An $11 billion damages bill against Nigeria for a collapsed gas processing project which was procured by bribery has been thrown out by London’s High Court Reuters has reported.

The West African country was on the hook for the sum – representing around a third of its foreign exchange reserves – after a little-known British Virgin Islands-based company took Nigeria to arbitration over the deal.

But the High Court ruled in October that the contract was procured by Process & Industrial Developments (P&ID) paying bribes to a Nigerian oil ministry official.

Judge Robin Knowles also found that P&ID failed to disclose the bribery when it later took Nigeria to arbitration.

He said in a further ruling on Thursday that the damages award should be thrown out immediately, rejecting P&ID’s argument that the case should be sent back to arbitration.

P&ID was also refused permission to appeal against the ruling, though the company can apply directly to the Court of Appeal.

In October 2023 Judge Knowles passed a milestone judgment stating that P&ID $11 billion damages bill for a collapsed gas processing project was procured by a concerted campaign of bribery.  Judge Robin Knowles allowed Nigeria’s challenge in a written ruling.

“I have not accepted all of Nigeria’s allegations,” the judge said in his previous ruling.

But he added that the arbitration awards “were obtained by fraud and the awards were, and the way in which they were procured was, contrary to public policy”.

Process & Industrial Developments (P&ID) was awarded a 20-year contract in 2010, to construct and operate a gas processing plant in southern Nigeria, as part of a wider plan to exploit Nigeria’s abundant reserves of gas.

After the deal collapsed, P&ID took Nigeria to arbitration in London and in 2017 was awarded $6.6 billion for lost profits – a sum which has swelled with interest to over $11 billion, representing ten times the country’s 2019 health budget.

However, Nigeria’s lawyers say the country was the victim of “a campaign of bribery and deception” by P&ID, which they say paid bribes to senior officials to obtain the contract and then corrupted the country’s lawyers to obtain confidential documents during the arbitration.

P&ID denied that it procured the contract through bribery or that it corrupted Nigeria’s legal team during the arbitration, blaming the failure of the gas deal and the country’s arbitration defeat on institutional incompetence.