Supreme Court Stops Chevron Oil Bloc Sale To Seplat | Independent Newspapers Limited
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Supreme Court Stops Chevron Oil Bloc Sale To Seplat

Posted: May 19, 2015 at 1:25 am   /   by   /   comments (0)

By Joe Nwankwo –Abuja


As controversy continues to trail the sale of three disputed oil wells, the Supreme Court on Monday, ordered Chevron Nigeria Limited not to take any action regarding the sale of the oil mining assets, OMLs 52, 53 and 55 to Seplat Petroleum Development Company, following an appeal by Britannia-U Nigeria Limited.

The appeal was based on the ruling by the Appeal Court vacating an order of interlocutory injunction by the High Court, which had restrained Chevron and Seplat from concluding any deal on the two oil leases.

At the resumed hearing of the matter, the five-man panel presided over by Justice Tanko Muhammad, ordered parties in the matter “to maintain status quo. No party is allowed to take any step that will affect the res (subject matter) of the appeal.”

The apex court reached the decision, following a request by Rickey Tarfa (SAN) and Abiodun Owonikoko (SAN) to argue the appellant’s application for mandatory injunction seeking a reversal of steps already taken by Chevron to sell the disputed oil blocs to Seplat.

Tarfa had reminded the court that at the last hearing of the case on March 24, 2015 the court fixed Monday, May 18, 2015, to hear argument on the said application for mandatory injunction.

Although counsel to Seplat, Damian Dodo (SAN) who appeared with Etigwe Uwa (SAN) agreed with Tarfa’s submission, he however said the appeal itself was ripe for hearing and prayed that energy be committed to arguing the appeal and not an interlocutory motion

Counsel to Chevron Nigeria and BNP Paribas Securities Corporation, Uche Nwoye (SAN), submitted that “the position as stated by Mr. Dodo is an accurate account of the history of this matter. And I’m bound by all he has said.”

Counsel for Chevron U.S. Inc and Hermant Patel, Barrister A. V. Etuwewe, said “both Senior Advocates for the respondents have said it all. I have nothing to add. I agree with them.”

Responding to submissions of respondents counsel, Tarfa explained that it was necessary to hear his application, which seeks not only to reverse steps being taken by the respondents and to stop any further step that they may wish to take concerning the subject matter.

He added that there may be nothing to benefit from the appeal if an injunction to protect the res is not issued.

Following Tarfa’s submission, Presiding Justice Muhammad called on respondents’ counsel to know if they are issuing any undertaking regarding the res.

In his response, Dodo said all actions taken by his clients were done before the appeal was instituted.

“Counsel have a duty to the court and indeed themselves to ensure that the dignity, majesty and authority of the court is paramount at all times. That is my principle and practice. And that has been the conduct and practice of the first respondent. And we shall continue to do so”, he added.

Nwokedi and Etuwewe said Dodo had stated their own position not to take any step and they were bound by that position.

In the unanimous decision, the apex court ordered parties to maintain status quo, pending the outcome of the appeal, which it adjourned to October 6, 2015.

The court had on March 23 adjourned till yesterday to hear the application for mandatory injunction, because the respondents needed time to file their counter affidavit to the appellant/applicants motion and supporting affidavit.

Consequently, the court allowed all parties to file their affidavit and written briefs relating to the mandatory application and fixed May 18, 2015 for definite hearing of the application.

But before the adjournment, Tarfa expressed concern that respondents were taking steps concerning the subject matter and had fixed next month to conclude by awarding the Oil Mining Assets to Seplat.

Although, Dodo and Nwokedi denied Tarfa’s claim, the Supreme Court warmed parties against taking steps that affect the subject matter.

“Parties know better than to do anything to affect the res (subject matter). It is trite law that when a matter is pending, nothing should be done by any party to affect the res. This case is even stronger now that you have an application for mandatory injunction before us. Any party that does anything to a res knows what will be visited upon him,” Justice Muhammad warned.

Trouble started after Chevron offered the oil blocs for sale, inviting bids from interested firms.

The process became mired in controversy after Chevron, in a bid to transparently put the assets through a public bidding process, failed to publicly announce a winning bid, reserve bid and the unsuccessful bids.

It then allegedly turned its back on the highest bidder, Brittania-U Nigeria Limited, and began to deal with Seplat behind the scene.

Brittania-U contested in court Chevron’s action of not declaring it winner after it made a $1.67 billion bid for the three assets. It later revised the amount to $1.015 billion after officials of both companies met in Houston, United States. Seplat, on the other hand, offered $630 million for the same assets.

The undated SPA (estimated to have been prepared around November 4, 2013) was later revised and replaced with a new one dated November 14, 2013. But an examination of the bid process documents showed that Chevron bid rules forbade the forming of consortium after the bid had closed.

Oil industry analysts familiar with this process said even if this were to happen, other participants in the bid ought to have been informed. But Chevron did not.