Nigeria Suffers Setback as Shell, Eni Escape $1BN UK Bribery Suit in England

UPDATED: MALABU

Nigeria suffered a setback in its pursuit of justice over the controversial Malabu deal as a London judge ruled Friday that the $1 billion suit against oil giants Shell and Eni could not go ahead in England.

According to Law360.com, High Court Judge Christopher Butcher said the courts do not have jurisdiction to hear the claim.

In his written decision, the judge said the English case has both the same essential facts and parties as a parallel proceeding in Italy also brought by the Nigerian government over the Malabu deal.

PREMIUM TIMES earlier reported how both oil giants argued to stop or stay proceedings in the $1 billion lawsuit brought by the Federal Republic of Nigeria (FRN).

Virtual hearings in the case took place last month, during which the companies argued to halt the $1 billion English suit as duplicating the ongoing criminal trial and parallel civil claim being brought by Nigeria in Italy over the controversial OPL 245.

The defendants – Eni, Shell and others — asked for the court to decline jurisdiction under article 29 of the recast Brussels Regulation, as the Italian case against the companies is still ongoing.

In March, PREMIUM TIMES reported how the Nigerian government lost out in its bid to postpone the massive claim against the oil giants, Eni and Shell, in a London court. Mark Pelling, a judge at the London court, ruled that it should not wait for a connected Italian ruling.

Nigeria wanted the April court date postponed until January 2021, when a connected criminal case in Milan is expected to have concluded.

The oil companies and former and current executives face corruption charges linked to the Malabu scandal, a 2011 deal involving a Nigerian oil block known as OPL 245.

Officials affected in the scandal have denied wrongdoing.

A three-day hearing was held over the case in April.

Hearing

On the first day of the hearing in April, Richard Handyside, acting for Eni, outlined the similarities between the Italian criminal charges and civil claim based on international bribery charges and the English claim based on allegations of bribery, dishonest assistance and conspiracy.

Eni’s lawyer noted that the companies have made no profit on the deal as “the FRN has declined to grant a mining license” without which no oil can be produced and no profits made. He argued further that the FRN has brought two duplicative claims in Italy and England within months of each other and that the FRN acknowledged that they might have to choose between them down the road. They were hoping to have a “one way bet,” according to Eni.

Eni argued that Nigeria is wrong to say the Italian claim is different because the Public Prosecutor of Milan (PPM) is involved, adding that the PPM is not involved in civil claim in Italy and the FRN is the sole plaintiff for harms suffered as an injured person. The FRN’s point that the Milanese prosecutor could chose to end the case in Italy whenever they want, without the FRN having a say in that scenario, is not relevant, the lawyer added.

After a short break, Eni’s lawyer resumed to argue that while the FRN is asking the court to rescind the 2011 deal for the license, neither the company nor Shell were parties to the contract because their subsidiaries were. The oil giant argued further that President Muhammadu Buhari has ruled against issuance of licence.

Speaking on behalf of Shell on the second day of the trial, Peter Goldsmith argued that the FRN failed to bring the contents of two 2012 reports by the Economic and Financial Crime Commission (EFCC) to the attention of the judge who oversaw their application.

Mr Goldsmith explained that Nigeria has not presented evidence of what it knew about the EFCC 2012 reports. Shell is alleging that the FRN failed to give Justice Cockerill full and frank disclosure when she was asked to give them permission to serve out of jurisdiction. Shell argued that the FRN should have fairly presented the potential defence and evidence that the FRN did know about wrongdoing earlier.

The lawyer, on behalf of Shell, claimed that the FRN seriously misled Justice Cockerill by saying that evidence of alleged wrongdoing in the OPL 245 did not become apparent until it came out of the Italian investigation. According to him, it took many weeks of chasing for the FRN to disclose the EFCC reports with little explanation of why the FRN failed to inquire into the existence of these reports earlier, adding that responses to Shell’s letters on the EFCC report were “evasive”.

FRN’s lawyer, Roger Masefield, responding to the allegation by Shell that they did not make full and frank disclosure, argued that Shell’s serious allegation is in danger of “Island hopping”, skipping over the FRN’s submission without context.

Mr Masefield explained that the court was told that in 2012 the EFCC was investigating, was told about the House of Representatives investigation, but the alleged wrongdoers were in control of the FRN at the time, so time should not run on limitation at that time. The EFCC discovery in 2012 is irrelevant because the wrongdoers were in control of the Nigerian government in 2015, he said. He explained further that the FRN also did not have enough credible evidence to plead the claim of fraud at that time.

On the third and final day of hearing, Mr Masefield resumed addressing the defendants’ argument that the FRN didn’t make a fair presentation to the court in the hearing with notice before Justice Cockerill, adding that the evidence from the Italian investigation was very different to the EFCC 2012 probe.

The lawyer said that it would be unfair to read one line from the FRN’s solicitor’s witness statement out of context, instead he did flag to the court a few lines earlier that the EFCC had begun investigations. He then said it was in the Italian investigation that “the scheme” emerged.

Mr Masefield explained that the FRN’s solicitor, Mr Cary, did set out the evidence emerging from the Italian investigation into the OPL 245 deal with FBI interviews with participants in the deal, money flows, wiretaps, evidence of a kickback scheme etc. The lawyer said that Mr Cary explained that it was only with this new “credible evidence” that the scheme was revealed involving alleged bribes to then current Nigerian public officials including Messrs Jonathan and Adoke, ex-petroleum minister Diezani Alison-Madueke and a retired general, Aliyu Gusau.

The lawyer said that there was certainly no material misrepresentation, that they did raise the time limitation defence about when the FRN had reason to know about the alleged fraud and wrongdoers in control point which would have to be decided at trial.

Mr Masefield argued further that the money flows to Aliyu Abubakar and cash could not prove that bribes were going to Goodluck Jonathan, at most it could have been understood that Dan Etete, a convicted money launderer, was trying to launder money from the deal. He explained that the 2012 investigation was not into Shell and Eni or what they may have known about bribes, so there was no way the FRN could have argued a case against them at that time.

According to him, the EFCC’s knowledge in 2012 would not have been sufficient to argue there was this case of fraud, adding that the FRN legal team strongly disputes any allegation that they deliberately withheld the 2012 EFCC reports.

Scandal

The controversial Malabu deal was struck in 2011 under former President Goodluck Jonathan. The arrangement saw the Nigerian government stand as a negotiator in the controversial sale of the oil block in offshore Nigerian waters.

Two international oil firms, Shell and Eni, paid out about $1.1 billion to Nigerian government accounts in the UK which then transferred most of the money to Malabu, a company then controlled by Nigeria’s former petroleum minister, Dan Etete.

It was Mr Etete’s Malabu that transferred the over $500 million to accounts controlled by Abubakar Aiyu, who is also being prosecuted in Nigeria for his role in the scandal.

The payout immediately became a subject of cross-border investigation spanning over six countries. Several Nigerian government officials were believed to have received several millions of dollars in bribes for the enabling roles they played.

A larger trial including Shell, Eni and 13 other defendants is ongoing in Italy.

The London claim centers on the licensing rights for OPL 245 block, for which the oil majors purchased extraction rights in 2011. It is alleged that most of the $1.1 billion was used for bribes and kickbacks to government officials.

Nigerian officials involved in the alleged “scheme” have all denied wrongdoing.

CURLED FROM PREMIUM TIMES