Shell Nigeria appeal dismissed in Bonny land dispute

Thu May 5, 2011 1:29pm EDT

* Court rules in favour of local communities in land dispute

* Shell appeals decision again

* Dispute has had no operational impact

By Austin Ekeinde

PORT HARCOURT, Nigeria, May 5 (Reuters) – A court in Nigeria’s oil-producing Niger Delta on Thursday dismissed an appeal by Royal Dutch Shell (RDSa.L) in a land rights dispute with community elders over its Bonny oil export terminal.

The court in Bori, in the southern state of Rivers, found in favour of local elders three years ago who disputed the right of the Shell Petroleum Development Company (SPDC) — a joint venture with the Nigerian state — to use the land at Bonny.

Shell filed an appeal against that ruling but a court in the state capital Port Harcourt dismissed it on Thursday.

“(The original judgement) said that Bonny communities are the rightful holders of the certificate of occupancy of the land currently being occupied by Shell as tenants,” said Emmanuel Asido, one of the lawyers representing the communities.

“Justice Ekembi Eko upheld that judgement and said that Shell failed to convince the court that they have the certificate of occupancy on the land,” he said.

Shell said it was appealing to the Supreme Court.

“We believe the judgement is wrong,” Shell spokesman Precious Okolobo said.

“We are also filing to suspend enforcement of the earlier judgement … pending the determination of the appeal.”

Bonny is home to major crude oil and liquefied natural gas (LNG) export terminals but the dispute has had no impact on operations because Shell’s appeals have meant that the legal process continues.

Relations between foreign oil firms and local communities have long been fragile in the Niger Delta, home to Africa’s biggest oil and gas industry but hobbled by poverty.

Foreign oil firms pay billions of dollars a year in royalties but corruption and mismanagement by government means relatively little of the funds go towards community development.

Multi-billion dollar oil installations sit among polluted villages nestled in its labyrinthine mangrove creeks, many of them lacking electricity or clean water.

Foreign investors say Nigeria ranks among the most litigious and bureaucratic business environments in the world. Legal disputes commonly take years to settle, usually becoming bogged down in a tangle of counter-claims and appeals.

(For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Writing by Nick Tattersall)

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