ABUJA – Hearing in a motion seeking to join the Nigerian National Petroleum Corporation (NNPC) and the Minister of Petroleum, in a case instituted by Brittania-U Nigeria Limited, last December, over the divestment of Chevron’s interest in Oil Mining Leases (OMLs) 52, 53 and 55 has been fixed for May 30, by a Federal High Court sitting in Ikoyi, Lagos. Justice Yunusa Mohammed fixed May 30th, 2014 to hear the motion for joinder, after ruling on which application to take first in order of priority. At the resumed hearing of the matter, lawyers to the plaintiff, Rickey Tarfa, (SAN) and Abiodun Owonikoko (SAN) informed the court that the business of the day was for their pending application dated January 31st, 2014 seeking to join the NNPC and the minister of Petroleum to be taken. But lawyers representing the first defendant (Chevron Nigeria Limited) and the fourth defendant, ( Hermant Patel), Uche Nwokedi (SAN) and A. Etunwewe, informed the court that they had appealed against the ruling dismissing their objections to jurisdiction on May 13th, 2014. The duo said they had an application for stay of proceedings pending the appeal filed that morning.

Also, D. O. Dodo lawyer representing the fifth defendant (Seplat Petroleum Development Company Limited), confirmed to the court that he received motions from the first and third defendants, noting that he had also appealed against the ruling of the court and also filed motion for stay of proceeding. Dodo stated that the plaintiff’s lawyers had reacted to his motion for stay and that the reply to their written address was absolutely necessary, in order to avail the court the benefit of full argument. Apparently miffed by this development, Rickey Tarfa (SAN) lawyer to the plaintiff, , acknowledged receipt of the fifth defendant’s application only on May 22, 2014 ( a day before the court proceeding) stressing that the application of plaintiff adjourned for the day had been pending since January 31st, 2014 and needed to be taken. “My Lord, that application has not been taken because of the defendants lawyers request on the issue of jurisdiction and it was singled out at the last hearing on May 13, to be taken today, in order of priority but most important is the issue of correcting the names of parties on record.”

Citing the case of Lagos state vs. Dosumu, reported in 1989 Nigerian Weekly Law Report (NWLR), Part 111, page 614, the plaintiff’s lawyer argued that the issue of parties enjoys priority over any other issue, and that proper parties must be brought into the suit for the purpose of responding, so as to move forward in the matter. However, Uche Nwokedi (SAN) lawyer representing Chevron Nigeria Limited, observed that the matter before the court was rather contentious and required his client to be sure it was properly represented before the court. He said the parties were bound to stay action until the notice was heard. He urged the court to set down application for stay of proceedings for hearing before any other application. Supporting Nwokedi’s position, A. Etunwewe, lawyer to the second and fourth defendants, said the stay of proceeding took priority over any other application. He said the parties that plaintiff intended to bring into the matter did not participate in the application challenging the jurisdiction of the court, and that therefore, they could not file any appeal at the Court of Appeal. Etunwewe also urged the court to discountenance the case of Lagos State vs. Dosumu, cited by the learned silk, saying that the case did not apply in the present instant . “It has no relevance in this case, as the application for stay of proceeding ought to take priority, because that will show to the judge, the direction of the case.” Pressing further, D. O. Dodo (SAN) in urging the court to abide by this tradition and citing the case of Mobil Producing Nigeria Unlimited vs. SPS Limited 2013, 17 NWLR at 1384, page 573 said practice has shown that the application for stay of proceeding takes priority over every other application.

But Rickey Tarfa (SAN) would take none of that, saying the citation of that case did not relate to the instant case. According to him, application before the court was seeking for relief for joinder and nobody had countered that argument. About 20 minutes later, the Judge in a short ruling held that putting both applications in an imaginary scale of preference, the only motion ripe for hearing was the plaintiff’s motion which had been pending since January 31st, 2014. Justice Yunusa then asked the plaintiff’s lawyer to proceed with the application. At this stage, all the defendants’ lawyers expressed their unpreparedness to oppose the motion for joinder, thereby asking for adjournment to enable them file counter affidavit to the motion. Meanwhile Justice Yunusa Mohammed acceded to the defendants’ lawyers request for adjournment and fixed May 30th, 2014 for the plaintiff to argue its motion for joinder and also abridged the time for the defendant to file their counter affidavit by Wednesday May 28, 2014 so as to give the plaintiff the opportunity to react before the next adjourned date. Brittania-U had approached the Federal High Court Ikoyi, Lagos, asking the court to declare that by the final binding offer made by the plaintiff to the first defendant on November 14 and 15, 2013, at a meeting at Chevron’s office in Houston (USA) Brittania-U was deemed to have been accepted by Chevron. The company had sued Chevron Nigeria Limited, Chevron U. S.A. Inc, BNP Paribas Securities Corp., Hermant Patel and Seplat Petroleum Development Company Limited.

The meeting in Houston, we learnt, was held at the instance of the president of the second defendant, Chevron Corp. The second defendant requested Brittania-U to provide firm Board commitment letter issued by the plaintiff’s bankers for payment of the balance of $765million, which was duly furnished by plaintiff’s bankers, directly to the second defendant at their Houston office on November 15, 2013. One legal expert told BusinessDay that with that done, it would ordinarily be taken that the parties had entered into binding contract for the acquisition of OMLs 52, 53 and 55 by the plaintiff from the first/second defendant for valuable consideration of the plaintiff’s revised bid of $1, 015, 000, 000.00, for acquisition of the 40 percent participating interest of Chevron Nigeria Limited in Oil Mining Leases 52, 53 and 55, by the first defendant; by its conducts, oral and written representations made thereafter on which the plaintiff relied and acted to its detriment. This is also perceived to be supported by provision of the Irrevocable Standby Letter of Credit (SBLC) for the sum of $250m, representing 15 percent of the company’s initial bid price of $1.667billion, opened in favour of the first/second defendant on September 30, 2013 when the bid process closed. The said Irrevocable Standby Letter of Credit, we were told, was part of the conditions laid down by the first/second defendants and for a binding bid, and that the SBLC is still being held by the first/second defendants till this moment.

Sources close to the Chevron process said the $250m SBLC from the plaintiff is still the highest deposit by any bidder for the assets. Brittania-U’s bid/deposit was followed by Seplat’s initial bid of $630million with $94,5million as its 15 percent deposit. Industry analysts say that the Chevron asset sales process has become the most controversial in the asset divestiture by international oil companies (IOCs) doing business in Nigeria, and has become potentially damaging to the image of the oil major. The Chevron asset sale that has now become messy, raises questions, legal experts say, adding that arguments in the case may centre around answering questions such as: “why was the winner of the bid not published or the perceived highest bidder, Brittania-U, not announced? Was there a letter of award given to the plaintiff with 90 days to pay as per the bid condition and they failed? Why would a higher bid be refused for a lower bid? With the irrevocable Letter of Credit still with Chevron since September 30 2013, can anybody say that the plaintiff is not a serious bidder?” BusinessDay had earlier reported in following this transaction, that Brittania-U was never given an award letter, indicating that Chevron felt Brittania-U may not have the funds to back their bid.

Brittania-U specifically sought the court for an order declaring that the 1st-4th defendants have no right to proceed to invite bids, offer or accept, negotiate, purport or so represent or engage in any transaction or contract to transfer, sell, farm out or otherwise deal in, dispose of charge encumber, or divest the 40 percent participating interest of Chevron Nigeria Limited in OML 52, 53 and 55 in favour of any other person, entity or whomsoever, or in derogation from or in disregard of the agreement entered into between the plaintiff and the first defendant on November 14th and 15th, 2013 whereby the parties entered into binding contract for the acquisition of the oil blocks by the plaintiff from the first defendant in the sum of $1.015 billion.

– BUSINESS DAY