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Malabu Oil Deal:Nigeria’s $1bn lawsuit against Shell and Eni struck out by UK court

Nigeria’s $1 billion suit against Royal Dutch Shell and Eni, oil giants,has been dismissed by a UK court on the ground that court does not have jurisdiction to hear the matter, which has a parallel proceeding in Italy, also brought by the Nigerian government over the Malabu deal.

Nigeria had sued Shell and ENI for $1.1 billion in 2011 over the licencing of OML 245 which the nation claims the said companies made it miss as a result of bribes they paid to Malabu oil, owned by former Minister of Petroleum, Dan Etete

While Shell and ENI paid a signature bonus of $210 million to the federal government, they paid $1.1 billion to buy 100 percent interest in the oil block from Malabu. The entire $1.3 billion was transferred to the account of the federal government in London, UK, from where Malabu was paid its $1.1 billion.

However both oil companies have denied the bribery allegations, with Eni saying it made no profit from the deal because “Nigeria declined to grant a mining license”.

Christopher Butcher, the judge, gave the ruling at a virtual hearing on Friday, setting back the long standing trial on the Malabu oil deal of 2011.

Nigeria was also denied permission to appeal against the judgment.This of course doesn’t affect the ongoing Italian proceedings where Nigeria has a separate legal claim. Eni is now making argument for costs against the Federal Republic of Nigeria.

Justice Butcher’s written ruling finds the English case and the Italian proceedings have the same parties, same essential facts (or cause of action), and considered broadly the cases have the same object in mind – redress for alleged bribery by Shell and others.

Nigeria’s lawyer lays out that the defendants; Shell, Eni & EVP have racked up an “excessive” £3m in costs, compared to £850k by Nigeria. They call the defendants’ approach “heavy handed” and say its not appropriate for the defendants to claim costs for issues they dropped.

Interestingly Justice Butcher ruled against Shell’s arguments that Nigeria misled the court in its initial application. He found: “it does not appear to me that there was a failure to disclose or misrepresentation of matters which might have misled the court”

Justice Butcher says he won’t use Nigeria’s lawyer’s terms of “staggering” or “eye watering” but that “there probably has been a heavy handed approach on behalf of the defendants to resisting” the claim and that they racked up £3m in costs is “concerning” to the court.

Justice Butcher says costs overall were “decidedly high” and orders that FRN pay the same amount of Eni’s costs that Nigeria agreed with Shell. He says Obi/ EVP’s arguments were “optimistic” given Obi has been convicted in Italy so Nigeria will pay less of their costs

Nigeria argues that they should be allowed to appeal the judgement on the basis of several legal precedents. Eni and Shell disagree with Nigeria’s arguments and say Nigeria shouldn’t be allowed to appeal.

Nigeria will have to seek permission to appeal from the court of appeal as Justice Butcher says he won’t grant permission.

That’s the end of the hearing. Any intrepid journalists who’d like to report on the ruling please do get in touch and I can pass on a copy of the judgement.

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