Chineme Okafor in Abuja
The Nigerian National Petroleum Corporation (NNPC) on Tuesday disclosed that it had secured a unanimous judgment from the Supreme Court of the United Kingdom, granting it reprieve from paying $100 million bank guarantee to an oil service company, IPCO Nigeria Limited, in a case filed against it by the firm.
The corporation said in a statement from its Group General Manager, Public Affairs, Mr. Ndu Ughamadu, in Abuja, that the reprieve was the latest in its protracted dispute with IPCO over a contract for the construction of the Bonny Export Terminal (BET) project in Port Harcourt.
The statement noted that IPCO had referred its claims to arbitration in Nigeria and obtained an arbitral award of $154 million in 2004, with annual interest running at 14 per cent, thus leaving NNPC with no option than to promptly challenge the award at the Federal High Court in Lagos.
According to it, IPCO has since 2004, repeatedly sought to enforce the award in England prior to the conclusion of NNPC’s challenge of the arbitral award in Nigeria.
It said during one of IPCO’s attempts to secure an order for the enforcement of the award in the UK in 2008, NNPC discovered evidence that IPCO had forged documents relating to the claims and the related arbitration in Nigeria, and as a result, the parties agreed in 2009 to adjourn the enforcement proceedings in England, in order to await the determination of the fraud allegations in Nigeria.
In 2012, the statement noted that IPCO again applied to the English Commercial Court to enforce the award despite the agreement on the adjournment of the enforcement action, but its application was dismissed on March 14, 2014.
IPCO subsequently appealed the dismissal at the UK Court of Appeal, and in 2015, the UK Court of Appeal decided that the delays in the Nigerian proceedings required the English Court to lift the adjournment and to decide whether to allow enforcement following a trial of the fraud allegations in the English Court.
NNPC stated that both the Commercial Court and, the Court of Appeal concluded that the fraud allegations against IPCO were made bona fide, and that it has a good prima facie case that IPCO practised a fraud on the arbitral tribunal based on which the whole award should be set aside.
It however said the UK Court of Appeal ordered it to provide an additional security of $100 million even though NNPC had previously provided security of $80million, as a condition of being entitled to advance a defence that enforcement should be refused because the award had been procured by IPCO’s fraud.
The corporation said it subsequently appealed to the UK Supreme Court to decide whether the English court, as an enforcing court, is empowered to require security for money payable under the award or any part thereof from a party resisting enforcement of such award as a condition for being entitled to advance a good and arguable defence.
According to it, the UK Supreme Court unanimously set aside the Court of Appeal’s Order on March 1, 2017, thus allowing it to advance its defence in the English Commercial Court free of any such conditions.
The statement explained that NNPC was represented by the UK law firm of Messrs. Stephenson Harwood LLP, and Nigerian law firms of Messrs. Babalakin & Co. and Messrs. Abdullahi Ibrahim & Co in this.
It also noted that its Group Managing Director, Dr Maikanti Baru, was delighted with the new development, and efforts would be made to extricate NNPC from encumbrances that may impede its access to hard earned funds which are much needed to execute developmental projects by the various tiers of government in the country.
The statement further noted that the court has not only discharged NNPC from the responsibility to sustain the additional security of $100million in favour of IPCO but also reiterated the finding of the English Commercial Court and the Court of Appeal that NNPC has a good prima facie case that IPCO procured the arbitral award by fraud.
