183. If it had been necessary to decide the issue, it seems to me that Mr Howard has the best of the arguments. It is a fundamental principle of our law that, as Lord Bingham said in HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6, [2003] 2 Lloyd’s Rep 61 refer-ing to what Rix LJ had said in the Court of Appeal – that fraud is a thing apart, it unravels all: [15].
There seems to be no reason why the finality of arbitration awards should be afforded greater importance than the finality ofjudgments in circumstances of fraud.
The statutory bar in section 73 is limited to irregularities discoverable during the arbitration. Othenwise, the effect of section 81 (1) of the Act is to preserve the right to challenge the enforcement of an award on public policy grounds under the common law. As Mr Howard contends, there is no reason to interpret the Act so that Takhar is confined to conunon law public policy challenges and not to those under section
196. In my view there is a strong case that the GSPA was procured by bribery. It is sufficient to focus on the two senior officials whose positions ensured its safe passage by giving the requisite approvals.
First, there is Ms Taiga, ‘Who was the senior legal adviser to the Ministry at the time of the GSPA and recommended its execution. In their second statements both Ms Taiga and Mr Cahill accept that payments were made to her by P&lD, but their account is that they were intended for Ms Taiga’s medical expenses.
There is no supporting evidence for this, such as contemporaneous communications between P&lD and Ms Taiga refering to her medical needs.
197. In any event, whether these payments were for medical or other expenses, as the Attorney General explains in his seventh statement, benefits received by public officials from individuals holding or seeking to obtain a contract are assumed to be bribes under the Corrupt Practices and Other Related Offences Act 2000 and the Nigerian Constitution.
Further, as he explains in his sixth statement, Ms Taiga’s annual salary was US$5,000.
The total amount paid to Ms Taiga from 2009 was many times that amount.
210. In my view Nigeria has established a strong prima facie case that Mr Quinn gave perjured evidence to the Tribunal to give the impression that P&lD was a legitimate business and was able and willing to perform the GSPA.
P&lD then relied on that evidence before the Tribunal in the knowledge of its falsities.
225. In the result there is a possibility that Mr Shasore had been corrupted. At the least I accept Mr Howard’s submission that there is a prima facie case that Mr Shasore made the payments to Mrs Adelore and Mr Oguine to purchase their silence in relation to his conduct of the arbitration and settlement negotiations. There is therefore a prima facie case that the arbitration proceedings were tainted.
226. In my view Nigeria has established a strong prima facie case that the GSPA was procured by bribes paid to insiders as part ora larger scheme to defraud Nigeria.
There is also a strong prima facie case that P&lD’s main witness in the arbitration, Mr Quinn, gave perjured evidence to the Tribunal and that, contrary to that evidence, P&lD was not in the position to perform the contract,
As to the Jurisdiction and Liability stages of the arbitration, there is a prima facie case that they were tainted by the conduct of Nigeria’s advocate, Mr Shasore.
233. It seems to me that Nigeria has made a good case that, at the time it took part or continued to
take part in the arbitration, it did not know and could not with reasonable diligence have discovered
the grounds it now advances. As Mr Howard submitted, it could not reasonably be expected that those now alleged as the key fraudsters – Messrs Quinn (until his death) and Cahill, the principals of P&lD – would have revealed their own fraud. In Mr Cahill’s statement for these proceedings, he added, Mr Cahill now acknowledges that Mr Quinn’s witness statement for the Tribunal contained serious inaccuracies (to put it no higher), but he and his legal representatives did not say anything at the time.
239. In summary, this does not seem to me a case where Nigeria knew, believed or had grounds to suspect so as to have taken further steps as regards the fraud now alleged: Sumakan Ltd v Commonwealth Secretariat [2007] EWCA Civ 1148, [2008] 2 All ER (Comm) 175, [36], [38], [62]. In other words, it seems to me that at this stage Nigeria can rightly claim that it could not with reasonable diligence have ascertained the fraud.
245. On thc one hand P&ID is saying that Nigeria should have investigated fraud more vigorously. but instead took a deliberate decision to pursue settlement, at the same time asserting that no fraud existed.
On P&ID’s own case there was nothing to investigate. Related to this point is that P&lD preqcnting itself as a legitimate commercial company, able and willing to perform the GSPA. thwarted by the failure of Nigeria to provide wet gas, and justifiably engaging in arbitration and legal proceedings in London and New York with the assistance of an international law firm, global financial consultants and, from social media posting I was shown. it seems media consultants as well. Yet somehow the Nigerian authorities should have taken the decision to investigate fraud.
248. Over the years Nigeria certainly pursued settlement, but this was not the type of choice to a party’s advantage referred to in the Kalmneft authorities.
In this case, if fraud was seriously on the cards, it would not have been to Nigeria’s advantage to continue to negotiate rather than to seek to upturn the award by investigating it. In my view Nigeria was seeking a reasonable settlement in light of the size of the damages the Tribunal had awarded. It certainly cannot be said that there an Infonned choice not to investigate a fraud but to pursue a settlement. If Nigena was not to pay the considerable amount av.arded the only informed choice available v.as to seek a reasonable settlement which it could afford.
249. Especially telling in my view is that Nigeria’s international legal advisers, Curtis, underlined in July 2018 that if Nigena wanted to advance fraud to challenge the awards it need to hase concrete evidence. There has been a problem of endemic conuption in Nigena, as the Attorney General concedes, but I accept Mr Howard’s submission that that does not mean that every deal is potentially corrupt in the way, as I concluded, this one pritna facie is.
251. At first blush the speed of the June 2018 EFCC investigation is somewhat troubling. But in terms of reasonable diligence it was not charged specifically with investigating fraud. The Attorney General’s letter to the EFCC of 28 June 2018, containing the President’s instructions, refened not to fraud but to a thorough investigation of the circumstances surrounding the GSPA and the subsequent events.
In my view Mr Mill underplayed the work which was undertaken over the June 201 S-August 2019 period. In particular there was the successful prosecution ofP&ID and P&lD Nigeria on 19 September 2019, based on the groundwork undertaken during this fifteenmonth period.
252. I accept that, compared to what happened after August 2019, it cannot be said that the investigation proceeded with the same sense of urgency. There is also Mr Malami’s letter, which became available after the hearing, and the investigation being carried out into the conduct of Mr Magu as acting head of the EFCC at the time. With respect I find it hard to read the letter as an attack on Mr Magu alone and not on the performance ofthe EFCC under his leadership. Mr Magu’s reference to the staggering volume of work done by the EFCC after June 2018 — if that is what his letter says — might be treated as special pleading.
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253. In my view, however, this does not assist P&lD in its argument that reasonable diligence was lacking. There is certainly nothing to suggest that a deliberate decision was taken in the Takhar sense not to investigate fraud. Nor is there anything to suggest that there was a deliberate decision to proceed slowly. What occurred might have been the EFCC proceeding at its normal pace, in light of the resources allocated to it, the other inquiries it was conducting, and conditions in Nigeria.
254. By comparison the position arter August 2019 might be exceptional and prompted by the sctiOUS position Nigeria faced in the light of Butcher J ‘s decision on P&lD’s enforcement application. At this point it is impossible to say. However, I cannot accept Mr Mill’s submission that there was no proper or diligent investigation. The basic point is that there was no specific information such that Nigeria ought to have become aware of the building blocks of the fraud now alleged.
259. Overall, I accept Mr Howard’s submission that the Nigerian team needed to see the different building blocks to what they now allege as a massive fraud before proceeding with the current claims.
In summary, the time from September 2019 until the proceedings taken in this court in December 2019 was modest and Nigeria’s behaviour reasonable.
260. As alleged by Nigeria, the fraud is complex in character and continuing. Even on my preliminary examination it comprises a number of quite different strands. As frauds typically are, what occurred in this case was deliberately concealed.
Especially with the international advisers it engaged, P&lD wore the cloak of legitimacy. In the circumstances which Nigeria has prima facie established, it acted reasonably in its investigations and in pursuing settlement.
263. The length of the delay is unprecedented. The Liability Award was published approximately four and a half years, and the Final Award some two years and ten months, before the current proceedings were launched.
Mr Howard did not seek to deny the very significant delay. His only point was that the reason for the delay was that P&lD successfully concealed its fraud during the arbitration, and for many years afterwards.
264. Overall, for the reasons I have set out at length, I accept that there was nothing which Nigeria ought to have been aware of to act as a trigger causing a reasonable person, exercising reasonable diligence, to have discovered the alleged fraud.
265. Mr Mill’s argument that there was no crediblc casc that P&lD was responsible for Nigeria’s delay in issuing the current claims. I am afraid I cannot accept this. As explained above, I have held that Nigeria has established a strong prima facie case of fraud, which P&lD has prima facie covered up, thus contributing to the delay.
266. Mr Mill’s contention was that an extension would cause irredeemable prejudice to P&lD because it was being kept out of its money for a further significant period. A fraud trial would not only take a considerable time, especially with appeals, it would be very expensive. There was also the further delay in the appeal on Butcher J’s enforcement decision, which would likely be postponed after any fraud trial.
267. It seems to me that, where a party has a strong prima facie case of fraud, there can be no prejudice to the respondent in being subject to a full inquiry into the fraud at trial. As Mr Howard expressed it, an award that is liable to be set aside as having been procured by fraud is, in legal terms, worthless.
270. For the reasons already given, Nigeria has to my mind a strong prima facie case in fraud in its serious irregularity challenge. On closer investigation this not the type of case Butcher J rightly warned about in his judgment ordering the present hearing, where a party who has been unsuccessful in the arbitration alleges fraud in relation to the procurement of the underlying contract or in relation to the conduct of the arbitration, when that was not properly investigated at the of the arbitration: The Federal Republic ofNigeria v Process & Industrial Developments Limited (2020) EWHC 129 (Comm), [3 l l.
273. With that as background I find persuasive Mr Howard’s submission that the fairness factor does have an impact in challenges where there is strong prima facie evidence of fraud, certainly of the through-going character alleged in this case. Not only is the integrity of the arbitration system threatened, but that of the court as well, since to enforce an award in such circumstances would implicate it in the fraudulent scheme.
274. The delay in this case is extraordinary and weighs heavily on the side of the balance against an extension. In my view, however, other factors bring it down in favour of an extension.
275. As I have explained, the delay is not in my view the result of a deliberate decision made because of some perceived advantage, and in all the circumstances Nigeria has acted reasonably.
Given the strong prima facie case of fraud which I have concluded Nigeria has established, the position is along the lines of that identified in Terna, where Popplewell J identified the substantial injustice an applicant would suffer in respect of the underlying dispute if deprived of the opportunity of making a challenge should an extension of time be refused: Terna Bahrain Holding Company WLL v Bin Kami/ Al Shamsi [2012] EWHC 3283 (Comm), [2013] 1 Lloyd’s Rep 86, [33].
276. For the reasons I have given, P&lD has contributed to the delay, and it will not by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application is permitted to proceed.
Although not a primary factor, fairness in the broadest sense favours an extension in this case.
277. For the reasons given, I grant Nigeria’s applications for an extension of time and relief from sanctions.
Louisa Keech
Paralegal
