Court Upholds PIA Framework, Throws Out Host Community Suit against NNPC/MPN JV Trust

Wale Igbintade

The Federal High Court in Uyo has reaffirmed the governance framework established under the Petroleum Industry Act (PIA) 2021, striking out a suit challenging the administration of the NNPC/Mobil Producing Nigeria Unlimited (MPN) Joint Venture Emoimee Host Community Development Trust (HCDT).

In a landmark judgment, Justice C. S. Onah dismissed the suit filed by the Incorporated Trustees of Esit Eket Youth Association against the Trust’s trustee, Seplat Energy Producing Nigeria Unlimited (SEPNU), and four other defendants, holding that the association lacked the legal standing (locus standi) to institute the action.

The plaintiff had sought to be included in the Trust’s decision-making processes and requested access to detailed records of the statutory three per cent settlor’s remittances allocated to host communities in Esit Eket Local Government Area of Akwa Ibom State.

However, the court upheld the preliminary objection filed by SEPNU’s counsel, Dr. Jude T. U. Nnodum Jr. of KENNA LP, who led a legal team comprising Abasiemediong Etuk, MCArb, and Olusegun Akeju.

Justice Onah ruled that the plaintiff was not among the entities recognised under Chapter III of the Petroleum Industry Act to administer or challenge the operations of a Host Community Development Trust and, therefore, lacked the requisite legal standing to maintain the suit.

The court also rejected the plaintiff’s contention that the matter was a public interest action, holding that merely describing a case as one filed in the public interest cannot substitute for a legally enforceable interest, particularly where the reliefs sought are intended solely for the benefit of the claimant.

Justice Onah further held that the suit disclosed no reasonable cause of action against SEPNU, finding no evidence that the company had breached any provision of the Petroleum Industry Act. The suit was consequently struck out for want of jurisdiction.

The judgment is expected to have far-reaching implications for the administration of Host Community Development Trusts across Nigeria’s oil and gas industry.

Legal observers say the ruling provides important judicial clarity on the Petroleum Industry Act by affirming that only entities expressly recognised under the law have the legal capacity to participate in or challenge the governance of HCDTs.

The decision is also expected to provide greater certainty for settlors, trustees and operators, including SEPNU, by reinforcing that the administration of Host Community Development Trusts must strictly comply with the statutory framework established under the Petroleum Industry Act.