Malabu Deal: UK Court Dismisses Nigeria’s Sleaze Suit against Shell, Eni

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By Chika Amanze-Nwachuku with agency report

A court in the United Kingdom yesterday declined to hear the $1.1 billion corruption suit Nigeria brought against Royal Dutch Shell and Italy’s Eni with regard to payment made for the controversial Oil Prospecting License (OPL 245) by the international oil companies.

The Nigerian government had instituted the case in 2018 at a commercial court in London against the oil firms for allegedly paying $1.1 billion in bribes and kickbacks to secure the purchase of OPL 245 (otherwise known as Malabu Oil block) in 2011.

In the charges, government alleged that the Shell and Eni knew that around $1.1 billion used for the acquisition of OPL 245 would be used to bribe top Nigerian politicians, businessmen and middlemen.

But the UK High Court judge, Justice Christopher Butcher, ruled that the court did not have jurisdiction to hear the claims.

The judge in his written decision said the English case had both the same essential facts and parties as a parallel proceeding in Italy filed by Italian prosecutors.

The oil firms had urged the English Court to decline jurisdiction to entertain the lawsuit, contending that a similar suit was brought against them in a Milan Court.

The companies had noted that the suit amounted to duplicating of the ongoing criminal trial and parallel claims in Italy over the same oil block deal.

Shell and Eni, both major players in the upstream sector of the Nigerian oil and gas industry and their executives are currently facing charges of bribery before a Milan court, in what is considered the oil industry’s biggest-ever corruption trial.

Eni Chief Executive Claudio Descalzi and four ex-Shell managers, including its former head of upstream, Malcolm Brinded, are among the officials facing charges of international corruption in the Milan trial.

In the charges before a Milan court, prosecutors alleged that Shell and Eni knew that the $1.1 billion used for the acquisition of OPL 245 would be used for bribery.

Reacting to the UK court ruling, the Nigerian government expressed disappointment that the English court opted not to hear a civil claim against the defendants and insisted that the Milan case and the separate civil proceedings in London have an entirely different legal basis.

“Nigeria continues to support the criminal proceedings underway in Milan and maintains that the separate civil proceedings in London have an entirely different legal basis… we intend to seek permission to appeal this decision,” Reuters quoted an unnamed Nigerian spokesman as saying.

The federal government also vowed it was going ahead with its case in England against JP Morgan, over the bank’s role in the OPL 245 deal.

The bank has said it considers the allegations against it “unsubstantiated and without merit”.

However, a Shell spokeswoman said the oil firm welcomed the UK Court ruling. “We maintain that the 2011 settlement… related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria (FGN), represented by the most senior officials of the relevant ministries,” Reuters quoted the Shell spokeswoman to have said.

The OPL 245 is believed to be one of the biggest untapped oil resources in Nigeria with reserves estimated at nine billion barrels.

A former Minister of Petroleum, Dan Etete, allegedly used his position to allocate the lucrative oil prospecting license to Malabu Oil and Gas, a company he had interest.

The oil block license was revoked in 2001 by the then President Olusegun Obasanjo and awarded to Shell, without a public bid.

Malabu headed to court, and the ownership was reverted to it in 2006 after it reached an out-of-court settlement with the federal government.

Shell, which had commenced arbitration against Nigeria over the oil block, had agreed with Eni and jointly paid Malabu for $1.1 billion to buy the oil block.

It was however revealed that the $1.1billion paid by Shell and Eni was used to bribe top Nigerian politicians, businessmen and middlemen to acquire the OPL 245. The companies agreed the payment was made, but denied those funds went to bribes.