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Currency Costs Order: UK Supreme Court Rejects P&ID’s Bid

Discover the latest UK Supreme Court ruling on the currency of costs orders concerning Nigeria’s set-aside proceedings against P&ID. Understand the implications for international arbitration.

In a significant development for international arbitration and the ongoing legal saga between Nigeria and Process and Industrial Developments Limited (P&ID), the UK Supreme Court has made a crucial decision. On October 22, 2025, the court rejected P&ID’s request to reverse a previous decision regarding the currency of costs order in set-aside proceedings lodged by Nigeria. This ruling has substantial implications for how costs are determined in complex, cross-border disputes.

Understanding the Core Issue: Currency of Costs

The heart of this legal battle lies in the specific currency in which costs awarded in arbitration proceedings should be paid. When one party is successful in setting aside an arbitral award, they are often awarded their legal costs. However, determining the appropriate currency for these costs can become a point of contention, especially when the parties and the underlying dispute involve different national currencies.

The P&ID Case: A Brief Overview

The P&ID case has been a high-profile dispute, involving allegations of a fraudulent gas processing contract and a subsequent massive arbitral award in favour of P&ID. Nigeria has been actively seeking to overturn this award, leading to a series of legal challenges in various jurisdictions, including the UK. The set-aside proceedings are critical for Nigeria’s efforts to escape the substantial financial liability.

UK Supreme Court’s Decision on Currency of Costs Order

The recent ruling by the UK Supreme Court pertains specifically to Nigeria’s application to have the currency of costs order in the set-aside proceedings reconsidered. P&ID had sought to appeal an earlier decision, likely arguing for payment in a different currency than what was initially ordered. However, the Supreme Court’s rejection means that the original determination on the currency of costs stands.

Why This Ruling Matters

The implications of this decision are far-reaching:

• Certainty in Costs: It provides a degree of certainty regarding the currency of payment for legal costs in similar arbitration-related litigation in the UK.
• Impact on Future Cases: This precedent could influence how courts approach currency disputes in costs orders in future international arbitration cases.
• Nigeria’s Legal Strategy: For Nigeria, this ruling is another step in their ongoing efforts to dismantle the P&ID award, reinforcing their legal position on specific procedural aspects.

The Legal Landscape of Arbitral Costs

Determining the currency of costs in international arbitration can be complex. Several factors typically influence such decisions:

1. The Currency of the Underlying Dispute: Often, the currency in which the main arbitration was conducted or the currency of the contract plays a significant role.
2. The Currency of Incurred Expenses: Courts may consider the actual currency in which legal fees and other expenses were paid.
3. The Currency of the Awarded Sum: If an award itself is in a specific currency, this can influence the costs order.
4. Prevailing Exchange Rates: Fluctuations in exchange rates can add another layer of complexity.

Navigating Set-Aside Proceedings

Set-aside proceedings are a crucial mechanism for challenging arbitral awards. They allow national courts to review awards on limited grounds, such as breaches of natural justice or public policy. The jurisdiction where the award is sought to be enforced or where the arbitration was seated typically has the authority to hear such applications.

What’s Next for P&ID and Nigeria?

While this ruling specifically addresses the currency of costs order, the broader legal battle between P&ID and Nigeria continues. The Supreme Court’s decision on this procedural matter does not alter the fundamental dispute over the validity of the arbitral award itself. Both parties will likely continue to pursue their respective legal strategies in various forums.

This latest development underscores the intricate nature of international arbitration and the meticulous legal arguments that can arise, even concerning seemingly straightforward matters like the currency of financial settlements. The UK Supreme Court’s firm stance provides clarity, reinforcing its role in overseeing the integrity of arbitral processes within its jurisdiction.

For legal professionals and businesses involved in international arbitration, staying abreast of such rulings is paramount. The ability to understand and navigate these complex legal nuances can significantly impact outcomes and financial exposure.

For more on the intricacies of international arbitration and dispute resolution, you can refer to resources from the Chartered Institute of Arbitrators or the UNCITRAL website.

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