Firm seeks $9 bln Nigerian asset seizure over unpaid gas project arbitration

* Award involves aborted 2010 gas project in Calabar
* Initial $6.6 bln figure grew as interest accumulated
* Nigeria sought to claim state immunity
* $9 billion is 20% of foreign reserves, roughly 2% of GDP

By Libby George
LONDON, June 13 (Reuters) - A firm incorporated in the
British Virgin Islands will ask a British court on Friday for
the right to seize up to $9 billion of Nigerian government
assets - some 20% of the oil-rich nation's foreign reserves -
over an aborted gas project.
The case highlights a risk to Nigeria's foreign assets,
potentially clouding its appeal to some investors.
The request is part of a long-running saga over a 2010 deal
in which the Nigerian government agreed to supply gas to a
processing plant in Calabar on the country's southeast coast
that Process and Industrial Developments Ltd (P&ID) – a
little-known firm founded by two Irish business men specifically
for the project - would build and run.
When the deal went south, P&ID won a $6.6 billion award at
arbitration, based on what it could have earned during the
20-year agreement. It now says the total owed has ballooned to
$9 billon because of interest accrued since 2013 .
Nigeria has tried to nullify the award, saying it was not
subject to international arbitration but British courts rejected
the argument. P&ID is now asking the Commercial Court in London
to convert the arbitration into a judgement, which would allow
them to try to seize international assets.
A source close to President Muhammadu Buhari said they were
fully aware of the matter and the government "is not sleeping",
adding they were optimistic the matter could be resolved in the
courts. There are also proceedings pending at a U.S. District
Court in Washington, D.C.
Buhari, who was inaugurated for a second term on May 29, has
not yet appointed cabinet ministers, and officials contacted by
Reuters said the lack of an attorney general or petroleum
minister made it difficult for anyone to comment on the record.
"This is a problem that the Nigerians are not facing up to
in any serious way," said Andrew Stafford, Q.C. of Kobre & Kim
LLP, which is representing P&ID.
Experts said it would be difficult for Nigeria to fully
extricate itself.
"Under UK legislation, state immunity does not operate to
protect a sovereign state where it has entered into an
arbitration agreement," said Simon Sloane, a partner with UK law
firm Fieldfisher.
He added that going after state assets following arbitration
had become a well-trodden path over the past 15 years and it
would be difficult for Nigeria to avoid paying compensation.
While assets that are used for diplomatic purposes – such as
the Nigerian High Commission building in central London – were
off the table, commercial assets were up for grabs.
In 2008, a UK court ruled that proceeds of oil sales from
Chad held in an international account intended to repay World
Bank loans were fair game for seizure.
Experts also said that the involvement of hedge fund VR
Group, which has a stake in P&ID, signalled that it is unlikely
to let the issue drop.
"They could still come to a settlement," Sloane said. "As
it's a consensual process the parties can agree to settle, and
settle for significantly below the $9 billion figure."