Davidson Iriekpen examines why the federal government is dissatisfied with the dismissal of the two suits it filed against two multinational oil companies at the Federal High Court for under-declaring the volume of crude oil shipped abroad
The federal government has given reasons why it is determined to seek justice against two International Oil Companies (IOCs) – Nigerian Agip Oil Company Limited (NGOC) and Brasoil Services Company Nigeria, it alleged under-declared the volume of crude oil shipped abroad.
In two notices of appeal it filed at the Court of Appeal, it said the judgments were against the weight of evidence before the court.
Justice Mojisola Olatoregun of the Federal High Court in Lagos had last Wednesday dismissed the two suits on the grounds that the government did not back its allegations against the oil companies with sufficient evidence.
The case commenced when the government, through its counsel, Prof Fabian Ajogwu, filed separate suits against Agip and Brasoil, among others, at the Federal High Court in Lagos, claiming that the oil companies had failed to fully declare crude oil shipments from Nigeria to the United States of America amounting to $55,000,000 and $54,890,000 respectively during the period of 2011 to 2013.
The suits were predicated on the forensic analysis linking the decline in crude oil export and government revenue to the alleged under-declaration of volume of crude oil shipped out of the country by the oil companies. It prayed the court to compel the oil firm to pay the $55million with an annual interest of 21 per cent, as well as $55million as exemplary damages.
During trial, the plaintiff called one witness and tendered three exhibits, while the defendant also called one witness and tendered 12 exhibits.
Three US-based experts – a US citizen and Lead Analyst at Loumos Group LLC, a technology and oil and gas auditing firm based in the US, Prof. David Olowokere; a counsel in the law firm of Henchy & Hackenberg, Jerome Stanley, and founder and Chief Executive Officer, Trade Data Services Company, State of Arizona, US, Michael Kanko deposed to supporting affidavits to the suit.
According to them, millions of barrels of crude oil were allegedly exported by the defendants and sold to buyers in the US but the companies did not make due remittance to the federal government contrary to the terms of agreement.
Agip and Brasoil denied the allegations and urged the court to dismiss the suit.
But in her verdict, Justice Olatoregun, surprisingly held that the plaintiff failed to provide sufficient evidence to substantiate the claims. She held that there was no evidence that the crude oil the defendant lifted was more than what was declared.
According to the judge, it was trite and settled law that he who asserts must prove. She held that the exhibits before her did not convincingly show a shortfall in the shipment of 949,096 barrels of crude oil lifted by a vessel, MT Cosmos. She added that the plaintiff failed to prove its case by supplying the requisite evidence, adding that the main purpose of final address is to assist the court.
“While I do not have any evidence to suggest that it is impossible for the defendant to carry undeclared crude oil from Nigeria, I have no evidence to show that MT Cosmos carried the excess 500,000 barrels of crude oil with same bill of lading,” she held.
“It is trite law that whoever asserts must prove that the facts exist. No amount of brilliant address can make up for a lack of evidence. The plaintiff failed to make out a case that 500,000 barrels of crude oil was offloaded in Pennsylvania. The case of the plaintiff fails on the lack of proof on the preponderance of evidence.
“At this stage, I do not find it necessary to proceed with the evaluation of the other reliefs. I, therefore, proceed to make an order dismissing this suit; it is hereby dismissed,” the court held.
The court also dismissed a similar suit against Brasoil, seeking to recover $4.8million in alleged missing oil revenue.
But the government faulted the judgments, saying lower court erred in law when it failed to consider all relevant facts put before it and that the court erred in law when it held that the respondent had performed all its obligations in relation to the under declaration of crude oil revenue to be remitted to it.
In the appeal against Agip, the appellant wondered how the lower court arrived at the decision when it (the court) had agreed that it was possible the vessel, Cosmic, in addition to the non-contested shipment, lifted the contested-500,000 barrels of crude oil. It also said the court failed to take into consideration the fact that the defendant omitted to render proper account for crude shipment exported at its behest which resulted in huge financial losses to it.
The government averred that the lower court failed to take into consideration the fact that the defendant had intentionally neglected to properly account for all crude oil leaving the country which as a result caused financial loss as there was an under-declaration of the value of crude oil lifted and exported which led to significant decline in crude oil revenue generated by it.
It further stated that the court failed to take into cognisance, the evidence of its sole witness relating to discrepancies in crude shipment reviewed in the Pre-Shipment Inspection Report (PIR) as contained in the records obtained from the United States and the court did not take into cognisance the fact that the defendant, under the extant laws of the Federal Republic of Nigeria, is required to make full declaration of the details (quantity, quality, mode, buyer, port of destination, and vessel) of its crude oil shipments/exploration, including accounting records of such prior to exporting same.
It also accused the lower court of not taking into cognisance the fact that the crude oil shipments by the defendant to Philadelphia Energy Solutions of 1735 Market Street, Philadelphia, PA, USA and ENI Trading & Shipping B.V. of Strawinskylaan 1641- Tower C/16 1077 XX Amsterdam, the Netherlands show a cumulative non-declaration of a total of 500,000 barrels of crude oil in the total value of USD55,000,000 as revenues/debts due to the appellant from the undeclared sale of its crude oil.
The government was of the opinion that in line with established principles of law, there must be a crucial appraisal and evaluation of all evidence brought before the court.
In the notice of appeal against Brasoil Services Company Nigeria, the government stated that the lower court erred in law when it dismissed and held, “I am satisfied that the Oversea Rebecca did not lift the 499,000 barrels of crude oil from Nigeria and therefore has no responsibility to declare it,” and yet held that it did not proved its case against the respondent.
It added that the court erroneously relied on Exhibit D-D6 to hold that the MT Nikator lightered some of its crude into the Oversea Rebecca and failed to take into cognisance the consistent evidence of PW1 that the defence of lightering was absurd as the Port of Houston was more than large enough to accommodate the laden MT Nikator.
It also averred that the court failed to take into cognisance that PW1 evidence showed that the MT Nikator has a draft/draught that can be accommodated at the Port of Houston and discharged of its cargo without lightering.
It contended that the court failed to take into consideration the fact that the respondent had intentionally neglected to properly account for all crude oil leaving the country which as a result, caused financial loss to the federal government as there was an under-declaration of the value of crude oil lifted and exported which led to significant decline in crude oil revenue generated by it.
It also stated that the court did not take into cognisance the evidence of the its witness (PW2) wherein he maintained that any shipment which is not contained in the PIR creates a discrepancy and the records in the United States showed that vessel by the name “Overseas Rebecca” discharged shipment from Nigeria which was not declared in the PIR.
It further that the lower court failed to take cognisance of the fact that the respondent admits that the volume of the missing crude is about 499,000 barrels and that there is a consensus between it and the respondent that the ‘Overseas Rebecca’ was carrying and indeed, discharged Nigeria Akno crude at the port Houston which is clear from Paragraph 15 of the respondent’s amended statement of defence and as shown in Line 82 of Exhibit B tendered by it.
The government contended that in holding that the appellant has not adduced sufficient evidence to prove its case failed to consider the fact that the respondent has not in its amended statement of defence controverted, denied or impugned the validity the evidence of the appellant as contained in Exhibits A — A6 and Exhibit B, adding that the respondent during cross-examination of PW2, validated the correctness and validity of Exhibit B, but lamely tried to show that the crude on-board the Overseas Rebecca was not received in Nigeria, not that it was not Nigerian crude.
Arguing that it is trite law that an uncontroverted evidence of a party is deemed established in a case, the appellant cited the case of the Nigerian Army Council & Anor V. Erhabor (2018) LPELR-44958 where it was held that, “It is an established principle of law that, a court is entitled to accept and/or act upon unchallenged and uncontroverted evidence. The evidence adduced by the respondent, having not been controverted is deemed established.”
Many observers are waiting to see how the Court of Appeal will handle the appeal which borders more on national interest.