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Nigeria: Court Fixes Tomorrow to Rule On N122bn Judgment Debt Against Shell, FBN

Justice Ibrahim Buba of the Federal High Court in Lagos has fixed tomorrow to rule on the garnishee proceedings filed by some Ogoni chiefs from Ejama community in Rivers State against the Central Bank of Nigeria (CBN) and First Bank of Nigeria Limited for their failure to pay a N122 billion judgment debt against Shell Petroleum Development Company Limited (SDPC).

The judge also fixed the same day to rule on whether to jail the Chairman of First Bank, Mrs. Ibukun Awosika, for failing to pay the amount as ordered by a Federal High Court in Owerri, Imo State.

Justice Buba fixed the date after hearing all the applications filed by the different parties in the suit last Friday.

In the substantive suit, the Ogoni chiefs had sued the Royal Dutch Shell Plc, Netherlands; Royal Dutch Shell Plc, United Kingdom and SPDC over alleged oil spills that occurred when Shell operated in the community at the Federal High Court in Port Harcourt.

Justice Buba had in his judgment in 2010 awarded N17 billion to the representatives of the Ogoni people.

The court equally granted the Ogoni chiefs 25 per cent interest charge on the principal sum of about N17 billion.

SPDC had then appealed against the judgment and applied for a stay of execution of the judgment pending the appeal.

As a condition for granting the stay of execution, the court required Shell’s bankers, First Bank, to provide a guarantee of the judgment sum.

This condition was complied with. But Shell’s appeal failed at the Court of Appeal on technical grounds, ostensibly because it filed its processes out of time and without regularising them.

At the resumed hearing of the matter last Friday, lawyer to SPDC, O. Ochobi (SAN), informed the court of his client’s application dated and filed on January 22, 2018, seeking to join in the garnishee proceeding, and informed the court that he was yet to be served with all the processes in the suit.

He also told the court that the judgment creditors filed their written addresses in opposition to his motion out of time and without regularising it, adding that the applicants also failed to pay default for filing out of time, adding that it was contrary to Order 48 Rule 4 of the Federal High Court.

Responding to Ochobi’s application, lawyers to Ogoni chiefs led by Chief Lucius Nwosu (SAN) told the court that he had filed a counter affidavit to SPDC’s application.

Nwosu said the suit before the court is not against the party seeking to be joined but against the guarantor (First Bank).

He described SPDC as a meddlesome interloper. He therefore urged the court to dismiss SDPC’s application with punitive cost.

But the presiding judge, Justice Buba, after citing plethora authorities, granted SPDC’s application, and urged all parties in the suit to serve them with all the processes in the suit.

After the ruling on the SPDC’s application, lawyer to the First Bank, Chief Wole Olanipekun (SAN), told the court that after the ruling on the application seeking to join, if his clients, First Bank and its Chairman, Ibukun Awosika, would still be allowed to be a party in the suit following the ruling delivered by the court in favour of the SPDC.

Olanipekun informed the court that he had filed an application challenging the court’s jurisdiction to entertain the contempt suit.

Also, Professor Febian Ajogwu (SAN), counsel to the garnishee applicant (CBN), told the court that he had motion on notice dated January 19, 2018, with an affidavit deposed to Amaka A, with a written address dated and filed the same date. He also told the court that he filed a further affidavit deposed to by one Osita Nwosu together with a reply on point of law.

He said the application is seeking to set aside or dismiss garnishee order made by an Owerri division of the court in respect of the suit.

Ajogwu told the court that the order was made without compliance with the Section 84 of Sheriff and Civil Act, adding that the order must be made with the consent of the Attorney-General of the Federation (AGF).

He said for special emphasis, the order has to be made with AGF’s consent.

Ajogwu contended that there was no debtor-creditor between the parties.

The CBN counsel also stated that the CBN is not an indebtedness judgment creditor, and that it does not have the funds of the guarantor (First Bank).

Ajogwu also notified the court that the suit before the court is going on in parallel with the suit still pending before the Supreme Court, and that the funds sought to be attached by the creditors is not link with any account.

He therefore urged the court to set aside the order.

Responding, the Ogoni chiefs’ lawyer, Nwosu, told the court that he filed a garnishee application ex-parte on January 5, 2018, with an affidavit of 52 paragraphs, and plethora of exhibits, and a written address.

He also told the court that he had filed a counter affidavit to the garnishee’s application in opposition to set aside the order.

Nwosu contended that the exhibits attached with the application showed that the AGF consented, saying AGF’s reply to their letter on the order was interpreted as his consent.

He also stated that the exhibits showed the guarantee issued by the other banks, including Zenith, Access and Union Banks, adding that the exhibits also included a letter of negligence of the CBN’s lawyer.

The Ogoni lawyer told the court that Order 2, Rule 20 makes the surety a primary obligor, who had agreed to pay someone’s debit in the event the appeal of Shell failed at the Appeal Court.

He told the court that if it sees that the matter does not stop at appeal judgment, it should sue in entity, and award a punitive cost against him personally. But if the court sees that the garnishee stops at the appeal judgment, the court should order the garnishee to pay the money with substantive cost.

Nwosu said the action of the garnishee and the contemnors is a collusion one, as the garnishee filed its application to dismiss the order nisi four days after the contemnors filed theirs.

He urged the court to make the order nisi absolute, and dismissed the garnishee’s application with punitive cost.

Responding to Nwosu’s submission, Ajogwu urged the court not to make the order absolute, rather the court should dismiss it. He said it is important to rely of section 84 of Sheriff and Civil Act, as obtaining AGF’s fiat is a condition before garnishee proceeding could commence.

After listening to the submissions of all parties, Justice Buba adjourned till May 22, 2018, for ruling on both applications garnishee and contempt proceedings.

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One Comment

  1. Zik Gbemre, JP. says:

    With regards to the back-and-front bickering and complaints concerning the gross failure of Oil Multinational companies/International Oil Companies (IOCs), operating in the Niger Delta to relocate their Head Offices/headquarters to the region despite several directives from the Federal Government of Nigeria, we strongly believe that the Federal Government and its Nigerian National Petroleum Corporation (NNPC) are the ones playing politics with this issue. In other words, this is not about the IOCs flouting the Federal Government’s directive to relocate their Head Offices/headquarters to the Niger Delta region, but it is about the Federal Government/NNPC not doing what is expected of them to address this issue.
    We do not think the IOCs would readily flout a Federal Government directive on this issue if the window and situation for them to flout and neglect such a directive, was not created in the first place. in our view, we think that if the Federal Government/NNPC are truly sincere and honest in seeing their directive obeyed, then they should lead by example. In other words, if the Federal Government should, first relocate the NNPC Head Offices/Headquarters and its subsidiaries, particularly the National Petroleum Investment Management Services (NAPIMS), the Department of Petroleum Resources (DPR), and others to the Niger Delta, we are certain that the IOCs, as well as indigenous oil and gas companies and oil servicing/contracting companies will promptly relocate to the Niger Delta region, specifically to Warri and environs which is ‘centrally located’ in the region, and not to remain in Lagos and Abuja.
    In other words, the Federal Government cannot be talking about the IOCs relocating their Head Offices/Headquarters to the Niger Delta region when the NNPC, which is the National ‘Chief Operator’ with the lion share of the Joint Venture (JV) business of the nation’s oil and gas industry, is still located in Lagos and Abuja with their respective subsidiaries that are also regulating the oil and gas business. It simply does not make sense. In our view, the problem here is not really with the IOCs but with the Federal Government and its NNPC. But the NNPC, especially NAPIMS and DPR, which are the bodies that are respectively regulating the commercial aspect of IOCs and operational aspect of the oil business for IOCs and Indigenous companies, are based in Lagos and Abuja. Hence, we see all these big oil and gas services contracting firms having their Head Offices based in Lagos and Abuja as well, where ‘the corporate action in the industry is very active’ – leaving the Niger Delta region States like Delta State with the oil city of Warri and environs, without any ‘corporate action in the industry. Once the Federal Government/NNPC can address this anomaly, we believe the IOCs will not have any excuse not to relocate to their Head Offices/Headquarters to places like the oil city of Warri and environs.
    All ‘major contracts’ in the industry are being awarded through NAPIMS, which is based in Lagos. And as such, every oil and gas company and servicing/contracting company wants their businesses to stay close to those who regulate and manage the industry on behalf of the Federal Government. Same with the DPR Headquarters that is also located in Lagos. So, if the Federal Government is really serious about this ‘relocation of oil firms’ directive’ to the Niger Delta area, they know exactly what to do. Acting President Osinbajo’s directive in this regard some months ago, is just ‘a political statement’ simply made to ‘save face’. Acting President Osinbajo cannot be asking/directing IOCS and other oil companies to relocate their Head Offices/Headquarters to the Niger Delta region, whereas, the Federal Government owned oil and gas companies (NNPC Group) Headquarters are still left in Lagos and Abuja.

    Even the few NNPC subsidiaries operating in the Niger Delta like the Nigerian Petroleum Development Company (NPDC), the Nigerian Gas Company (NGC), all have their Managing Directors (MDs) Offices in the NNPC Headquarters Office in Abuja, and they work from there in most cases. That means, all major decisions concerning the industry and the operations of the NNPC subsidiaries are taken in the said NNPC Headquarters Office in Abuja. We believe if the Federal Government is sincere in addressing this issue, then the Head Offices of the Group Managing Director (GMD), Group Executive Directors (GEDs) and MDs of the NNPC Group, should be relocated to the Niger Delta region, particularly to Warri and environs which is more central for the oil and gas operations in the region. The oil and gas in the industry is daily explored and produced in the region, and then exported through the Shell (SPDC) Forcados Integrated Terminal. Chevron also has a Tank Farm and export Terminal in Escravos, all in Delta State. All the other oil and gas companies pass through the Shell (SPDC) Terminals to export their products. In other words, these are where all the ‘real actions’ in the extractive industry are taking place. so, what exactly is the NNPC Group and its subsidiaries doing in Lagos and Abuja?
    It is sad that experts and stakeholders in the industry are not looking at this aspect of the argument and the situation with this ‘oil multinational relocation’ issue. Nobody is talking about this aspect of the politics being played out by the Federal Government. Everybody is only talking about the directive given by the Federal Government but nobody is looking at the other angle, where the Federal Government’s NNPC Group needs to lead by example by doing the needful. They cannot be asking/demanding the IOCs to relocate to the Niger Delta region when the NNPC Group is hiding in Abuja doing nothing.
    The Federal Government and the NNPC should look at other developed climes and see what is obtainable there in this regard. The Headquarters and Head Offices of oil and gas companies in the United States of America (USA) are located in Houston, Texas, and not in New York or Washington D.C, not even in Austin city in the Texas State capital. Same in Canada, where the oil companies and their headquarters are not in Toronto, which is like the Lagos of Nigeria. In other words, the cities we hear of in advanced countries when it comes to such things, are not their Capital Cities and State headquarters. Amsterdam is the capital city of the Netherlands but most of their Government offices are in The Hague. Houston is the oil city in the US. Calgary is the oil city of Canadan. In fact, Calgary and Toronto are more known than Ottawa in Canada. But here in Nigeria, everything is situated/located in Abuja or Lagos. Everything, especially the ‘executive decisions and actions in the oil and gas industry, are carried out from Abuja and Lagos. And yet we keep wondering why there is always tensions and apprehension in the region. Is this not enough anomaly that can stair up agitations and complaints every now and then?
    If the above examples are the situations in advanced countries, why can’t we have same in Nigeria? If former President Olusegun Obasanjo had relocated the Nigerian Ports Authority (NPA) Head Office from Abuja to Lagos, and donated the Abuja Nigeria Ports Authority (NPA) building known as the “Ship House” to the Nigerian Defence, because he believes that the NPA has no business being in Abuja since it has no sea ports and there is no marine business there, unlike Lagos; why did he not also relocate the NNPC Group Headquarters to the Niger Delta region? These are the realities on ground which the President Muhammadu Buhari administration seriously needs to address. You don’t need a decree or any law for the NNPC, NNPC Subsidiaries, IOCs and indigenous oil and gas companies to be relocated to the Niger Delta region. No country can develop on ‘tribal sentiments’, hence it is about time we do away with it in Nigeria when it comes to doing what is right to benefit all, rather than some sectional interests.
    The truth is that the Federal Government is not sincere in its promise of directing IOCs and all indigenous oil and gas companies to relocate their Head Offices to the Niger Delta region. If they are sincere, it will show by their concrete and decisive actions. As far as we are concerned, the Federal Government is just using this ‘empty directive’ to deceive the people and save face, and that is why we consider everything that they have done about this ‘relocation directive’ as a ‘political stunt’, and another rhetoric. If the Federal Government is serious and really wants IOCs to relocate to the Niger Delta region, they know exactly what to do with the NNPC Group and all its subsidiaries, which includes NAPIMS and the Department of Petroleum Resources (DPR), as advised above – they should all have their Head Offices to be relocated to the Niger Delta region. Only then would we take the Federal Government seriously. The Federal Ministry of Petroleum Resources could be left to remain in Abuja. But the NNPC Group and all its subsidiaries should relocate to Warri, which is centrally located in the Niger Delta region. If the Niger Delta region is good and available to be explored to produce oil and gas to power local industries and power stations and for export purposes to make money for the Nigerian Government and the 36 States plus the Federal Capital Territory Abuja, then the Niger Delta region should also be good enough to have the Head Offices/Headquarters of the NNPC Group and its subsidiaries located in the region. We also wonder if the oil and gas exploration were majorly done in the South-East, South-West and Northern Nigeria, will they allow this oppression and injustice to happen and remain all these years without addressing it? Will they allow this oppression to remain? We seriously doubt it!
    The crux of the matter is that the Federal Government of Nigeria under the President Muhammadu Buhari-led administration, should do the right thing by directing the NNPC Group and all its subsidiaries to relocate to Warri, as we sincerely and honestly advised. We have been on this issue since 1999, but all the past Federal Governments had refused to heed and do the needful. Former President Olusegun Obasanjo only corrected the NPA’s Head Office relocation to Lagos, while he left the relocation of the NNPC Head Offices/Headquarters untouched and refused to correct it. It is even more painful that former President Goodluck Jonathan, who was from the Niger Delta region, was unable to correct this anomaly, which is why we are calling on President Buhari to right this wrong for the good of all.
    Zik Gbemre, JP.