As FG Tackles IOCs at Appeal Court – TheNigerialawyer

Davidson Iriekpen examines why the federal government is
dissatisfied with the dismissal of the two suits it filed against
two multinational oil companies at the Federal High Court for
under-declaring the volume of crude oil shipped abroad.

The federal government has given reasons why it is determined to
seek justice against two International Oil Companies (IOCs) –
Nigerian Agip Oil Company Limited (NGOC) and Brasoil Services
Company Nigeria, it alleged under-declared the volume of crude oil
shipped abroad.

In two notices of appeal it filed at the Court of Appeal, it
said the judgments were against the weight of evidence before the
court.

Justice Mojisola Olatoregun of the Federal High Court in Lagos
had last Wednesday dismissed the two suits on the grounds that the
government did not back its allegations against the oil companies
with sufficient evidence.

The case commenced when the government, through its counsel,
Prof Fabian Ajogwu, filed separate suits against Agip and Brasoil,
among others, at the Federal High Court in Lagos, claiming that the
oil companies had failed to fully declare crude oil shipments from
Nigeria to the United States of America amounting to $55,000,000
and $54,890,000 respectively during the period of 2011 to 2013.

The suits were predicated on the forensic analysis linking the
decline in crude oil export and government revenue to the alleged
under-declaration of volume of crude oil shipped out of the country
by the oil companies. It prayed the court to compel the oil firm to
pay the $55million with an annual interest of 21 per cent, as well
as $55million as exemplary damages.

During trial, the plaintiff called one witness and tendered
three exhibits, while the defendant also called one witness and
tendered 12 exhibits.

Three US-based experts – a US citizen and Lead Analyst at Loumos
Group LLC, a technology and oil and gas auditing firm based in the
US, Prof. David Olowokere; a counsel in the law firm of Henchy
& Hackenberg, Jerome Stanley, and founder and Chief Executive
Officer, Trade Data Services Company, State of Arizona, US, Michael
Kanko deposed to supporting affidavits to the suit.

According to them, millions of barrels of crude oil were
allegedly exported by the defendants and sold to buyers in the US
but the companies did not make due remittance to the federal
government contrary to the terms of agreement.

Agip and Brasoil denied the allegations and urged the court to
dismiss the suit.

But in her verdict, Justice Olatoregun, surprisingly held that
the plaintiff failed to provide sufficient evidence to substantiate
the claims. She held that there was no evidence that the crude oil
the defendant lifted was more than what was declared.

According to the judge, it was trite and settled law that he who
asserts must prove. She held that the exhibits before her did not
convincingly show a shortfall in the shipment of 949,096 barrels of
crude oil lifted by a vessel, MT Cosmos. She added that the
plaintiff failed to prove its case by supplying the requisite
evidence, adding that the main purpose of final address is to
assist the court.

“While I do not have any evidence to suggest that it is
impossible for the defendant to carry undeclared crude oil from
Nigeria, I have no evidence to show that MT Cosmos carried the
excess 500,000 barrels of crude oil with same bill of lading,” she
held.

“It is trite law that whoever asserts must prove that the facts
exist. No amount of brilliant address can make up for a lack of
evidence. The plaintiff failed to make out a case that 500,000
barrels of crude oil was offloaded in Pennsylvania. The case of the
plaintiff fails on the lack of proof on the preponderance of
evidence.

“At this stage, I do not find it necessary to proceed with the
evaluation of the other reliefs. I, therefore, proceed to make an
order dismissing this suit; it is hereby dismissed,” the court
held.
The court also dismissed a similar suit against Brasoil, seeking to
recover $4.8million in alleged missing oil revenue.

But the government faulted the judgments, saying lower court
erred in law when it failed to consider all relevant facts put
before it and that the court erred in law when it held that the
respondent had performed all its obligations in relation to the
under declaration of crude oil revenue to be remitted to it.

In the appeal against Agip, the appellant wondered how the lower
court arrived at the decision when it (the court) had agreed that
it was possible the vessel, Cosmic, in addition to the
non-contested shipment, lifted the contested-500,000 barrels of
crude oil. It also said the court failed to take into consideration
the fact that the defendant omitted to render proper account for
crude shipment exported at its behest which resulted in huge
financial losses to it.

The government averred that the lower court failed to take into
consideration the fact that the defendant had intentionally
neglected to properly account for all crude oil leaving the country
which as a result caused financial loss as there was an
under-declaration of the value of crude oil lifted and exported
which led to significant decline in crude oil revenue generated by
it.

It further stated that the court failed to take into cognisance,
the evidence of its sole witness relating to discrepancies in crude
shipment reviewed in the Pre-Shipment Inspection Report (PIR) as
contained in the records obtained from the United States and the
court did not take into cognisance the fact that the defendant,
under the extant laws of the Federal Republic of Nigeria, is
required to make full declaration of the details (quantity,
quality, mode, buyer, port of destination, and vessel) of its crude
oil shipments/exploration, including accounting records of such
prior to exporting same.

It also accused the lower court of not taking into cognisance
the fact that the crude oil shipments by the defendant to
Philadelphia Energy Solutions of 1735 Market Street, Philadelphia,
PA, USA and ENI Trading & Shipping B.V. of Strawinskylaan 1641-
Tower C/16 1077 XX Amsterdam, the Netherlands show a cumulative
non-declaration of a total of 500,000 barrels of crude oil in the
total value of USD55,000,000 as revenues/debts due to the appellant
from the undeclared sale of its crude oil.

The government was of the opinion that in line with established
principles of law, there must be a crucial appraisal and evaluation
of all evidence brought before the court.

In the notice of appeal against Brasoil Services Company
Nigeria, the government stated that the lower court erred in law
when it dismissed and held, “I am satisfied that the Oversea
Rebecca did not lift the 499,000 barrels of crude oil from Nigeria
and therefore has no responsibility to declare it,” and yet held
that it did not proved its case against the respondent.

It added that the court erroneously relied on Exhibit D-D6 to
hold that the MT Nikator lightered some of its crude into the
Oversea Rebecca and failed to take into cognisance the consistent
evidence of PW1 that the defence of lightering was absurd as the
Port of Houston was more than large enough to accommodate the laden
MT Nikator.

It also averred that the court failed to take into cognisance
that PW1 evidence showed that the MT Nikator has a draft/draught
that can be accommodated at the Port of Houston and discharged of
its cargo without lightering.

It contended that the court failed to take into consideration
the fact that the respondent had intentionally neglected to
properly account for all crude oil leaving the country which as a
result, caused financial loss to the federal government as there
was an under-declaration of the value of crude oil lifted and
exported which led to significant decline in crude oil revenue
generated by it.

It also stated that the court did not take into cognisance the
evidence of the its witness (PW2) wherein he maintained that any
shipment which is not contained in the PIR creates a discrepancy
and the records in the United States showed that vessel by the name
“Overseas Rebecca” discharged shipment from Nigeria which was not
declared in the PIR.

It further that the lower court failed to take cognisance of the
fact that the respondent admits that the volume of the missing
crude is about 499,000 barrels and that there is a consensus
between it and the respondent that the ‘Overseas Rebecca’ was
carrying and indeed, discharged Nigeria Akno crude at the port
Houston which is clear from Paragraph 15 of the respondent’s
amended statement of defence and as shown in Line 82 of Exhibit B
tendered by it.

The government contended that in holding that the appellant has
not adduced sufficient evidence to prove its case failed to
consider the fact that the respondent has not in its amended
statement of defence controverted, denied or impugned the validity
the evidence of the appellant as contained in Exhibits A — A6 and
Exhibit B, adding that the respondent during cross-examination of
PW2, validated the correctness and validity of Exhibit B, but
lamely tried to show that the crude on-board the Overseas Rebecca
was not received in Nigeria, not that it was not Nigerian
crude.

Arguing that it is trite law that an uncontroverted evidence of
a party is deemed established in a case, the appellant cited the
case of the Nigerian Army Council & Anor V. Erhabor (2018)
LPELR-44958 where it was held that, “It is an established principle
of law that, a court is entitled to accept and/or act upon
unchallenged and uncontroverted evidence. The evidence adduced by
the respondent, having not been controverted is deemed
established.”

Many observers are waiting to see how the Court of Appeal will
handle the appeal which borders more on national interest.

Culled from Thisday

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