, over a $100million Bank guarantee in a case involving the corporation and a Service company, IPCO (nigeria) Limited.
The reprieve was the latest in the protracted dispute arising from the contract between NNPC and IPCO for the construction of the Bonny Export Terminal (BET) project in Port Harcourt, Nigeria.
IPCO had referred it’s claims to arbitration in Nigeria and obtained Arbiral Award of US$154million in 2004, with annual interest running at 14%, leaving NNPC with no option than to promptly challenge the award at the Federal High Court in Lagos.
NNPC Group Managing Director, Dr Maikanti Baru, said be was delighted at the new development, commending the effort of the legal team that secured judgement in favour of the corporation.
Dr Baru said no stone would be left unturned to extricate NNPC from encumbrances that may impede the Corporation’s access to hard earned funds which are much needed to execute developmental project by the various tiers of government in the country.
The development is a significant decision in the history of the case as the English Supreme Court has not only discharge NNPC from the responsibility to sustain the additional security of US$100million in favour of IPCO but it also further reiterated the finding of the English Commercial Court and the Court of Appeal that nnpc had 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 property 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 NNPC’s challenge of the Arbitral Award in Nigeria.