Nigeria: Accused of ‘Undermining’ Case Against P&ID, Shasore Gets Another Huge Arbitration Contract

Nigeria: Accused of ‘Undermining’ Case Against P&ID, Shasore Gets Another Huge Arbitration Contract

Despite being accused of sabotaging the federal government’s legal contest against the British Virgin Island’s firm, P&ID Limited, Olasupo Shasore, a Nigerian lawyer, also got another $2m arbitration deal on behalf of the government in 2019, PREMIUM TIMES has found.

Mr Shasore, a former Attorney General of Lagos State, represented Nigeria in a 2012 arbitration suit between the federal government and Process & Industrial Development Limited (P&ID), but was later accused by the government of working against national interest amid corruption allegations.

The British firm signed a gas supply and processing agreement with the Ministry of Petroleum Resources in 2010, to build and operate an Accelerated Gas Development project to be located at Adiabo in Odukpani Local Government Area of Cross River State.

The Nigerian government was to provide natural gas from oil mining leases (OMLs) 123 and 67 operated by Addax Petroleum and supply to P&ID to refine into fuel suitable for power generation in the country.

In the long run, the company accused Nigeria of breaching the terms of contracts after negotiations were opened with the Cross River State government for allocation of land for the project. It claimed failure to construct the pipeline system to supply the gas “frustrated the construction of the gas project, thereby depriving it of the potential benefits from over 20 years’ worth of gas supplies.”

This led to an arbitration request in 2012 after all efforts at amicable resolution ended in a fiasco.

In its defence, Nigeria argued before the arbitration tribunal that “the failure of P&ID to acquire the site and build Gas Processing Facilities was a fundamental breach and that no gas could be delivered until this has been done.”

In July 2015, the tribunal found that Nigeria had repudiated its obligations under the GSPA and that P&ID was entitled to accept the repudiation and claim damages for breach.

On December 23, 2015, the government appealed that the commercial court in the United Kingdom set aside the $10 billion awarded in favour of P&ID.

PREMIUM TIMES reported how the Nigerian government secured a judgement of the British court to suspend the unfavourable ruling on Friday by giving it more time to prepare its defence.

Undoing

According to Ross Cranston’s judgement on Friday, the federal government accused Mr Shasore of non-disclosure of his involvement in the case to members of his law firm and running it through a different firm, Twenty Marina Solicitors, through which he obtained a legal fee of $2million.

Also, Mr Shasore, whose service was employed in 2012, failed to cross-examine Michael Quinn, the founder of the company, on the matter, an action tantamount to strengthening the argument of P&ID and sabotaging the interest of his country. Mr Quinn had died when this came to the fore.

Moreover, the Nigerian government noted in its appeal that Mr Shasore, for more than a year, failed to cooperate in handing over necessary materials to Bolaji Ayorinde, the senior lawyer who replaced him.

In clear terms, Nigeria’s legal representative, Mark Howard, stated that in the first two stages of the arbitration, Mr Shasore, deliberately “defended the case thinly”.

In fact, in a briefing note for the Economic and Financial Crimes Commission (EFCC), Folakemi Adelore, head of the legal unit of the petroleum resources ministry, criticised Mr Shasore’s strategy in the arbitration.

Nevertheless, while the case was still ongoing, Mr Shasore allegedly made a questionable payment of $100,000 each to Folakemi Adelore and Ikechukwu Oguine, both legal representatives of the ministry of petroleum resources and NNPC respectively.

The trio, who also discouraged Nigeria from strongly contesting claims of the British firm, formed the settlement team that jetted to London for negotiations with P&ID.

Mr Shashore, in his reaction to the allegations, on Saturday, said he did his best in securing the best for the country. However, he neither affirmed nor contested the allegation of bribery and corruption levelled against him.

Another big job

Regardless of these concerns about Mr Shasore’s performance, the federal government under President Muhammadu Buhari awarded him another lucrative arbitration contract.

“Approved: the contract award to Olasupo Shasore SAN of Africa Law Practice and the appointment of Mr Michael Tselensi, QC as the FGN’s Counsel and Arbitrator respectively for the defence of the Federal Government in an Arbitration Case No. 23211 /TO, instituted at the International Court of Arbitration in Paris by Sunrise Power Transmission Company Ltd against the Federal Government and Sinohydro Corporation Ltd,” an approval letter signed by the late Chief of Staff to Mr Buhari, Abba Kyari, read.

It was for a new arbitration job awarded to Mr Shashore, two years after he defaulted on releasing necessary materials to Mr Ayorinde and at a time the Buhari-led administration was conducting an investigation into the controversial P&ID saga owing to the interim report by EFCC.

A 2016 interim report of the EFCC had earlier indicted him for doing a shoddy arbitration, following the testimony of Ms Adelore.

Also, in a letter to Vice President Yemi Osinbajo on March 29, 2017, the Attorney General, Mr Malami, stated that Mr Shasore had failed to cooperate properly in handing over material when his (the Attorney’s) office assumed the conduct of the case from the Ministry in mid-2016.

The letter of approval dated July 12, 2019, was sent to the Permanent Secretary of the Federal Ministry of Power, Works and Housing. It was not immediately clear why this was the case.

For the new arbitration job, Mr Kyari directed the immediate payment of $450,000, being the initial sum of the professional fees, to Mr Shasore while the remaining sum was to be paid subsequently.

Also, he directed the Solicitor General of the Federation to prepare a legal opinion on disciplinary options for the actions of the then Minister which contravened Council’s directives by issuing a contract offer letter to Sunrise Power.

Genesis of Arbitration

The Mambilla power project, first conceived in the 1970s and expected to produce 3,050 megawatts of electricity, has stalled owing to controversies surrounding the award of the contract to Sunrise Power and Transmission Company.

The award was a sequel to a 2003 agreement under Olusegun Obasanjo-led administration to construct the 3,050MW plant in Mambilla, Taraba state, on a build, operate and transfer basis.

Meanwhile, according to the Chairman of Sunrise, Leno Adesanya, some compromised officials in government awarded another contract to three Chinese companies, Sinohydro Corporation of China, China Ghezouba Group Corporation of China and China Geo-Engineering Group Corporation, to form a joint venture for the execution of the same project, four years after.

With the new arrangement, the project was to be financed by the Export-Import Bank of China, Nigeria’s biggest creditor.

Also in the 2017 letter, Mr Adesanya accused the late Kyari of unilaterally making the decision to remove the company from the contract while Mr Fashola was accused of frustrating all efforts to settle the dispute.

This birthed the International Arbitration in Paris initiated by Sunrise Power and Transmission Company against the Nigerian government and Sinohydro Corporation Limited, the Chinese company currently handling the project, the same year.

The transmission company is seeking an award of $2.3 billion for the breach of the 2003 agreement.

However, in 2020, the payment of the $200 million to Sunrise Power as “full and final settlement” to discontinue the arbitration and set the government free from all liabilities was agreed upon.

As of the time of filing this report, Nigeria was yet to pay the transmission company the agreed sum. The Cable reported that Mr Buhari failed to approve the payment for fiscal reasons.

Source: allafrica.com