LONDON, Oct 23 (Reuters) - Nigeria on Monday hailed a landmark victory after it won its bid to overturn an $11 billion damages bill for a collapsed gas project, in a case a judge at London's High Court said exemplified the ravages of greed and corruption.

Africa's most populous country had previously been ordered to pay the sum – representing around a third of its foreign exchange reserves – to Process & Industrial Developments (P&ID), a company based in the British Virgin Islands.

But Judge Robin Knowles found that P&ID had paid bribes to a Nigerian oil ministry official in connection with the gas contract signed in 2010, and had failed to disclose this when it later took Nigeria to arbitration over the collapse of the deal.

Nigerian President Bola Tinubu described the judgment as a blow against economic malpractice and the exploitation of Africa.

"Nation states will no longer be held hostage by economic conspiracies between private firms and solitarily corrupt officials," he said in a statement.

The ruling is a major boost for Africa's biggest economy, which is saddled with mounting debt, high inflation and unemployment.

"The economic prospects of an entire country have been held hostage by a tainted arbitral award that was built on bribes and lies," said campaign group Spotlight on Corruption.

In 2017, an arbitration tribunal had awarded P&ID $6.6 billion for lost profit after its 20-year contract to construct and operate a gas processing plant in southern Nigeria had fallen apart.

The sum had since swelled with interest to over $11 billion, representing 10 times the country's 2019 health budget.

"DRIVEN BY GREED"

However, Nigeria's lawyers went to court to overturn the award, saying P&ID had bribed senior officials to obtain the contract and corrupted the country's lawyers to obtain confidential documents during the arbitration. P&ID denied this and accused Nigeria of institutional incompetence.

But Knowles allowed Nigeria's challenge, writing that the case showed what some people would do for money, "driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others".

The judge said a further hearing would take place to decide whether to send the case back to arbitration or ditch the $11 billion award without further delay.

Lawyers representing P&ID said the firm was disappointed and considering steps available to it.

In a rare rebuke, the judge said two British lawyers who stood to receive astronomical sums had Nigeria been forced to pay the $11 billion-plus bill had misconducted themselves out of greed.

Trevor Burke, an eminent criminal barrister and a nephew of P&ID's co-founder, would have received $850 million while Seamus Andrew, who represented P&ID during the arbitration, would have received up to $3 billion.

Both received confidential Nigerian documents during the arbitration that they knew they were not entitled to see, the judge found. Their decision to say nothing and not to return the documents was "indefensible", he wrote.

They did so "because of the money they hoped to make" and gave untruthful evidence about it, Knowles added, referring his ruling to legal standards regulators.

Burke and Andrew said in separate statements they did not accept the judge's criticisms and believed they would be exonerated by the regulators.

Additional reporting by Felix Onuah in Abuja, Editing by Estelle Shirbon and David Evans

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