Court Declines to Unfreeze Shell’s Bank Accounts

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By Davidson Iriekpen

A Federal High Court in Lagos yesterday declined to vacate its interim Mareva injunction directing 20 banks to block Shell Petroleum Development Company of Nigeria (SPDC) and its subsidiaries’ bank accounts.

Justice Oluremi Oguntoyinbo, who made the ruling, also summoned three of the banks’ secretaries and chief financial officers for allegedly disobeying the order made on January 25, 2021.

The affected banks and their officials are: Citi Bank Ltd, its Company Secretary Sola Fagbure and Chief Financial Officer, Sharaf Mohammed; First Bank of Nigeria Ltd, its Company Secretary Irene Netimah and Chief Financial Officer, Patrick Iyamabo; United Bank For Africa (UBA) Plc, its Company Secretary Bill Andrew Odum and Chief Financial Officer, Ebenezer Kolawole.

The court ordered the alleged contemnors to appear before it on the next adjourned date of March 29, 2021.

Justice Oguntoyinbo warned that their failure to appear would result in a warrant of arrest being issued against them.

The judge made the order in a ruling on three applications in a suit marked FHC/L/CS/52/2021, filed by Aiteo Eastern E&P Company Ltd against SPDC and four others.

Aiteo is claiming about $2.7 billion against SPDC over alleged problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought from the Anglo-Dutch group in 2015 and over claims that Shell undercounted its oil exports.

Joined with SPDC as respondents in the suit are Royal Dutch Shell Plc; Shell Western Supply and Trading Ltd; Shell International Trading and Shipping Company Ltd; and Shell Nigeria Exploration and Production Company Ltd.

Justice Oguntoyinbo granted the Mareva injunction on January 25, 2021 directing 20 commercial banks to block SPDC and its subsidiaries’ accounts and barring Royal Dutch Shell’s Nigerian subsidiaries from withdrawing money at 20 banks until it “ringfences” potential damages in a lawsuit brought against the firm by Aiteo.

Seventeen of the banks are said to have complied with the order.

The order was sequel to AITEO’s bid to recover from Shell, the cash equivalent of more than 16 million barrels of crude oil allegedly diverted by the oil giant.

At the last hearing on March 9, the court faced three applications by the Plaintiff AITEO and the Defendants SPDC and Others relating to its jurisdiction, motion to discharge its ex-parte order and committal proceedings against the three banks.

AITEO’s counsel Mr. Kemi Pinheiro (SAN), leading Emeka Ozoani (SAN) prayed the court to hear the committal proceedings first.

Pinheiro reasoned that it was “necessary that the named persons in committal proceedings (the bank officials) be present in court” because the proceedings “attached to their person”.

He said alleged contemnors had been served “and there’s proof of service,” adding that the quasi-criminal nature of committal proceedings made their appearance a necessity. He noted that they had not filed a response.

Adewale Atake (SAN) for SPDC, Olawale Akoni (SAN) for the banks and Chukwuka Ikwuazom (SAN), for four Shell subsidiaries opposed them, praying the court to instead hear applications questioning its jurisdiction and another motion to discharge the order blocking the accounts.

When the case was called yesterday, the judge upheld Pinheiro’s application and gave primacy to the application for committal proceedings.

“The committal proceedings is the appropriate application to consider…I, therefore, hold that the first application to be heard is the committal proceedings,” she said.

The judge further ruled that the presence of the named bank officials was necessary.

She said: “The alleged contemnors must be present in court at the next hearing, otherwise a warrant of arrest shall be issued against them.”

Ruling on the defendants’ application to vacate the Mareva injunction and unfreeze the bank accounts, the judge held that the ex parte order subists pending the determination of AITEO’s motion on notice.

She adjourned till March 29 for hearing of the committal proceedings and other applications.