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Nigeria’s Foreign Assets At Risk As Enron Seeks To Enforce $22M Arbitration

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Nigeria is making frantic efforts to stop Enron Nigeria Power Holding (ENPH) from enforcing a $22 million arbitration award that could risk the country’s assets in the US.
ENPH, an incorporation of the defunct Enron International, is seeking a turnover of Nigeria’s claim to proceeds from an $80 million mega yacht that was sold in the US.
In 2019, a US federal court had given Nigeria approval to sell the yacht, named “Galactica Star”, as part of an ongoing corruption case against Kola Aluko, Nigerian businessman who allegedly acquired it with diverted profits from oil sales in Nigeria.
The yacht has been sold for $37 million and ENPH is trying to lay claim to part of the proceeds in enforcing its $22 million arbitration award.
Abubakar Malami, attorney-general of the federation (AGF) and minister of justice, is now seeking approval from President Muhammadu Buhari to negotiate the award to protect the country’s assets.
He told the president that ENPH could further target the country’s assets in California, New York and other states in America.
ROAD TO CONTRACT BREACH
On December 6, 1999, ENPH had entered a power purchase agreement (PPA) with the Lagos state government, guaranteed by the federal government through the now-defunct National Electric Power Authority (NEPA), later named Power Holding Company of Nigeria (PHCN).
ENPH was to build, arrange, finance and run electricity generating plants and natural gas pipelines in Lagos state.
NEPA suspended the PPA on December 15, 1999 for renegotiation.
However, construction continued on the different phases of the porject.
By September 30, 2000, phases one and three of the contract were completed while negotiation for phase two of the construction failed.
At the time, Enron International had gone bankrupt, but it wrote to the federal government that this would not affect ENPH, the Nigeria arm, in carrying out its own part under the contract.
After several failed attempts at negotiating, ENPH commenced an arbitration against Nigeria on June 13, 2006 at the international chambers of commerce court of arbitration in London, accusing the government of breach of contractual agreement.
Six years later, on November 12, 2012, a final award (“Quantum”) was given against Nigeria in the sum of $11.22 million, with 2 per cent interest from June 13, 2006, and also expenses for legal services.
Attempts by the Nigerian government to negotiate the settlement failed.
ENRON SEEKS ENFORCEMENT
On July 19, 2013, ENPH, under the convention on the recognition and enforcement of foreign arbitral awards which Nigeria is also a signatory, approached the US court in the southern district of Texas to seek enforcement of the award.
The court granted ENPH the motion for confirmation of the award on October 16, 2015, prompting Nigeria government to appeal the judgement at the US district of Columbia circuit.
ENPH had also argued that Nigeria, following the contract, had waived its rights to challenge the award.
Nigeria’s appeal was subsequently dismissed, and the court affirmed the order to confirm the award.
In an interesting approach, ENPH also sought from the court a writ of garnishment to be issued against the JP Morgan Chase Bank on the ground that it has in its possession commercial assets belonging to Nigeria which could be garnished in satisfaction of the judgement in favour of ENPH.
The company’s prayer was, however, denied.
And in a fresh move on March 9, 2020, ENPH filed an amended application and this time asking the court for the turnover on the Galactica Star Nigerian assets.
The US department of justice (DoJ) and counsel to the Nigerian government again challenged the application, and on May 21, 2020, the court denied ENPH’s request.
ENPH, however, secured another order on July 15, 2020 to file an appeal.
MALAMI SEEKS BUHARI’S APPROVAL TO NEGOTIATE
In a letter dated July 28, 2020, Malami sought Buhari’s approval to negotiate the arbitration award against Nigeria in the failed power project.
Without a settlement, the AGF said, ENPH will continue to cause problems for Nigeria with different litigation which may put the Galactica case at risk.
“Without conceding, should ENPH succeed in attaching the USA v Galactica funds by deducting $22 million all that will be left for FGN will be about $5.4 million which may be less after deduction of the 3% success fee accruable to BCR,” Malami wrote in a letter seen.
“The resultant implication would mean FGN will lose an asset it is rightfully entitled to, loss of revenue to FGN, loss of revenue as regards the huge litigation cost that has been paid to FGN counsel (disbursement and retainership fees) etc.
“In other to avoid unwarranted delay and ENPH further intervention,, it has been advised that is is in FRN’s interest to deal expeditiously with the intrusion of an unrelated issue (ENPH issue) in the repatriation of funds in the ongoing USA v Galactica case.”
Malami said without a settlement, ENPH will definitely hold up the earlier repatriation of the Galactica funds for a year or more.
The AGF asked the president to approve for Berliner Corcoran & Rowe (BCR), Nigeria’s counsel, in collaboration with the ministry of justice designated officers to proceed to engage in negotiation and settlement meeting with ENPH.
He argued that a negotiation may halt ENPH’s consideration of further action.
He also added that it may reduce the present amount being claimed by the company.
Ibrahim Gambari, chief of staff to the president, in another letter dated August 13, 2020, directed Saleh Mamman, minister of power, and Zainab Ahmed, minister of finance, to review the matter and revert with “considered views to inform Mr President’s further directives”.
The development comes at a time government is also trying to get an upturn over the $9.6 billion awarded P&ID Ltd, an Irish firm, in arbitration against Nigeria.

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Lokoja Tanker Explosion: Pupil, 9 Others Dead

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A primary school pupil died on Wednesday alongside nine persons after a petrol tanker exploded at Felele area of Lokoja, Kogi State capital.
It was gathered that the tanker lost control and rammed into oncoming vehicles before going up in flames around 8am.
Some of the victims are Kogi State Polytechnic students.
The emergency responders failed to attend to the fire for over one hour.
Kogi State Governor Yahaya Bello in a statement by his spokesperson Onogwu Muhammed commiserated with the bereaved families.
“It is very sad to learn of the tragic loss of lives, many vehicles, property and other valuables in the petrol tanker fire,” he said.
He also urged students of the polytechnic to maintain peace.

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Nigerian Fraud Suspect , Wanted By FBI For $6 Million Scam Surrenders To EFCC

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images 66 2 Nigerian Fraud Suspect , Wanted By FBI For $6 Million Scam Surrenders To EFCC

A Nigerian, Felix Osilama Okpoh, who is wanted by the U.S. Federal Bureau of Investigations (FBI) for his alleged involvement in a Business Email Compromise (BEC) scheme that defrauded over 70 different businesses in the United States, has turned himself in to Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC).
Mr Okpoh, 31, who allegedly conspired with five others to defraud their American victims of over $6million, was led to the Lagos office of the EFCC by his father, retired Colonel Garuba Okpoh and his mother Justina Okpoh.
A spokesperson for the EFCC, Wilson Uwujaren, said the suspect surrendered on September 18 and that investigations into his case had since commenced.
Mr Uwujaren quoted Mr Okpoh as saying, during interrogation, that he decided to surrender himself to the Commission out of respect for his parents and his resolve to be morally upright.
The FBI accused the suspect of allegedly providing hundreds of bank accounts to Richard Izuchukwu Uzuh and other co-conspirators, Alex Afolabi Ogunshakin, Abiola Ayorinde Kayode, and Nnamdi Orson Benson, that were used to receive fraudulent wire transfers.
Bank accounts that Mr Okpoh allegedly provided to Mr Uzuh allegedly received fraudulent wire transfers from victim businesses totalling over $1million
On August 21, 2019, Mr Okpoh was indicted in the United States District Court, District of Nebraska, Omaha, Nebraska, on charges of Conspiracy to Commit Wire Fraud. On August 22, 2019, a federal warrant was issued for his arrest.
On June 16, 2020, United States Attorney Joe Kelly and Kristi K. Johnson, Special Agent in Charge of the Omaha field office of the Federal Bureau of Investigation, announced the unsealing of indictments charging the six Nigerians for their involvement in the fraud schemes.
“The schemes included individual victims and victim businesses both in Nebraska and other states,” the U.S.
Department of Justice said in a statement announcing the indictment. “BECs are sophisticated cybercrimes involving electronic transfer payments or automated clearinghouse transfers.”
“The indictments charge the defendants with one or more of the following violations of federal law: 1) Conspiracy to commit wire fraud and wire fraud, punishable by up to 20 years of imprisonment and a fine of up to $250,000; 2) Identity theft and access device fraud, each punishable by up to 10 years of imprisonment and a fine of up to $250,000.
“The Nigerian nationals charged and still at large are Richard Uzuh; Micheal Olorunyomi; Alex Ogunshakin; Felix Okpoh; Abiola Kayode and Nnamdi Benson. An indictment is a formal accusation returned by a grand jury upon establishing probable cause. The indictment is not evidence of guilt and defendants are entitled to a presumption of innocence. Two related defendants have entered pleas of guilty. Adewale Aniyeloye was sentenced in the District of Nebraska to 96 months’ imprisonment for wire fraud. Onome Ijomone received a 60-month sentence for conspiracy to commit wire fraud.”

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Nigeria ’ s Debts : How Each Nigerian Owes ₦155 , 000

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The Debt Management Office, DMO, has announced that the total debt stock of Nigeria rose to N31 trillion as of June 2020.
It also said the debts are expected to rise this year following more debts to be sourced from international financiers.
As of March 2020, the debt was at N28.6trn comprising all debts of the Federal Government, the 36 state governments and the Federal Capital Territory (FCT).
The latest debt total of N31.009trn debt is about $85.897 billion while that of March which was N28.628trn was about N79.303bn.
Cause of increase
The debt stock grew by N2.38trn or $6.59bn within the three months interval.
The additional increase was due to the $3.36bn Budget Support Loan from the International Monetary Fund IMF), new Domestic Borrowing to finance the Revised 2020 Appropriation Act, the issuance of the N162.557bn Sukuk, and Promissory Notes issued to settle Claims of Exporters.
The components of the debts are:
The multilateral debts are the highest of the stock of N16.360trn accounting for 51.97% of the total stock. The 10 agencies include IMF, World Bank Group, the African Development Bank (AfDB) Group, Eurobonds and Diaspora bonds.
The bilateral debts account for N3.948trn representing 12.54% of the debt stock taken from the international development agencies of China, France, Japan, India and Germany.
The third debt category is the commercial debt which is N11.168trn and represents 35.48% of the debt. This is the second largest debt after those of the multilateral agencies with Eurobonds and Diaspora bonds accounting for them.
Further rise
The debt stock will rise with the expected borrowing from the World Bank, African Development Bank and the Islamic Development Bank which were arranged to finance the 2020 Budget Appropriation.
The Nigeria Customs Service was recently given part of these funds to automate its services at the ports, to the tune of $3.1 billion.
Most of the loans are long term facilities with the repayment beginning already while the fresh loans’ repayment begin from 2022.
On the Sukuk bonds and other domestic bonds, their maturity periods are often between five and seven years for the repayment.
What you owe
The ministry of finance recently said there are plans made for the loans to be repaid. So far in the 2020 budget, over N3 trillion or a quarter of the budget is dedicated to debt servicing, for repaying the debts.
At N31 trillion, every Nigerian from the over 200 million population owes the debtors N155,000 in debt.
This debt per Nigerian will rise further when the loans from World Bank, AfDB and IsDB comes in later this year.

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