As part of efforts to recover funds lost by the country through the controversial Malabu Oil deal, the Federal Government has initiated two suits against American bank, JP Morgan Chase and two multinational oil companies – Royal Dutch Shell Plc and Eni.

Salihu Isah, spokesman to the Minister of Justice and Attorney General of the Federation (AGF), Abubakar Malami (SAN) said, in a statement on Friday, that in the first of the two suits, now pending before the Commercial division of the High Court in London, the FG is claiming $875m against JP Morgan for allegedly allowing the misappropriation of state funds over the Oil Prospecting License, OPL 245.

Isah said it is part of the FG’s claim that the bank allegedly failed in its duty of care to a customer when it purportedly allowed the withdrawal of the said amount from its account with the bank, for payment to some beneficiaries of the Malabu Oil deal. He noted that in the second suit, the FG is claiming $1.1b against Shell and Eni to “recover the very significant sums lost to corruption and the unlawful activity” of the two energy majors.

He said the London court, in a ruling on Thursday, rejected the objection raised by JP Morgan against the suit brought against it.

Isah quoted Justice Andrew Burrows as saying, in the 26-page verdict, that Nigeria has “reasonable grounds” for bringing a claim to the commercial division of the High Court, meaning it can now proceed to trial.

According to Isah, Justice Burrows said “The defendant bank has failed to establish that the claimant has no real prospect of success.”

Isah added: “According to him (the judge), the bank ought to suspect the payments were fraudulent and therefore had a duty to protect the Federal Republic of Nigeria until its concerns were cleared up.

‘That duty of care entails that the defendant bank could not simply follow the mandate of abiding by the instructions given by the claimant, because the bank’s duty of care, as its core, was to protect the claimant against being defrauded by not paying out unless and until it was ‘off inquiry’, the judge said.

Isah said, “at a hearing this month, JPMorgan Chase had argued that the case should be dismissed as it had received sufficient approvals from Nigerian authorities before allowing the transfer of funds from a government account to those controlled by former Minister of Petroleum Resources, Dan Etete.

“The payments, after a 2011 settlement, aimed to end several years of battle over the ownership of a lucrative, but controversial oil licence that has ensnared Royal Dutch Shell and Eni in corruption investigations in Milan, Italy.

“The licence for the oil block was shuffled back and forth between Shell and Malabu Oil & Gas, a Nigerian oil company controlled by Etete and which was first awarded development rights in 1998 when he was the Minister, but he has denied any wrongdoing.

“Even as the bank had said it had ‘no responsibility’ to look behind any payment instructions, the judge said this was not consistent with the agreement the bank had with its client.

“However, the bank was quoted to have said after the judgement on Thursday, that; ‘While today’s judgment is disappointing, it does not address the underlying claim, which we continue to believe is completely without merit. JPMorgan complied with its legal and regulatory obligations in respect of the payments concerned and will defend the claim robustly at trial.’

“The Federal Government said it was now set to going on with its claim and had ‘full confidence that JPMorgan Chase will be held to account for its actions.’

Isah said the suit against Shell and Eni is intended to “recover the very significant sums lost to corruption and the unlawful activity” of the two energy majors. On its part, Shell and Eni have said their deal with the Federal Government was legal and that the payment was made to the state and they had no part to play in what happened to the money afterwards.

“It will be recalled that several recipient banks also refused to accept the payments and returned the money to JPMorgan as a result of compliance issues, according to the suit,” Isah said.

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