UPDATE 2-UK judge to allow Nigeria to appeal ruling on $9 bln P&ID case

* Court requires Nigeria to put up $200mln
* Nigeria vows to challenge entire award
* P&ID calls fraud allegations "red herring"

(Updates with quotes from P&ID and government, details)
By Karin Strohecker and Libby George
LONDON/LAGOS, Sept 26 (Reuters) - A British judge on
Thursday gave Nigeria permission to seek to overturn a ruling
that would have allowed a private firm to try to seize more than
$9 billion in assets from the West African country.
Process & Industrial Developments, a firm set up to carry
out a gas project with Nigeria, won a $6.6 billion arbitration
award after the deal collapsed. The award has been accruing
interest since 2013 and is now worth more than $9 billion.
P&ID, established by two Irish nationals with little
experience in the oil and gas sector, said on Thursday that
interest was accruing at rate of $1.2 million a day.
The judge also granted Nigeria's request for a stay on any
asset seizures while its legal challenge is pending, but ordered
it to pay $200 million to the court within 60 days to ensure the
stay. It also must pay some court costs to P&ID within 14 days.
The original decision on Aug. 16 converted an arbitration
award held by P&ID to a legal judgment, which would allow the
British Virgin Islands-based firm to try to seize international
assets. Nigeria's appeal of this decision, called a "set-aside",
would need to prove there was an error in that ruling.
During Thursday's proceedings, lawyers representing Nigeria
said the judgment was flawed primarily due to its acceptance
that England was the proper seat of the arbitration.
Harry Mantovu argued on behalf of Nigeria that the courts,
not the arbitration tribunal, should determine this, and that
the award itself was "manifestly excessive".
"We look forward to challenging the UK Commercial Court's
recognition of the tribunal's decision in the UK Court of
Appeal, uncovering P&ID's outrageous approach for what it is: a
sham based on fraudulent and criminal activity developed to
profit from a developing country," Nigerian attorney general
Abubakar Malami said.
P&ID welcomed the requirement that Nigeria place $200
million on hold pending the appeal, which it said will force the
nation "to put its money where its mouth is if it wants to avoid
immediate seizure of assets".
It also called fraud allegations a "red herring".
"The Nigerian government knows there was no fraud and the
allegations are merely political theatre designed to deflect
attention from its own shortcomings," it said in a statement.
The judge's order said that if Nigeria does not put the $200
million into a court account within 60 days - the minimum amount
of time that Mantovu said it would take Nigeria raise the funds
by tapping capital markets or seeking internal sources - the
stay on seizures would be lifted.
The case has electrified Nigeria and drawn condemnation at
every level of government. In a speech at the United Nations
this week, President Muhammadu Buhari said he would fight "the
P&ID scam attempting to cheat Nigeria of billions of dollars".
At the court on Thursday, a dozen senior government
officials huddled during a break, discussing how much money
Nigeria could place in court accounts to secure a hold on asset
seizures.
Last week, Nigeria's anti-graft agency charged one former
petroleum ministry official with accepting bribes and failing to
follow protocol related to the contract, while two Nigerian men
linked to P&ID pleaded guilty to charges of fraud and tax
evasion on behalf of the company. P&ID has called the investigation in Nigeria a "sham" that
denied its subjects due process.