Nigerian govt appeals dismissal of multi-million dollar debt recovery suits against Agip Oil, Brasoil

Agip Head office in Lagos
Agip Head office in Lagos

Hours after a federal court in Lagos dismissed the Nigerian government’s multi-million dollar debt recovery suits against Agip Oil and Brasoil, the government has filed a notice of appeal against the judgment.

Mojisola Olatoregun, a judge of the Lagos Division of the Federal High Court on Wednesday dismissed the Nigerian government’s suit against the oil companies citing insufficient evidence from the plaintiff.

The government had sued Agip Oil, owned by Italian oil giant, Eni, in 2016 for allegedly under-declaring the volume of crude oil it shipped out of the country between January 2011 and December 2014.

The government is seeking $55 million as the shortfall in the amount of excess crude oil lifted out of Nigeria, onboard the vessel MT Cosmos.

A similar suit was filed against Brasoil Services Company Nigeria Ltd, owned by the Brazilian oil company, Petrobras.

In a notice of the appeal to the Court of Appeal in Lagos seen by PREMIUM TIMES and dated May 8, the Nigerian government urged the appellate court to set aside the decision of the lower court dismissing its claims against the oil companies.

Case against Agip

The government appealed the federal high court’s decision in favour of Agip Oil on two grounds.

In her judgment on Wednesday, Mrs Olatoregun held that although it was possible that MT Cosmos lifted additional 500,000 barrels of crude oil, the plaintiff did not provide evidence to prove its case.

The appellant argued against the decision, saying that Agip Oil failed to render a proper account of its crude shipment resulting in huge financial losses to the government.

“The court below failed to take into consideration the fact that the defendant had intentionally neglected to properly account for all crude oil leaving the country which as a result caused financial loss as there was an under-declaration of the value of crude oil lifted and exported which led to significant decline in crude oil revenue generated by the plaintiff.”

The government further argued that the lower court failed to take into cognisance the evidence of Agip Oil’s sole witness relating to discrepancies in crude shipment reviewed in the Pre-Shipment Inspection Report.

According to the appellant, the lower court ignored the fact that under Nigerian laws, Agip Oil is required to make full declaration of its crude shipments; the crude oil shipments by the company to Philadelphia, USA, and Amsterdam, the Netherlands, show a cumulative non-declaration of 500,000 barrels of crude oil valued at $55 million.

The appellant also stated that the exhibits tendered by the company during the court hearing showed it also failed to declare the crude oil it shipped in its bill of lading.

Case against Brasoil

There are three grounds of appeal by the Nigerian government against the judgment in favour of Brasoil.

While dismissing the suit against the oil company, the judge held that the vessel, Overseas Rebecca, did not lift the 499,000 barrels of crude oil out of the country as claimed by the Nigerian government and, therefore, has no responsibility to declare it.

The appellant argued that the lower court erroneously relied on exhibits tendered before it to hold that another vessel, MT Nikator, lightered some of its crude oil into Overseas Rebecca. This, it said, was absurd because the Port of Houston, where the ship berthed, was large enough to accommodate the laden MT Nikator.

Lightering is the process of transferring cargo between vessels of different sizes, usually between a barge and a bulker or oil tanker. Lightering is undertaken to reduce a vessel’s draft in order to enter port facilities which cannot accept very large ocean-going vessels.

“The court below failed to take into cognisance that PW1 (the witness) evidence shows that the MT Nikator has a draught that can be accommodated at the Port of Houston and discharged of its cargo without lightering.”

The appellant also argued that the lower court ignored its witness who maintained that any shipment not contained in the PIR creates a discrepancy and the records in the U. S. showed that Overseas Rebecca discharged shipment from Nigeria which was not declared in the PIR.

It further argued that the court did not take into cognisance the fact that the oil company’s crude oil shipments using Overseas Rebecca to the Port of Houston, Texas, show a cumulative non-declaration of 499,000 barrels of crude oil valued at $54.89 million.

According to the Nigerian government, the judge ignored the fact that seven volumes of the comprehensive PIR of crude oil from Nigeria between 2011 and 2014, which contains the master list of all shipments, unequivocally established that the 499,000 barrels of Akpo crude were not declared to the appellant.

The government maintained that it provided evidence through an analysis of crude oil imports into the U.S. obtained from the United States Border Customs that there was, indeed, a shipment to Texas using Overseas Rebecca.

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