Suntrust Oil Asks Court to Restrain San Leon Energy, Six Others from Parading Selves as Shareholders

Ejiofor Alike

Suntrust Oil Company Nigeria Limited has asked a Federal High Court in Lagos to issue a restraining order against San Leon Energy Plc and six other respondents in respect of the ownership of the third respondent, Martwestern Energy Limited.

Apart from San Leon Energy, which is the first respondent, the six other defendants in the suit number FHC/L/CS/793/2018 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).

In the motion on notice dated May 22, 2018 and issued on behalf of Suntrust Oil by a Senior Advocate of Nigeria (SAN), Fidelis Oditah, the plaintiff is seeking among other reliefs “an order of interlocutory injunction restraining the second respondent, Midwestern Leon, from parading itself as a shareholder of the third respondent, Martwestern Leon, or exercising any shareholder right until the hearing and final determination of these proceedings.”

Suntrust Oil also wants “an order of interlocutory injunction restraining the third respondent from paying to the third defendant and/or the first defendant, San Leon Energy, any dividends/distributions or transfers of money howsoever described, including without limitation, any purported repayment of capital or payment of interest in respect of any purported debt instrument to the first and/or second respondent and/or their agents, nominees and/or privies until the final hearing and final determination of these proceedings.”

In the statements of claim before the court, Suntrust Oil alleged that in order to acquire an indirect economic interest in Oil Mining Lease (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.”