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allAfrica.com: Shell in Court, Seeks $500 Million Damages From FG

Daily Champion (Lagos)
16 May 2007
Malachy Uzendu

Shell Petroleum Development Company of Nigeria Limited (SPDC) yesterday returned to the court as it filed a new suit against three foreign companies that participated in last Friday’s bidding exercise for oil blocs that had been subject of litigation and pending at a Federal High Court in Abuja.

SPDC in the suit, is asking the court to award the sum of five hundred million dollars (USD500m) as damages against the three companies for unlawful interference with SPDC’s contract in respect of Oil Mineral Licencees (PLM) 13 and 16.
 
The company also prayed the court to compel the companies to pay the huge sum if it is satisfied with appropriate reasons within 30 days.

The giant oil company is pressing the demand of the amount on the ground that the companies are foreign companies without a local address in Lagos or anywhere in the country.

It also alleged that “the address given by one of the companies on Victoria Island in Lagos is a residential apartment inhabited by some foreigners.

“That there is no traceable apartment inhabited by the companies within Nigeria that could satisfy whatever judgment that may be obtained against them.

“The three companies sued alongside the Department of Petroleum Resources Repsol Nigeria Limited (Spanish) of Pasco de la Castellana, 278-280, 28046, Madrid Spain, Centrica CCC Oil and Gas (UK) of Centrica Plc, Millstraem, Maideenhead Road, Windsor, Berkshire, SL4 5GD and Sterling Global E&P (Indian) of C-25 Laxmi Towers, A-601, 6th Floor, Bandra Kurla Complex, Bandra (East), Mumbai India”.

Already an affidavit of urgency has been filed at the court in which SPDC asked for expeditious hearing because the three foreign companies had manifested their intention to start operation on OMLs 13 and 16, even while the matter is subjudice (subject matter of in court).

Also, Shell equally filed an ex-parte application for an interim injunction restraining the companines from carrrying on with any business in the disputed oil blocks pending the determination of the suit.

SPDC in the affidavit stated that, “unless the plaintiff’s applications are heard expeditiously, this suit will be rendered useless by the defendants.”

Counsel to SPDC, Chief Afe Babalola (SAN) has also filed another application seeking for the court’s leave to serve the three companies with the writ of summons and other processes in the suit in their various addresses outside Nigeria.

SPDC is claiming against the 4 defendants jointly and severally as follows:

A declaration that the refusal of the defendants to exclude OMLs 13 and 16 from the bidding exercise of 11th May 2007 despite their knowledge of the order of court made on the 9th of May is wrongful, disrespectful to the court and inimical to the proper administration of justice in Nigeria.

A declaration that the conduct of the 1st to 3rd defendants in participation in the bidding exercise of OML 13 AND 16 on 11th of May 2007 despite their knowledge of the order of the Federal High Court presided over by Hon. Justice B.F.M. Nyako made on the 9th of May 2007 is wrongful, disrespectful to the court and an attempt to ridicule the administration of Justice in Nigeria.

An order of court setting aside all the steps taken by the 1st to 3rd defendants in respect of OMLs 13 and 16 on May 11, 2007 or any other date after the order of the Federal High Court presided over by Hon. Justice B.F.M. Nyako made on May 9, 2007.

A declaration that the conduct of the 1st to 3rd defendants in their dealing with the 4th defendant in spite of their knowledge of the plaintiff’s contract and interest in OMLs 13 and 16 amounts to wrongful interference with plaintiff’s existing contract on the said oil blocs.

A DECLARATION that the conduct of the 1st defendant in approaching the 4th defendant for an interest in what is now known as OPL 2001 which is part of the plaintiff’s OML13 and bidding for it in defiance of court order is wrongful interference with the plaintiff existing contract.

A DECLARATION that the conduct of the 2nd defendant in approaching the 4th defendant for an interest in what is now known as OPLs 2002 and 2003 which are part of the plaintiff’s OML13 and bidding for them in defiance of court order is wrongful interference with the plaintiff’s existing contract.

A DECLARATION that the conduct of the 3rd defendant in approaching the 4th defendant for an interest in what is now known as OPL 2004 which is the plaintiff’s OML16 and bidding for it in defiance of court order is wrongful interference with the plaintiff existing contract.

Similarly, it prayed for an order of injunction restraining the defendants, their agents, privies, assigns, or anybody howsoever described from further dealing with or carrying out any activity on OMLs 13 and 16 or any part of the oil blocs no matter the name 4th defendant chooses to call it

Also, it sought for an order restraining the 4th defendant their agents, privies, assigns or anybody howsoever described from alienating or transferring or conferring any benefit in respect of OML 13 and 16 or any part of it in whatever name it is called on the 1st to 3rd defendants or any person or body whatsoever. $500,000,000 (Five Hundred Million US Dollars) damages against the 1st to 3rd Defendants for unlawful interference with the Plaintiff’s contract in respect of OMLs 13 and 16.

The court had on Wednesday last week, renewed its order stopping the Federal Government from offering for sale Oil Mining Licenses 13 and 16 until May 17 when it will deliver a ruling on a preliminary objection filed by government to the SPDC’s suit.

Justice Binta Murtala-Nyako made the order after counsel to Shell Petroleum Development, Mr. Adebayo Adenipekun SAN from Chief Afe Babalola SAN Chambers had told the judge that the Federal Government carried an advertorial in the Daily Trust newspaper asking prospective bidders to go ahead and bid for the said OMLs in sheer disregard of the court order which had directed the parties to maintain the status quo.
 
Government indeed went ahead to sell the oil blocs.

Justice Murtala-Nyako who was vividly angry after the advertisement in the Daily Trust was read to her could not hide her disapproval of the action taken by the government.

She said: “The OMLs should not be sold until I give my ruling on the preliminary objection.”

But counsel told the government, Mr. F.F. Akinlodun insisted that government had not done anything in respect of the OMLs.

Akinlodun was caught shot by the judge who interrupted him saying, “What will happen if the OMLs are sold before I deliver my ruling? Will that not amount to overreaching this court?

“I am going to reduce this order into writing. I repeat, OMLs 13 and 16 or whatever you call them should not be sold until I deliver my ruling on May 17.

“The OMLs should remain in the custody of whoever they are presently and not be sold.”

The court had on April 27, made an order directing Shell Development Company (plaintiff) and the Minister of State for Petroleum Resources, The Department of Petroleum Resources and the Attorney General of the Federation (defendants) to maintain the status quo.

But when it became obvious to the company that government was going ahead to sell the OMLs, Shell went to court asking the judge to reduce her order directing parties to maintain the status quo into writing to enable Shell advertise same in national dailies and serve it on all the defendants.

Government opposed the application.

In a counter affidavit, it said that reducing the order into writing would amount to issuing an order of interim injunction which the court had earlier refused.

Akinlodun who argued the counter affidavit said that government had not done anything on the OMLs notwithstanding the advert in the Daily Trust newspaper.

He said that the advert was not on OMLs in dispute.

Following plans by government to offer the OMLs for bidding SPDC went to court to stop government from carrying out the bidding because it would prejudice the dispute between the company and government which was to be referred to arbitration.

SPDC had gone to court for an order stopping government from prejudicing the arbitration proceedings with the bidding exercise in relation to OMLs 13 & 16, or assigning, allocating or in any way interfering with the OMLs pending the final conclusion of the Arbitral proceedings being sought for in the originating summons.

Government had objected to the suit on the grounds that it was statute barred.

It said that that since the letter withdrawing the said OMLs from SPDC was dated October 26, 2006, the cause of action arose in October 2006 but that SPDC instituted the action on the 24th April 2007 seven months after the cause of action had arisen contrary to Section 2 (a) of the Public Officers Protection Act 379 Laws of the Federation of Nigeria 1990.

Government had argued that SPDC was awarded the two licenses about 18 years ago and had failed refused to develop the licenses in businesslike manner as required by the Petroleum Act.

Government said that it had demanded from SPDC an explanation as to why OMLs 13 and 16 have not been fully active during the last ten years.

It further stated that it (government) held series of meeting with SPDC but that SPDC could not offer any cogent reasons why the OMLs remained in active for several years.

After hearing the arguments of the preliminary objection, Justice Binta Nyako adjourned the case to May 17 for ruling.

Fearing that the subject matter of the suit would have been tampered with before the ruling on the preliminary objection is delivered, Mrs. Remi Awe-Osho asked the court to grant an order for the maintenance of the status quo.

Justice Nyako obliged.

Shell Petroleum Development Company Ltd was allotted Oil Mining Lease 13 & 16 by the Federal Government through the Department of Petroleum Resources for a term of 30 years commencing from July, 1989. The OMLs were to be jointly funded by Shell & NNPC.

http://allafrica.com/stories/200705160763.html

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