OML 18: San Leon Energy, Six Others Dragged Before Court

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By Ejiofor Alike

Suntrust Oil Company Nigeria Limited has summoned San Leon Energy Plc and six other defendants to appear before a Federal High Court in Lagos within 30 days in the suit number FHC/L/CS/793/2018 in respect of Oil Mining Lease (OML) 18.

The six other defendants in the suit are Midwestern Leon Petroleum Limited, Martwestern Energy Limited, Midwestern Oil and Gas Company Limited, Mart Resources Inc; Minister of Petroleum Resources and the Corporate Affairs Commission (CAC).

According to the concurrent writ of summons filed by a Senior Advocate of Nigeria (SAN), Fidelis Oditah, Suntrust Oil Company asked the defendants: “you are hereby commanded that within 30 days after service of this writ on you, inclusive of the day of such service, you do cause an appearance to be entered for you in an action at the suit of the above-named plaintiff and take notice that in default of your so doing, the plaintiff may proceed with the claim and judgment may be given in your absence.”

In the statements of claim before the court, Suntrust Oil Company alleged that in order to acquire an indirect economic interest in OML 18, San Leon Energy Plc began acquiring direct and indirect interests in Martwestern Energy’s shareholding from March 2016, contrary to the November 2013 shareholders’ agreement between the plaintiff, Martwestern Energy, Midwestern Oil, and Mart Resources Inc.

“To achieve its aim, San Leon Energy and Midwestern Oil and Gas formed Midwestern Leon Petroleum Limited as a special purpose vehicle to acquire and restore the entire shareholding in the Martwestern Energy outside the framework of the shareholders’ agreement,” Suntrust Oil alleged.

The plaintiff also told the court that Midwestern Oil and Mart Resources Inc. transferred all their shareholdings, four million shares each, to Martwestern Energy to Midwestern Leon Energy (Sale Shares), adding that Midwestern Leon did not execute the Deed of Accession as required by Clause 13 of the shareholders’ agreement.

Suntrust Oil further alleged that none of the sale shares was offered to it whether pursuant to Clause 11 of the shareholders agreement or otherwise, adding also that at no point did it waive its right of first refusal.

In its claim, the plaintiff is seeking 18 reliefs, including “a declaration that by virtue of Clause 11.1 of the shareholders agreement dated November 2013 between the plaintiff and the third, fourth and fifth defendants, no shareholder has the right to sell or transfer or otherwise dispose of all or any part of its shareholding in the third defendant unless and until the shareholder first gives the other shareholders a right of first refusal to buy such shares evidenced by a transfer notice stating the selling shareholder’s intention to sell such shares and setting forth the full terms including the price at which it intends to sell the specific shares.”

Suntrust Oil is also seeking “a declaration that pursuant to Clause 21 of the said shareholders’ agreement, there can be no waiver of a shareholder’s right of first refusal unless such waiver is evidenced in writing and signed by the waiving party.”

The plaintiff is also asking the court to issue “a declaration that pursuant to Clause 13 of the said shareholders’ agreement, no additional shareholder can be admitted as a shareholder of the third defendant unless all the existing shareholders provide unanimous consent and such additional shareholder executes a Deed of Accession substantially in the terms set out in Schedule 2 of the said shareholders’ agreement.”

It also prayed the court to declare that “the purported transfer of 357,143 shares by the plaintiff to the second defendant on or about April 11, 2016 violated Clause 11 and 13 of the shareholders’ agreement and is consequently null and void.”

Suntrust Oil also wants the court to void the “purported transfer of 1,642,857 shares by the plaintiff to the second defendant on or about September 2016,” as it “violated Clause 11 and 13 of the said shareholders’ agreement.”

Also among other reliefs, Suntrust Oil is also seeking “a declaration that the purported transfer of four million shares in the third defendant by the fifth defendant to the second defendant on or about May 30, 2016 violated Clause 11 and 13 of the shareholders’ agreement and is consequently null and void.”