A federal court in Lagos Tuesday turned down an application to vacate an interim injunction it granted last month directing 20 Nigerian banks to block the accounts of Shell Petroleum Development Company of Nigeria (SPDC) and its subsidiaries.
Judge Oluremi Oguntoyinbo, in her ruling, also summoned three of the banks’ secretaries and chief financial officers for allegedly disobeying the order made on February 17.
The affected banks and their officials include Citi Bank Ltd, its Company Secretary Sola Fagbure and Chief Financial Officer, Sharaf Mohammed; First Bank of Nigeria Ltd, its Company Secretary Irene Netimah and Chief Financial Officer, Patrick Iyamabo; and United Bank For Africa (UBA) Plc, its Company Secretary Bill Andrew Odum and Chief Financial Officer, Ebenezer Kolawole.
The judge ordered them to appear before it on the next adjourned date, on March 29, adding that she would issue a warrant for their arrest if they fail to appear.
Aiteo Eastern E&P Company had filed a suit before the court accusing SPDC and its subsidiaries of illegally diverting 16 million barrels of crude oil. The company put the value of the diverted products to about $3 billion.
Joined with SPDC as respondents in the suit are Royal Dutch Shell Plc; Shell Western Supply and Trading Ltd; Shell International Trading and Shipping Company Ltd; and Shell Nigeria Exploration and Production Company Ltd.
Aiteo, an indigenous oil firm, acquired SPDC’s OML 29 after the latter’s divestment of its 45 per cent stake in 2015. OML 29 includes the 97-kilometre Nembe Creek Trunk Line (NCTL) with a capacity to lift about 180,000 barrels of crude per day from oilfields in Rivers and Bayelsa to the Bonny terminal.
The indigenous oil firm claims there are problems with the trunk line and that Shell undercounted its oil exports.
SPDC had, however, described the claims as “factually incorrect,” saying there was a directive from the Department of Petroleum Resources to implement a crude re-allocation programme between injectors into the multinational’s joint venture Trans Niger Pipeline and injectors into the NCTL.
Last month, Justice Oguntoyinbo granted a Mareva injunction directing 20 commercial banks to block SPDC and its subsidiaries’ accounts and barring Royal Dutch Shell’s Nigerian subsidiaries from withdrawing money from the banks.
She ordered the banks to “ring-fence any cash, bonds, deposits, all forms of negotiable instruments to the value of $2.7 billion and pay all standing credits to the Shell companies up to the value into an interest yielding account in the name of the Chief Registrar of the court.”
A Mareva injunction is a court order freezing a party’s assets, until the determination of a case they are involved in, to stop them from taking such abroad.
Meanwhile, as of the time of the court’s proceedings on Tuesday morning, 17 of the banks had complied with the order.
Later on Tuesday, First Bank filed an affidavit of compliance to the court.
At the last hearing on March 2, the court faced three applications by the plaintiff, AITEO and the defendants, SPDC and others relating to its jurisdiction, motion to discharge its ex-parte order, and committal proceedings against the three banks.
AITEO’s counsel, Kemi Pinheiro, prayed the court to hear the committal proceedings first.
Mr Pinheiro, a Senior Advocate of Nigeria, said it was “necessary that the named persons in committal proceedings (the bank officials) be present in court because the proceedings “attached to their person”.
He said alleged contemnors had been served “and there’s proof of service,” adding that the quasi-criminal nature of committal proceedings made their appearance a necessity. He noted that they had not filed a response.
Adewale Atake, counsel for SPDC, Olawale Akoni, for the banks, and Chukwuka Ikwuazom, for the four Shell subsidiaries, opposed Mr Pinheiro, praying the court to instead hear applications questioning its jurisdiction and another motion to discharge the order blocking the accounts.
On Tuesday, the judge upheld Mr Pinheiro’s application and gave primacy to the application for committal proceedings.
“The committal proceedings is the appropriate application to consider…I, therefore, hold that the first application to be heard is the committal proceedings,” she said.
The judge further ruled that the presence of the named bank officials was necessary.
“The alleged contemnors must be present in court at the next hearing, otherwise a warrant of arrest shall be issued against them.”
Ruling on the defendants’ application to vacate the Mareva injunction and unfreeze the bank accounts, the judge held that the ex parte order subsists pending the determination of AITEO’s motion on notice.
She then adjourned till March 29 for the hearing of the committal proceedings and the other applications.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To advertise here . Call Willie +2347088095401...