The litigation relates to a corruption case in which Shell was ordered to pay $48 million (£29.4m) in civil and criminal fines after its contractor (Panalpina Inc.) bribed Nigerian customs officials. It appears Shell decided to make Robert Writt the fall guy for Shell’s involvement in the massive corruption scheme (targeting officials of a host country) by turning Writt in to the US federal authorities in the belief that Shell was safe from legal retribution by him. The Appeals Court decided otherwise.
By John Donovan
The Texas Supreme Court has agreed to hear Shell Oil Co.’s argument it shouldn’t have to face defamation charges from a former Shell Project Manager, Robert Writt who the company reported to federal authorities as potentially responsible for a Foreign Corrupt Practices Act violation at a Nigerian oil and gas project.
Shell is appealing a lower court ruling that cleared the way for Writt to continue pursuing a defamation claims against Shell.
Shell had managed to have the case blocked on a legal technicality, but the Court of Appeals of the first District of Texas overturned the decision.
The case is:
NO.01-11-00201-CV ROBERT WRITT, Appellant
SHELL OIL COMPANY AND SHELL INTERNATIONAL, E&P, INC., Appellees
I have provided access to a bundle of court documents running to 143 pages, which includes a judgement and opinion rendered on 25 June 2013.
The appeals court ruled that Shell Oil Co could potentially be held liable for defaming Robert Writt when it informed federal authorities that he had violated the Foreign Corrupt Practices Act while working for Shell.
The litigation relates to a corruption case in which Shell was ordered to pay $48 million (£29.4m) in civil and criminal fines after its contractor (Panalpina Inc.) bribed Nigerian customs officials.
Extract from Daily Telegraph article from November 2010 headlined: Shell to pay $48m Nigerian bribe fine
Four of Panalpina’s other clients in addition to Shell were also fined, including Transocean, Tidewater, Pride International and Noble Corp.
“These companies resorted to lucrative arrangements behind the scenes to obtain phony paperwork and special favours, and they landed themselves squarely in investigators’ crosshairs,” said Robert Khuzami, the director of enforcement at the US Securities and Exchange Commission.
Shell contended that the report it supplied to the US Dept of Justice after conducting a two year long internal inquiry at Shell, which cost the company $10 million, was protected by absolute privilege and consequently it was immune from the defamation law suit brought against the company by Robert Writt.
However, the Appeals Court decided that Shell could not evade Writts defamation suit on these grounds.
Writt filed his suit against Shell Oil Co in 2009, alleging wrongful termination and defamation arising from the companys report to the Dept of Justice that had implicated him in the Panalpina bribery scheme.
It appears that Shell decided to try to make Robert Writt the fall guy for Shell’s involvement in the massive corruption scheme (targeting officials of a host country) by turning Writt in to the US federal authorities, in the belief that Shell was safe from legal retribution by him. The Appeals Court decided otherwise.
Panalpina agreed to pay $11.3 million in the SEC case and $70.6 million in the DOJ case. It had allegedly paid out bribes totaling over $27 million to officials in countries including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria and Russia.
Shell and its affiliates paid $18.1 million in the SEC case plus a $30 million criminal fine for its role in Foreign Corrupt Practices Act violations that included supplying $2 million to subcontractors to fund Panalpina bribes paid to Nigerian customs officials.
13-0552 — Shell Oil Co. v. Writt — The U.S. Department of Justice made an inquiry of Shell about possible bribery related to a Shell project in Nigeria. Shell then performed an interal investigation, and later gave the DOJ a copy of Shell’s internal report, in which Shell accused the plaintiff (who was a Shell employee) of unethical behavior. The plaintiff sued for defamation. The principal issue on appeal is whether Shell is protected by the absolute privilege even though the DOJ had not brought formal charges when Shell produced the internal report. The court of appeals held that Shell was entitled only to a conditional privilege.