TY Danjuma Drags P&ID to Court over $40m Loss

A firm owned by a billionaire and former Nigerian Defence Minister, Lt. Gen. Theophilus Danjuma is suing Process and Industrial Development (P&ID), an ex-business partner that is at the centre of a London trial over an $11 billion arbitration award.

Documents from the previously unreported court action, obtained by Bloomberg, further compounded the mounting efforts by the company whose officials are also facing anti-graft agencies in Nigeria on their roles over what the federal government had described as a sham contract.

A UK tribunal ordered Nigeria’s government in 2017, to pay P&ID $6.6 billion in damages after a gas-supply deal soured and the amount had ballooned with interest. The federal government has since then sought to set aside the court judgment.

In 2019, a source close to Danjuma, revealed to press how the former minister was double-crossed on the project by the company’s promoters, saying that the gas-to-power project was Danjuma’s original idea, which he introduced to one of the promoters of P&ID, Mr. Michael Quinn, who he subsequently engaged as consultant.

He said Quinn later double-crossed Danjuma to clinch the deal with the federal government.

“Danjuma actually engaged Quinn as a consultant to his company, Tita-Kuru Petrochemicals Limited, but after obtaining as much as $40 million to prepare the feasibility studies of the project, the Irish went behind to set up a shell company and used it to take the contract from the federal government,” he had told THISDAY at the time.

The source identified the shell company as P&ID, alleging that Quinn colluded with a former presidential adviser on petroleum and some officials of the Nigerian National Petroleum Corporation (NNPC) as it was then called, to pull the deal.

According to him, when the deal went sore and P&ID went into arbitration, Danjuma demanded to be briefed but that Quinn and his partner, Brendan Cahill, simply disappeared and became unreachable.

But Bloomberg reported yesterday that Danjuma’s Tita-Kuru Petrochemicals Ltd. brought its own arbitration claim against P&ID in London in, alleging that its designs had been “unlawfully misappropriated” to secure the gas contract, Nigeria said in a filing to a UK court in February.

“P&ID firmly denies that it unlawfully misappropriated anything from Tita-Kuru,” the company’s majority shareholder, Seamus Andrew, said by email, declining to comment further on the arbitration because the proceedings are confidential. A spokesman for Danjuma declined to comment, according to the report.

Danjuma, 83, amassed a fortune after retiring from the army as a senior general in the late 1970s and going into business.

He founded South Atlantic Petroleum Ltd., which holds a 15 per cent interest in two oil fields that produce about 200,000 barrels of crude a day. Danjuma also served as Nigeria’s defence minister from 1999 to 2003.

Tita-Kuru and British Virgin Islands-registered P&ID worked together from 2006 on an unsuccessful project to build a gas-processing plant. Danjuma’s firm claimed in a 2019 letter sent to Nigeria’s anti-corruption agency that P&ID presented work that cost Tita-Kuru $40 million to win its deal with the government.

Nigeria repeated that argument in July to a UK court, where it seeks to overturn the multibillion-dollar arbitration award that P&ID won five years ago.

President Muhammadu Buhari’s administration is now preparing for a London trial in January, during which it will try and prove that P&ID secured the gas-supply contract and arbitration award through bribes and lies, the Bloomberg report added.

P&ID denies all allegations of wrongdoing and accuses the government of evading its legal obligation to pay it compensation.

While P&ID was entitled to use the design work paid for by Tita-Kuru for the facility it intended to build under the contract with the state, most of the plans ultimately were “not required,” the company said in its response to the government’s allegations in September.

Nigeria’s Attorney General Abubakar Malami said in a witness statement in June 2020 that an earlier settlement struck between Tita-Kuru and P&ID “may have involved” the ex-minister “receiving the right to some form of equity stake” in P&ID and therefore an interest in the company enforcing the award.