Court Orders Shell to Forfeit Biggest Oil Terminal in Africa

By Davidson Iriekpen, 10.15.2008

A Rivers State High Court sitting in Bori has ordered multi-national oil giant, Shell Petroleum Development Company (SPDC), to forfeit its oil terminal situated in Bonny Island to the indigenes of the area.

The court axed the oil giant for going behind the natives to obtain a Certificate of Occupancy (C of O) in respect of the same land from the Rivers State Government without the consent and knowledge of the land owners.

The terminal, which houses Shell’s oil tank farm and believed to be the biggest oil terminal in Africa, at present has a storage facility of over 12 million barrels of crude oil export terminal, a helicopter landing pad, a facility capable of loading supper tankers, an indoor berthing facility to take six ocean-going tankers, an expatriate club, and residential quarters among others.

Presiding Justice M. O. Opara, in his judgment, declared that at all material times, the claimants as customary owners and consentors, are the landlords of Shell in respect of all the piece or parcel of land lying between the towns of Bonny and Finima in the Bonny Local Government area of Rivers State contained in a Deed of Tenancy made on July 22, 1958 and registered as No. 51 in volume 5 of the Lands Registry in the office at Enugu now kept in Port Harcourt.

Justice Opara noted that upon the coming into effect of the Land Use Act in 1978, the claimants were deemed to be grantees of or holders of the right of occupancy over the land covered by the said deed of tenancy.

He ruled that Shell by obtaining secretly from the Rivers State Government, without the knowledge and consent of the claimants, a C of O in respect of the land covered by the said Deed of Tenancy and which C of O is registered as No 33 on Page 33 in volume 258 of the Lands Registry in the office at Port Harcourt is unconstitutional, null, void and of no effect.

The judge further stated that before the said C of O was granted to the oil giant by the River State Government, the claimants’ deemed right of occupancy over and in the said land was not revoked and the said right of occupancy was still existing and subsisting.

He submitted that the act of Shell in obtaining clandestinely the C of O over the claimants’ land constituted a challenge or denial of the title of the claimants as landlords of Shell and for which challenge, Shell has forfeited its right as a tenant in respect of the said land.

The court also set aside the C of O and further ordered Shell to forfeit the land, the subject matter of the suit.

In setting aside the C of O, the court said: “Shell is ordered to forfeit it’s right as a tenant under the 1958 Deed of Lease for the direct denial of it’s landlords title by setting up a rival title; the Certificate of Occupancy which is now a replacement for the 1958 lease agreement.”

The court had earlier formulated six questions for determination, whether the claimants leased the said land to Shell; whether Shell applied for and obtained a C of O with respect to the land leased to them by the claimants; whether Shell sought the consent of the claimants before applying for the said C of O; whether the claimants are entitled to order of forfeiture and whether Shell was entitled to the counter claim sought in the suit.

According to the court, “From all the processes before me, it is not in dispute that the claimants’ families are original owners of the land lying and being between Finima and Bonny in the Bonny Local Government area of Rivers State. While the claimants are saying that Shell obtained secretly from Rivers State government, the C of O without their knowledge and consent, Shell is saying that it informed the claimants before applying for the said C of O.”

The court further said: “In some parts of Nigeria, like where this court is located, a purchaser of land is like one marrying a wife from a family under native law and custom. This shows how precarious land is in Nigeria. Bearing in mind the importance of land to native communities, the Land Use Act provided for owners of land before the Act came into force to be regarded as deemed holders of right of occupancy over the land”.

According to the court, “The rights and interest of the claimants and that of Shell as landlords and tenants remained intact and were recognised by section 36(4) of the Act until the governor of the state, following due process of law revokes the right of occupancy granted to the holder. On the strength of decided authorities and the Act itself, I do not think that a tenant/leaser in the instant case, Shell, can translate into a holder by virtue only of the customary agreement of 1958 since Shell is not the owner of the land or landlord or lessor.

“I also do not think the Act intended a reversal of status where a tenant becomes a landlord. If that is the case, what does the landlord become?

“The action of Shell in surreptitiously applying for and obtaining a Certificate of Occupancy over the land of its landlord covered by the Deed of Lease of 1958 without the knowledge and consent of its landlord and without publication and payment of compensation by River State government, that issued the said Certificate of Occupancy is a clear case of setting up adverse title to an existing right on the land. “This action of Shell not only smacks of malice but greed and therefore not worthy of any form of sympathetic consideration. Accordingly, I feel no hesitation whatsoever in setting aside the said Certificate of Occupancy for being unconstitutional, null, void and of no effect.

The law remains that a right of occupancy whether statutory or customary creates priority of estate so as to render null and void any subsequent Certificate of Occupancy issued in respect of the same parcel of land unless the right of occupancy is validly revoked by the appropriate authority before the issuance of a Certificate of Occupancy in respect of that same parcel of land to another person.”

All efforts to get officials of Shell to react to the judgment last night failed as the officials were unwilling to respond to the matter.

Shell by an agreement dated July 22, 1958, entered into between the Bonny land owners, represented by Chief Henry Brown and Chief Victor Jumbo, agreed to use the land at a rent of more than two pounds, which from 1962 became payable yearly, but Shell, without consulting the Bonny land owners, obtained a C of O, dated March 18, 1998, which purports to turn it (Shell) into the landlord, rather that a tenant it was by the July 22, 1958 agreement.

Following an investigation by Mr. Lucius Nwaosu (SAN), counsel to the Bonny people and discovering the said C of O in favour of Shell, in respect of the same land, covered by the July 22, 1958 agreement, the Bonny people approached the Rivers State High Court to determine the legality or otherwise of the said C of O.

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