Legal fees in the mammoth case which saw the High Court overturn an $11bn (£9.1bn) arbitration award against the Nigerian government have reached £43m, a Court of Appeal judgment has revealed.

Oil company Process & Industrial Developments Ltd (P&ID) was ordered to pay Nigeria’s costs after two arbitration orders made in its favour in 2016 and 2017 were set aside on the ground that they had been obtained by fraud and bribery. P&ID appealed against the order being paid in sterling rather than naira. The issue is ‘of some financial consequence’, the Court of Appeal noted, due to the naira’s depreciation against sterling in the period between Nigeria’s payments to its London lawyers and the costs order made in December 2023. 

It added: ‘Nigeria’s legal fees and disbursements are said to have amounted to around £43 million. P&ID asserts that payment of such fees and disbursements at the relevant times would have cost Nigeria a total of about 23 billion naira; but if P&ID is required to pay £43 million in costs now, that could be exchanged by Nigeria at the current rate to about 76 billion naira.’

Dismissing the appeal, Lord Justice Snowden, with whom Lord Justice Fraser and Sir Julian Flaux agreed, said an award of costs is a statutory indemnity against the liability that the receiving party has incurred to his own lawyers. That was clearly illustrated 'by the many cases in which costs have been awarded to a successful party to litigation even though it is also apparent that they have personally suffered no loss because the fees of the lawyers acting for them have been paid by a third party such as a union, an insurer or a litigation funder'.