UK court ruling knocks back Rivers govt’s bid to acquire Shell’s oil asset in Ogoniland

UK court ruling knocks back Rivers govt’s bid to acquire Shell’s oil asset in Ogoniland

December 8, 2019: Bassey Udo

Last Thursday’s ruling of a UK high court rejecting a request by the Ejama-Ebubu community in Tai Eleme Local Government Area of Rivers State has put a wedge in the attempt by the Rivers State government to acquire a stake in a disputed mining lease in Ogoniland.

The lease located in the oil mining concession OML 11 is operated by Shell Petroleum Development Company (SPDC). It has been the subject of prolonged litigation by the community and Shell.

The community had accused the Dutch firm of responsibility for a massive 1969/70 oil spill allegedly from a ruptured oil pipeline in its facility.

Following the spill, the community filed an application for compensation, claiming the pollution devastated their environment and property of individuals and families.

Court grants compensation to community

After years of litigation, the appeal court on June 14, 2010, awarded the community N15.41 billion for damages suffered as a result of the pollution.

But, Shell filed a petition to object to the court’s ruling. The company said the spill was a third party incident as it occurred during the civil war.

“The spill was caused by third parties during the Nigerian Civil War, a challenging period which resulted in significant damage to oil and gas infrastructure in the region,” Shell spokesperson, Bamidele Odugbesan, said on Friday in a telephone interview.

“While SPDC does not accept responsibility for these spills, the affected sites in the Ebubu community were fully remediated.

Also, Shell said it objected to the ruling on the ground that the judgment amount of N182.8 billion, including compound interest, registered in court as compensation was based on the community’s computation.

But, while Shell’s appeal was still pending, the community proceeded on February 25 this year to seek the registration of the order for enforcement as a judgment in the UK high court.

Those familiar with the matter told PREMIUM TIMES that the implication of taking the court order to register in a UK court was to confer on it the status of a judgment of the court.

Legal experts said registering the order of a Nigerian court in the UK court was to give community representatives easy access to Shell asset in Europe and around the world for enforcement.

However, Shell did not raise objection apparently on the ground that the request for registration of a court order should normally be within a year. But, the request was made more than eight years after the court’s ruling.

Court sets aside community request

Based on a request by Shell on May 28 this year, the UK court on Thursday granted the application setting aside the order for the community to register the judgment pursuant to section 9 of the Administration of Justice Act 1920.

Shell said its application was based on the provisions of Section 9(2)(e) of the Administration of Justice Act 1920 which prohibits registration since its appeal was still pending before the Nigerian Supreme Court.

The company also argued that it was not “just and convenient” for the judgment to be enforced in the UK considering that it suffered a substantial breach of natural justice during the proceedings in Nigeria prior to the judgment.

The British court presided by Jason Coppel, a Deputy Judge of the High Court, also refused the community’s application for permission to file an appeal.

On January 11, Shell filed an appeal at the Supreme Court against the ruling of the Court of Appeal. But, the appeal was dismissed because the appeal was based on “grounds of fact or at best of mixed law and facts”

Wike announces acquisition of disputed asset

While the case was going on, the Rivers State Governor, Nyesom Wike, on September 30, announced that his government had “fully acquired” from Shell the interest in the disputed oil mining lease (OML 11) it controls in  Ogoniland.

Mr Wike said the state government had submitted a bid of $150 million for 45 per cent equity in the asset reputed to hold about 250,000 barrels per day (BPD) of oil potential.

A source close to the community told PREMIUM TIMES that following the ruling of the Federal High Court in 2010, the community immediately claimed ownership of the oil asset.

The source who requested his identity not to be disclosed said the community may have entered an agreement with the state government to dispose of the asset after the court ruling, despite the pending appeal on the matter.

But, Shell denied the acquisition by the state government of the oil concession, which it owns jointly with the Nigerian National Petroleum Company (NNPC).

In a statement quoted by Reuters, the oil firm declined to confirm or deny the sale.

“The announcement by the Rivers state government is in respect of the asset of SPDC which form part of a matter that is pending in court, for which reason we are unable to make further comment,” Shell said in the statement quoted by Reuters.

The news service also quoted the Department of Petroleum Resources as denying any knowledge of the sale.

The Department of Petroleum Resources, the government department that would approve any transfer of an oil license, said it was not aware of any sale of OML 11.

The spokesperson to the governor, Simeon Nwakaudu, did not answer calls to his telephone on Friday when PREMIUM TIMES called to seek the Rivers state government’s side of the story.

Mr Nwakaudu requested the reporter to send his questions to him. Although the reporter sent the question, no response was received from him at the time of publication of the story. He also did not respond to the text message sent to him.

Backstory

The dispute commenced with a claim at the Federal High Court in 2001 by representatives of the Ejama-Ebubu community of “a major crude oil blow-out and spill involving over two million barrels of oil involving Shell’s oil installations and facilities in Ejamah in Ebubu-Eleme.

The spill, the community alleged, flooded the Ochani stream and permeated the soil of the community to a point of saturation” into the ground.

The community said despite their protest, Shell failed to clear up the spill. They also alleged that the surface and groundwater of their area had been rendered unfit for human consumption.

Apart from seeking about N1.7 billion as special damages, interest on the sum and as well as N10 billion “in Punitive General Damages,” the community also complained of general inconveniences, acid rain, pollution of underground water and hardship to the population.

The community had sought an order of the court to compel Shell to reinstate their land as the oil spill had deprived them the right to self-sustenance, education and good life.

In its counter-claims, Shell denied responsibility for the oil spill, claiming it already made substantial progress in clearing up the effects of the spill.

Proceedings in the suit was delayed till 2007 following a change of the judge and a series of adjournments at the instance of Shell.

Reacting to the latest court ruling in the UK on the matter, Mr Odugbesan said Shell was pleased that the English court rejected the registration of the Nigerian judgment for enforcement in the UK.

“This matter is still the subject of several proceedings in the Nigerian courts, including pending appeals at the Supreme Court of Nigeria. It remains our position that no payment is due.

“It is regrettable that the legal process in this case has focused for so long on procedural issues and not the merits of the case when we have always maintained that we are ready to defend this case based on the available facts,” he said.

SOURCE

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