UK Supreme Court upholds P&ID v Nigeria costs ruling
The United Kingdom Supreme Court has upheld a costs order issued in favour of Nigeria following its successful challenge to the US$11 billion arbitral award against it.
Global Arbitration Review (GAR) reports that on Tuesday, 22 October 2025, a five-member panel of the UK Supreme Court dismissed an appeal by British Virgin Islands-based Process & Industrial Developments (P&ID), ruling that legal costs should be paid in the same currency in which they were billed and paid.
The court found no error in the earlier decision of Justice Robin Knowles to order P&ID to pay Nigeria’s costs in British pounds rather than naira. It also rejected the company’s claim that Nigeria had gained an undue financial advantage from the currency decision.
Nigeria is seeking £44 million in total legal costs, with an interim payment of £20 million already ordered.
“Mr Justice Robin Knowles issued the costs order against P&ID in 2023 after he set aside the US$11 billion award on the grounds it had been procured by fraud. The award challenge had been the subject of an eight-week trial. He refused P&ID permission to appeal the set-aside decision.
“P&ID argued that Knowles erred in ordering it to cover Nigeria’s legal fees in British sterling rather than Nigerian naira. It said Nigeria paid those bills after converting naira held in a consolidated fund, and so the order should have been in naira,”GAR reported.
Nigeria, however, maintained that the payments were made from sterling-based accounts.
The UK Court of Appeal had previously dismissed P&ID’s challenge, ruling that a costs order was not meant to compensate for loss but to cover a party’s liability to its lawyers.
Upholding that judgment, the Supreme Court held that costs awards are discretionary remedies and not automatic entitlements. It added that courts are not required to investigate how parties fund their legal expenses, as such inquiries could encourage unnecessary and costly litigation.
The court also noted that Nigeria paid its legal fees through 116 invoices over five years, and converting each to naira retrospectively would require applying 116 different exchange rates.
While clarifying that English courts are not bound to issue costs orders only in pounds, the justices said the general rule is that costs should be paid in sterling or in the currency used to pay a party’s lawyers.
Legal expert Hannah Ambrose, a partner at Herbert Smith Freehills Kramer, described the decision as “sensible” and “grounded in the proper understanding of costs orders as distinct from damages awards.”
“P&ID obtained the US$11 billion award in 2017 in relation to a gas processing plant that was never constructed. The London-seated ad hoc tribunal chaired by retired British judge Lord Hoffmann and including Sir Anthony Evans KC and Nigeria’s Chief Bayo Ojo SAN found Nigeria liable for repudiating a long-term contract.
“Setting aside the award, Knowles found that it had been obtained through false evidence, corrupt payments and improper retention of leaked documents. He heavily criticised the conduct of P&ID and some of its lawyers, including its arbitration counsel Seamus Andrew (now of Velitor Law),” GAR reported.
Earlier this year, the UK Court of Appeal rejected Andrew’s bid to overturn the findings against him, ruling that his claims of procedural unfairness had no merit.
Separately, the BVI High Court last year allowed a Chinese company to attach funds owed by P&ID to Nigeria under the costs order, to enforce a $70 million investment treaty award against Nigeria — a dispute the Nigerian government has since agreed to settle.
