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Nigeria: Court Stops Shell From Terminating Company’s Contract

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allAfrica.com: Nigeria: Court Stops Shell From Terminating Company’s Contract

This Day (Lagos)
2 May 2008
Davidson Iriekpen
Lagos

A Lagos High Court has restrained oil giant, Shell Petroleum Development Company of Nigeria Limited (SPDC) from terminating a three-year contract between it and an indigenous auto engineering firm, Doyin Motors Limited.

The order was sequel to an ex-parte motion filed for the firm by one Mr. Seni Adio of the law firm of Copley and Partners, accusing Shell of some underhand dealings meant to frustrate the contract with the aim of re-awarding same to a firm with foreign bias.

Named with Shell as defendants in the substantive suit, are Mandilas Enterprises, Access Bank Plc and First Bank Plc.

Presiding judge, Justice Sunday Oladokun Ishola specifically restrained Shell and her agents from terminating the said contract numbered “S14866 for Operation and Maintenance of SPDC Owned Light Vehicles in the Western Region” to prevent further negative implications to the plaintiff.

The Court also restrained Shell and her agents from re-awarding the contract to Mandilas Enterprises Limited as alleged by the plaintiff); further undermining the plaintiff’s relationship with her employees and impeding or interfering with Doyin Motors’ performance of services contained in the contract.

Justice Ishola equally restrained Access Bank Plc and her agents from making any payment from the plaintiff’s account without the authorization of Doyin Motors’s Managing Director. The bank is also to desist from taking instructions from Shell to make payment from the said account.

Doyin Motors, in a statement of claim stated that the contract was awarded to it after wining the bid in late 2005 and early 2006 which was to terminate in December 2008.

According to the firm (plaintiff), all had gone on well between parties to the contract until Shell allegedly began undermining the contract’s terms. It equally alleged that Mandilas, who provided similar services for Shell until late 2005, was taking steps to frustrate her efforts in successfully executing the said contract.

Citing an instance of Shell’s alleged breach of the contract terms; Doyin Motors stated that contrary to agreement that Shell must “initiate payment upon 45 days of receiving the plaintiff’s invoice for services rendered,” Shell had neglected to pay for services provided in respect of the contract for upward of 27 months now.

The plaintiff added that as a result, Shell was indebted to her in the excess of N300 million, adding that the oil company’s actions have negatively affected her operations and relations with her banker, Access Bank from whom it got a loan of N80million to finance the contract.

The plaintiff accused Access bank of equally undermining an existing agreement between them in respect of the loan by allegedly collaborating with Shell to subvert her interest.

According to Doyin Motors, there was an agreement between her and Access bank that, while all proceeds from the Shell contract would be paid into a designated account marked 04503478 opend at the bank’s Warri (Delta State) branch, the bank would only pay Plaintiff’s employees’ salaries upon the receipt of a signed cheque to that effect from Doyin’s MD, Mr. Ayorinde Adedoyin.

The plaintiff claimed that the bank, acting in collaboration with Shell, ignored their agreement in respect the process of paying her (Doyin’s) staff salaries and had continued to pay them without the plaintiff’s knowledge and authorization.

Doyin Motors who alleged that the various actions of the defendants were meant to frustrate her and pave way for the re-award of the contract to Mandilas said it was aware of plans by Shell to unilaterally terminate the said contract without recourse to due process.

It therefore asked the court for perpetual restraining orders against the defendants and their agents, and an award of N900million against Shell as cost of both general and specific damages suffered by her so far. Hearing resumes May 6 this year.

http://allafrica.com/stories/200805020140.html

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