Court Fixes March 2 for Ruling on Two Applications against Shell, Four Others

By Davidson Iriekpen: FEB 25, 2021

Justice Oluremi Oguntoyinbo of the Federal High Court in Lagos yesterday fixed March 2 for ruling on whether to entertain the motion challenging the jurisdiction of the court or the contempt proceedings in a suit Aiteo Eastern E & P Company Limited filed against Shell Petroleum Development Company Limited and four others.

The judge fixed the date after listening to arguments from counsel in the suit.

The court had issued an injunction barring Shell from withdrawing money in 20 local banks until it ring-fences potential damages in a lawsuit brought against the oil major by Aiteo Eastern E&P.

The plaintiff’s counsel, Mr. Kemi Peinhero (SAN) who led Mr. Oladapo Olanipekun (SAN) and Mr. Emeka Ozoani (SAN), told court that they have a motion for interlocutory injunction and committal proceedings application scheduled to be heard yesterday.

He notified the court that five of the banks had complied with the directive of the court while the three others: FCMB, Wema Bank PLC and Zenith Bank Plc have no relationship with the defendant. He asked the court to discharge the banks.

Counsel to Shell, Mr. A. Atake informed the court that he represents the first and fifth defendants in the suit, and have two applications pending before the court.

He said one application is seeking to stay proceedings and the other challenging the jurisdiction of the court and as well as discharge exparte mareva injunction.

Atake said the fifth defendant also has a motion seeking an extension of time to file response to the plaintiff motion.

Mr. Olawale Akoni, who represented all the banks in the suit, told court that he has two applications.

He added that one is motion on notice dated February 1, 2021, while the second application is the one challenging contempt proceedings dated February 21, 2021.

Peinhero argued that Atake’s motion seeking extension of time to file response to the plaintiff’s motion, as well as challenging jurisdiction at the same time cannot be taken.

He said the defendant (Shell) cannot aprobate and reprobate at the same time.

The senior lawyer argued that he cannot be challenging the jurisdiction and at the same time, asking same court to give him time for regularisation, extension of time to file a response.

Akoni, however, pointed out that application on contempt proceedings cannot be heard, noting that until the issue of legality is settled, the court cannot hear the contempt.

“I submit that where a defendant is challenging the validity of the court, the court cannot until the issue of legality is settled. This is the position of the law in Group Dannon v. Foltis 2008 7NWLR part 1087 at page 367.

The validity in this case is fundamental. The issue of contempt does not arise.”

Peinhero in his response told court that banks are not parties to the application.

He said the contempt proceedings is between the plaintiff and the defendants.

Peinhero submitted that Atake’s argument is premature, and urged the court to give priority to committal proceedings.

Atake had earlier argued that its client was affected by the order.

He said the rules allow the ex-parte order to be discharge within 14 days that court should invoke order 26

Justice Oguntoyinbo therefore adjourned ruling to March 22, 2021.

In the substantive suit, Aiteo is seeking about $4 billion in total over alleged problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought from the Anglo-Dutch group in 2015 and over claims Shell undercounted its oil exports.

Aiteo is seeking compensation over what it said was the poor condition of the pipeline and associated lost oil sales.

Aiteo also accused Shell of deliberate improper metering of the Nigerian company’s oil exports from the Bonny Light terminal.

It is seeking $2.7 billion over the pipeline deal plus $1.28 billion for lost oil sales.

The Shell Petroleum Development Company (SPDC) said the allegations are factually incorrect.

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