Chevron divestment suit: A’ Court to hear jurisdiction appeal Nov 22

Hearing of the appeal on whether or not the Federal High Court can assume jurisdiction over a matter instituted by Britannia-U Nigeria Limited seeking the Court to restrain Chevron Nigerian Limited from divesting its interests in Oil Mining Leases (OML) 52, 53 and 55 to Seplat Petroleum Development Company Limited has been fixed by the Court of Appeal, Lagos Division.

The Appellate Court, on Monday, fixed November 22, 2016 for hearing of the substantive appeal – CA/L/557/2014 – upon its refusal to entertain the Appellants’ Motion for Stay of Proceedings. The Court of Appeal held that the Motion will abide the outcome of the Main Appeal.

The Court however granted the Appellants’ (Chevron Nigeria Limited and BNP Paribas Securities Corp.) (i) Motion for Extension of Time to compile and transmit Additional Records of Appeal and Motion for Leave to appeal on grounds other than grounds of Law and Leave to amend their Notice of Appeal. The Appellants were given seven days to file their Amended Notice of Appeal.

In view of the restorative Orders granted by the Court, counsel representing Brittania-U Nigeria Limited withdrew the Application seeking to dismiss the Appeal for want of diligent prosecution. The Application was struck out. Parties are expected to file their Respective Briefs of Arguments within the time prescribed by the Rules of the Court of Appeal to ensure that the appeal will be heard on 22nd November 2016.

Britannia-U Nigeria Limited had through its lawyers: Mr. Ricky Tarfa (SAN) and Abiodun Owonikoko Esq., SAN sued Chevron Nigeria Limited in 2013 along with four (4) other Defendants – Chevron USA Inc, BNP Paribas Securities Corp., Mr. Hermant Petel and Seplat Petroleum Development Company Limited – at the Federal High Court seeking to restrain them from awarding the interests in OMLs 52, 53 and 55 to Seplat Petroleum Development Company Limited.

Justice Yunusa Mohammed of the Federal High Court, Ikoyi Lagos had adjourned the suit sine die (till further notice) following the avalanche of appeals filed by the Defendants.

One of the appeals was decided by the Supreme Court on 29th January 2016 wherein the Court agreed with Seplat Petroleum Development Company Limited that the Federal High Court erred in extending the lifespan of the ex-parte order of injunction granted upon an ex-parte application by Brittania-U Nigeria Limited

However, Brittania-U Nigeria Limited’s Motion on Notice for Interlocutory Injunction against the Defendants is still pending at the Federal High Court; and till date, none of the Defendants has filed a Defence to the substantive action at the Federal High Court.

The Plaintiff (Britannia-U Nigeria Limited) had approached the court seeking for a declaration that by the final biding offer of $1,015,000,000.00 for acquisition of 40 percent participating interest of Chevron Nigeria in oil mining leases 52, 53 and 56 has been accepted by the first defendant.

In its statement of claim, the plaintiff stated that the second defendant, (Chevron USA)  requested Britannia-U to provide firm Board commitment letter issued by the plaintiff’s bankers for payment of the balance of $765million which was complied with.

The plaintiff added that its bankers directly paid the money to the second defendant (Chevron Corp) at their Houston office on November 15, 2013 arguing that, with that it followed that the parties have entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff.

The plaintiff pray the court to hold that its revised bid of One Billion and Fifteen Million US dollars (US$1, 015, 000, 000.00), for acquisition of the 40% participating interest of Chevron Nigeria Limited in Oil Mining Leases 52, 53 and 56 is binding and subsisting.

The plaintiff added that by provision of the Irrevocable Standby Letter of Credit for the sum of $250 million representing 15% of company’s initial bid price of $1.667billion, opened in favour of the first/second defendants on September 30, 2013 remain in force.

The plaintiff maintained that by the said irrevocable Letter of Credit which formed part of the conditions laid down by first/second defendants and  for a binding bid, the SBLC is still being held by the first/second defendants Chevron Nigeria/(Chevron Corporation) till this moment.

Specifically, the plaintiff sought for an order declaring that the 1st-4th defendants have no right to proceed to invite bids, offer or accept, negotiate, purport or so represent or engage in any transaction or contract to transfer, sell, farm out or otherwise deal in, dispose of charge encumber, or divest the 40% participating interest of Chevron Nigeria Limited in Oil Mining Leases 52, 53 and 55 in Nigeria in favour of any other person entity or whomsoever or in derogation from or in disregard of the agreement entered into between the plaintiff and the first defendant.

An order granting a decree of specific performance directing the first and second defendants to provide the sale and purchase agreement for execution by the plaintiff to evidence its acquisition of 40% participating interest of the first defendant in OMLs 52, 53 and 55 in Nigeria stipulated in the Irrevocable Standby Letter of Credit and the Bid Process Document pursuant to which the parties conducted the sale.

An order in the alternative to the relief above granting special damages against the first and second defendants in the sum of $10Billion (Ten Billion, Nine Hundred and Thirty Five Million, One Hundred US dollars) or so much thereof as the court may adjudge fair and equitable  as the enterprise value lost by the plaintiff on account for failure or breach of the contract of acquisition of the 40% participating interest of the first defendant in OMLs 52,, 53 and 55 in Nigeria stipulated in the Irrevocable Standby Letter of Credit and the Bid Process Document pursuant to which the parties conducted the sale.

Exemplary damages in the sum of one billion United States dollars (or its naira equivalent) for the wrongful interference by the second to fifth defendants acting in active connivance or collusion with first defendant to unjustly prejudice and frustrate the contractual relationship between the plaintiff and the first defendant by making illegitimate and unauthorized use of sensitive business and proprietary information disclosed by the plaintiff in support of its bid to acquire the first defendant’s OMLs 52, 53 and 55 and which information were known by the second to fifth defendants to have been so disclosed in strict confidence and solely for the purpose of supporting the plaintiff’s bid but which were divulged to third party leading to huge business losses and reputational damage to the plaintiff.

An order of perpetual injunction restraining the defendants, their servants, agents, privies, proxies, fronts, staffers hirelings howsoever called from proceeding to invite bids, offering or accepting, negotiating or engage in any transaction or contract calculated or purporting to transfer, sell, farm out, or otherwise charge, encumber deal in, dispose of or divest the 40% participating interest of Chevron Nigeria Limited in Oil Mining Leases 52, 53 and 55 in Nigeria in favor of any person, entity or whomsoever at all in derogation from or in disregard of the agreement entered into between the plaintiff and the first defendant on 14th and 15th November, 2013 whereby the parties entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the first defendant in the sum of one billion and fifteen million United States dollars.