A Nigerian oil and gas consultancy firm, Contraco Limited, has sued the Nigerian National Petroleum Corporation, Total Upstream Nigeria Limited, Samsung Heavy Industries Company Nigeria Limited and Hyundai Heavy Industries for $31m (N11.16bn).
Contraco accused the NNPC of conniving with foreign companies to cheat a Nigerian firm and prevent it from collecting its consultancy fee of $31m.
The suit filed before Justice S.S. Ogunsanya of a Lagos State High Court is in connection with a contract for the supply of an Oil Offloading Terminal for OML 130, otherwise known as Egina Field Development.
The contract is worth $3.9bn and was awarded to Samsung with a capacity of 200,000bpd.
Explaining the origin of the legal battle, Contraco said in its statement of claims that Total had in 2009 published an invitation for tender pre-qualification for the contract, which was a production-sharing contract between Total and the NNPC for the supply of an Oil Offloading Terminal for OML 130 – Egina Field Development.
Hyundai was said to have indicated interest in the Tender and commenced talks with the Contraco to act as its consultants to the bid in 2011.
According to Contraco, it was agreed that in the event of a successful bid by Hyundai, the claimant shall be entitled to one per cent of the entire contract sum offered by Total.
Hyundai and Samsung therefore submitted bids which were evaluated by Total and National Petroleum Investment Management Services.
According to Contraco, at end of the evaluation of the commercial bids, Hyundai was adjudged to be “the lowest responsive evaluated bid and by Section 24 (3) of the Public Procurement Act was the winner of the bid and should ordinarily have been awarded the contract.”
“To this end, the 2nd defendant (Total) wrote a letter dated March 30, 2012 to the Group General Manager of the 1st defendant (NNPC), confirming that the 3rd defendant (Hyundai) had the lowest responsive evaluated bid, and recommending award of the contract to the 3rd defendant (Hyundai),” Contraco said.
The claimant said on receipt of Total’s letter on March 30, 2012, the Group Executive Director of NNPC issued a memorandum passed on April 12, 2012, to the Group Executive Committee of the NNPC, acknowledging that the bid went through the three-tier process with active participation of the National Petroleum Investment Management Services, Nigerian Content Development and Monitoring Board and Total.
He then requested the Group Executive Committee of the NNPC to approve the award of the contract to Hyundai at “a total contract ceiling of $3, 965,972,265, having met the requisite Nigerian Content Plan, offered the lowest commercial bid and having presented the best execution plan.”
Contraco said when the NNPC continued to delay the contract, its client, Hyundai, wrote a letter to the then President, Goodluck Jonathan on July 29, 2012 to ensure that it was awarded the contract on time.
The firm claimed that its letter to the ex-President enraged the NNPC which rather than award the contract to Hyundai, raised issues of lack of due process in the bid procedure.
The claimant said rather than award the contract to Hyundai, the NNPC gave Samsung the opportunity of amending its bid without giving Hyundai that same opportunity, a move which contravenes the Public Procurement Act.
Contraco said, “Contrary to overwhelming recommendations by the officials of the 1st defendant (NNPC) that the 3rd defendant (Hyundai) be awarded the contract, the 1st and 2nd defendants (NNPC and Total) conspired with the 4th defendant (Samsung) and awarded the contract to the 4th defendant (Samsung) having negotiated a five per cent discount off the contract price from the bid initially presented by the 4th defendant (Samsung). The negotiated five per cent discount was not offered to other bidders.”
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A Report Of The Judgement Of The 16 Divisions Of The Court Of Appeal In Nigeria