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MALABU: London Court Throws out Nigeria’s $1bn Suit

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Following the Malabu oil deal which gave rise to controversies over the years, a London judge has ruled that Nigeria’s $1 billion suit against oil giants Shell and Eni cannot go ahead in England.

Christopher Butcher, the High Court Judge on Friday, May 22, has said the court does not have the jurisdiction to hear the claim.

He said in a statement he signed that the English case has both the same essential facts and parties as parallel proceedings in Italy both brought by the Nigerian government over the Malabu deal.

According to Premium Times, both oil giants argued to stop or stay proceedings in the $1 billion lawsuit brought by the Federal Republic of Nigeria (FRN).

Virtual hearings in the case took place last month, during which the companies argued to halt the $1 billion English suit as duplicating the ongoing criminal trial and parallel civil claim being brought by Nigeria in Italy over the controversial OPL 245.

The defendants – Eni, Shell and others – asked for the court to decline jurisdiction under article 29 of the recast Brussels Regulation, as the Italian case against the companies is still in progress.

The Nigerian government, in March, lost out on its bid to postpone the massive claim against the oil giants, Eni and Shell, in a London court. Mark Pelling, a judge at the London court, ruled that it should not wait for a connected Italian ruling.

Nigeria wanted the court date postponed from April until January 2021, when a connected criminal case in Milan is expected to have concluded.

Malabu’s history is not uninteresting, two days after it was registered, the then Petroleum Minister, Dan Etete awarded two oil blocks to the company.

The blocks were marked OPL 245 and OPL 214. The death of General Sani Abacha played a major role in the future of Malabu as it marked a new turn for the company. Mohammed Sani Abacha was tactically schemed out of Malabu. In July 1998, a month after Abacha’s death, Malabu’s Company Secretary, Rasky Gbinigie wrote a letter to the Corporate Affairs Commission stating that sequel to a Board of Directors’ meeting held on the 2nd June, Mohammed Sani had agreed to a 60% reduction of his shares and also decided to resign as a Director thus leaving Amafegha as the major shareholder.

The Street Journal gathered that the meeting referred to in the Company Secretary’s letter to the Corporate Affairs Commission never held. A petition was also forwarded to the EFCC by Abacha’s lawyer making the same claim. The CAC approved the new constitution of the company on the 29th July, 1998 with Amafegha holding 10 million shares, Adamu 6 million, Sani 4 million and Aliyu Jabu was named as the company’s Managing Director.

Another amendment was made through a letter to the CAC, signed again by Gbinigie in January, 1999. The letter contained a resolution from a Board meeting of November 27, 1998, that showed that Malabu had a new structure with Aliyu Jabu now holding 16 million shares while one Seidougha Munamuna holds 4 million shares. Abacha and Adamu thus left the picture.

Meanwhile, Malabu had appointed Shell Nigeria Ultra Deep Limited (SNUD) as Technical Partner.

Street Journal also found out that big time power brokers later emerged and there arose a scramble for the oil block which eventually led to the revocation of the block’s allocation by the Federal Government in 2001.

The block became a “prize” in which the then President and his vice had personal interest. The Federal Government thereafter invited Exxon Mobil and Shell to bid for the same oil block, the reallocation of which spurred Dan Etete’s Malabu into a long legal battle.

Officials affected in the scandal have denied allegations. A three-day hearing was held over the case in April.

Richard Handyside, who represented Eni on the first day of the hearing outlined the similarities between the Italian criminal charges and civil claim based on international bribery charges and the English claim based on allegations of bribery, dishonest assistance and conspiracy.

Eni’s lawyer noted that the companies have made no profit on the deal as “the FRN has declined to grant a mining license” without which no oil can be produced and no profits made. He argued further that the FRN has brought two duplicative claims in Italy and England within months of each other and that the FRN acknowledged that they might have to choose between them down the road. They were hoping to have a “one way bet,” according to Eni.

Eni argued that Nigeria is wrong to say the Italian claim is different because the Public Prosecutor of Milan (PPM) is involved, adding that the PPM is not involved in civil claim in Italy and the FRN is the sole plaintiff for harms suffered as an injured person. The FRN’s point that the Milanese prosecutor could chose to end the case in Italy whenever they want, without the FRN having a say in that scenario, is not relevant, the lawyer added.

After a short break, Eni’s lawyer resumed to argue that while the FRN is asking the court to rescind the 2011 deal for the license, neither the company nor Shell were parties to the contract because their subsidiaries were. The oil giant argued further that President Muhammadu Buhari has ruled against issuance of licence.

Speaking on behalf of Shell on the second day of the trial, Peter Goldsmith argued that the FRN failed to bring the contents of two 2012 reports by the Economic and Financial Crime Commission (EFCC) to the attention of the judge who oversaw their application.

Mr Goldsmith explained that Nigeria has not presented evidence of what it knew about the EFCC 2012 reports. Shell is alleging that the FRN failed to give Justice Cockerill full and frank disclosure when she was asked to give them permission to serve out of jurisdiction. Shell argued that the FRN should have fairly presented the potential defence and evidence that the FRN did know about wrongdoing earlier.

The lawyer, on behalf of Shell, claimed that the FRN seriously misled Justice Cockerill by saying that evidence of alleged wrongdoing in the OPL 245 did not become apparent until it came out of the Italian investigation.

According to him, it took many weeks of chasing for the FRN to disclose the EFCC reports with little explanation of why the FRN failed to inquire into the existence of these reports earlier, adding that responses to Shell’s letters on the EFCC report were “evasive”.

FRN’s lawyer, Roger Masefield, responding to the allegation by Shell that they did not make full and frank disclosure, argued that Shell’s serious allegation is in danger of “Island hopping”, skipping over the FRN’s submission without context.

Mr Masefield explained that the court was told that in 2012 the EFCC was investigating, was told about the House of Representatives investigation, but the alleged wrongdoers were in control of the FRN at the time, so time should not run on limitation at that time. The EFCC discovery in 2012 is irrelevant because the wrongdoers were in control of the Nigerian government in 2015, he said. He explained further that the FRN also did not have enough credible evidence to plead the claim of fraud at that time.

On the third and final day of hearing, Mr Masefield resumed addressing the defendants’ argument that the FRN didn’t make a fair presentation to the court in the hearing with notice before Justice Cockerill, adding that the evidence from the Italian investigation was very different to the EFCC 2012 probe.

The lawyer said that it would be unfair to read one line from the FRN’s solicitor’s witness statement out of context, instead he did flag to the court a few lines earlier that the EFCC had begun investigations. He then said it was in the Italian investigation that “the scheme” emerged.

Mr Masefield explained that the FRN’s solicitor, Mr Cary, did set out the evidence emerging from the Italian investigation into the OPL 245 deal with FBI interviews with participants in the deal, money flows, wiretaps, evidence of a kickback scheme etc. The lawyer said that Mr Cary explained that it was only with this new “credible evidence” that the scheme was revealed involving alleged bribes to then current Nigerian public officials including Messrs Jonathan and Adoke, ex-petroleum minister Diezani Alison-Madueke and a retired general, Aliyu Gusau.

The lawyer said that there was certainly no material misrepresentation, that they did raise the time limitation defence about when the FRN had reason to know about the alleged fraud and wrongdoers in control point which would have to be decided at trial.

Mr Masefield argued further that the money flows to Aliyu Abubakar and cash could not prove that bribes were going to Goodluck Jonathan, at most it could have been understood that Dan Etete, a convicted money launderer, was trying to launder money from the deal. He explained that the 2012 investigation was not into Shell and Eni or what they may have known about bribes, so there was no way the FRN could have argued a case against them at that time.

According to him, the EFCC’s knowledge in 2012 would not have been sufficient to argue there was this case of fraud, adding that the FRN legal team strongly disputes any allegation that they deliberately withheld the 2012 EFCC reports.

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