Nigeria's government has avoided a potentially massive $11 billion payout after a London judge ruled that an arbitration award, related to a failed gas deal and awarded to a hedge-fund backed firm, was secured fraudulently.

The judge found that the substantial arbitration award in favor of Process & Industrial Development Ltd. (P&ID), a firm with hedge fund backing, was tainted by bribes. "The awards were obtained by fraud," Judge Robin Knowles stated in a ruling on Monday.

The case, according to the judge, serves as a striking example of what some individuals are willing to do for financial gain. He described them as individuals driven by greed, ready to engage in corruption without contemplating the harm it would cause, including harm to the people of Nigeria.

This ruling, subject to potential appeal in the UK, comes as a relief to Africa's largest crude oil producer. The Nigerian economy is grappling with double-digit inflation and declining oil revenues, and an adverse ruling could have added a considerable financial burden to the country. Nigeria has seen its debt increase nearly eightfold in the past eight years, reaching over $110 billion.

While Nigeria's allegations of widespread bribery concerning the gas deal and attempts to buy off lawyers representing the country in winning the arbitration award in 2017 did not entirely hold, the judge acknowledged the presence of irregularities in the award. This could pave the way for the court to nullify the award, relieving Nigeria from facing this substantial financial liability.

Spokespeople for Nigeria, as well as lawyers for P&ID and its founders, did not provide immediate responses to requests for comments.

At the heart of this legal battle is a failed 2010 gas deal between Nigeria and P&ID, a British Virgin Islands-registered firm founded by two Irish businessmen. This agreement resulted in an initial $6.6 billion arbitration award for P&ID, which has now grown to over $11 billion with accumulated interest.

In its pursuit of avoiding the significant payout, Nigeria alleged "bribery of epic and industrial scale" related to the gas deal and in attempts to influence the lawyers representing the country during the arbitration process in 2017. The country's lawyer, Mark Howard, stated during the trial in March that no one who had witnessed the factual evidence could have missed the "stench of corruption."

While not all of Nigeria's allegations were accepted by the court, the judge recognized the irregularities in the award, providing a pathway for the court to invalidate the award's enforceability.

Among the potential beneficiaries of the award if P&ID had succeeded in receiving the full amount were the Richard Deitz-led hedge fund VR Capital Group Ltd., two UK lawyers, P&ID's founder, and two missing witnesses.

“We completely deny that there was any corruption,” David Wolfson, P&ID’s lawyer, previously said. Nigeria came up with fabricated evidence to lay a “forensic trap” for the court to rule against the award.