Appeal Court Strikes out Brittania-U’s Suit against Chevron, Others over OMLs

The three-man panel of the court, Justice MA Owoade, Justice H.A Barka and Justice BM Ugo, held that the appeals by the defendants that the lower Court lacked jurisdiction had merit. Brittania-U Nigeria Limited had filed a suit at the Federal High court claiming that it submitted the highest bid for the acquisition of Chevron’s 40 per cent interest in the three oil blocks but that Chevron refused to declare it the successful bidder in spite of repeated demands. Also citing the minutes of a meeting held in Houston, United States on November 14, 2013, the Nigerian company also argued that its final binding offer was accepted by the representatives of Chevron at the said meeting. The Federal High Court presided over by Justice M.N Yunusa, now retired, on December 13, 2013, granted Brittania-U interim orders restraining Chevron and its affiliates from proceeding or continuing to invite bids or engage in transaction calculated to transfer Chevron’s interest in OMLs 52, 53 and 55 to Seplat or any other company apart from Brittania-U. Justice Yunusa also ordered the amendment of the interim orders on December 23, 2013 but on the receipt of the amended order, Seplat filed an application dated December 27, 2013 seeking to discharge, vary or set aside the Interim Orders. Counsel to the defendants Uche Nwokedi & Co., D. D Dodo & Co., Streamshowers & Kohn, and A.V Etuwewe & Co. all also filed notices of preliminary objections essentially challenging the jurisdiction of the Federal High Court to entertain the suit. During the proceedings Justice Yunusa also renewed the lifespan of his earlier interim orders pursuant to an application in that regard by Brittania-U’s counsel, Mr Rickey Tarfa (SAN). However, the judge’s decision by which he extended the lifespan of the interim orders was set aside by the Court of Appeal in a judgment delivered court on June 20, 2014. Brittania-U appealed against the judgment of the Court of Appeal to the Supreme Court. While at the Supreme Court, Brittania-U also made an effort to obtain an order from the apex court to set aside the consent of the Petroleum Minister to the transfer of the OMLs to Seplat and its partners, arguing that the consent was obtained during the pendency of the suit and a motion for interlocutory injunction to restrain any such transfer. However, the Supreme Court did not accede to this request and the judgment of the Court of Appeal was also affirmed by the Supreme Court. Justice Yunusa heard the preliminary objections to his jurisdiction on March 20, 2014 and delivered his ruling on May 13, 2014, where he held that the preliminary objections lacked merit and thus assumed jurisdiction to entertain the substantive suit. However, three appeals were filed against Justice Yunusa’s ruling on the issue of jurisdiction, by Chevron Nigeria Limited, and BNP (CA/L/557/2014), Seplat (CA/L/495/2016) and Chevron United States and Mr Patel (CA/L/1105/2016). In the judgement delivered by the Court of Appeal, the lordships held that the Federal High Court lacked jurisdiction. The Court of Appeal also held that even if the Federal High Court had jurisdiction, the suit itself did not disclose a reasonable cause of action to be worthy of that court’s consideration. The appellate court held that BU’s case, as constituted before the Federal High Court, was a case in simple contract and that court lacked jurisdiction to hear such a case. The Appeal Court submitted that relying on clauses 2 and 4 of the Bid Procedure Document pleaded and relied upon by BU, which clearly states that bids submitted by participants did not constitute an offer and that Chevron had exclusive right to accept or reject any bid and to modify the rules and procedures at any stage of the bidding process, BU has no right to complain or challenge Chevron’s discretion. The Court of Appeal added that the suit therefore, did not disclose a reasonable cause of action. It also held that BNP, Chevron United States and Mr Patel could not validly be called upon to answer to BU’s reliefs grounded in breach of contract, being agents of a disclosed principal. The judges, however, held that they could be made to answer to the claims for tortious interference with contractual right and costs. These findings, according to the court, are subject to the court’s findings on jurisdiction. The court said having found that the lower court lacked jurisdiction to entertain the suit, the findings to the effect that they could be made to answer to the claims in torts is of no moment. The appellate court also held that the lower court was right for refusing to give effect to the arbitration agreement, the appellants not being privy to the arbitration agreement. This finding too, it said, is of no consequence in view of the finding that the lower court lacked jurisdiction to entertain the suit.]]>