Alleged $2.7bn Oil Theft Case: Court Declines To Unfreeze Shell’s Bank Accounts

…Summons three banks for alleged contempt

A Federal High Court in Lagos on Tuesday declined to vacate its
interim Mareva injunction directing 20 banks to block Shell
Petroleum Development Company of Nigeria (SPDC) and its
subsidiaries’ bank accounts. 

Justice Oluremi Oguntoyinbo, who made the ruling, also summoned
three of the banks’ secretaries and chief financial officers for
allegedly disobeying the order made on January 25, 2021.

The affected banks and their officials are: Citi Bank Ltd, its
Company Secretary Sola Fagbure and Chief Financial Officer, Sharaf
Mohammed;, Patrick Iyamabo; United Bank For Africa (UBA) Plc, its
Company Secretary Bill Andrew Odum and Chief Financial Officer,
Ebenezer Kolawole.

The court ordered the alleged contemnors to appear before it on
the next adjourned date of March 29, 2021. 

Justice Oguntoyinbo warned that their failure to appear would
result in a warrant of arrest being issued against them. 

The judge made the order in a ruling on three applications in a
suit marked FHC/L/CS/52/2021, filed by Aiteo Eastern E&P
Company Ltd against SPDC and four others.

Aiteo is claiming about $2.7 billion against SPDC over alleged
problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought
from the Anglo-Dutch group in 2015 and over claims that Shell
undercounted its oil exports.

Joined with SPDC as respondents in the suit are Royal Dutch
Shell Plc; Shell Western Supply and Trading Ltd; Shell
International Trading and Shipping Company Ltd; and Shell Nigeria
Exploration and Production Company Ltd.

Justice Oguntoyinbo granted the Mareva injunction on January 25,
2021 directing 20 commercial banks to block SPDC and its
subsidiaries’ accounts and barring Royal Dutch Shell’s Nigerian
subsidiaries from withdrawing money at 20 banks until it
“ringfences” potential damages in a lawsuit brought against the
firm by Aiteo. 

17 of the banks are said to have complied with the
order. 

The order was sequel to AITEO’s bid to recover from Shell, the
cash equivalent of more than 16 million barrels of crude oil
allegedly diverted by the oil giant. 

At the last hearing on March 9, the court faced three
applications by the Plaintiff AITEO and the Defendants SPDC and
Others relating to its jurisdiction, motion to discharge its
ex-parte order and committal proceedings against the three
banks.

AITEO’s counsel Mr Kemi Pinheiro SAN, leading Emeka Ozoani (SAN)
prayed the court to hear the committal proceedings first. 

Pinheiro reasoned that it was “necessary that the named persons
in committal proceedings (the bank officials) be present in court”
because the proceedings “attached to their person”.

He said alleged contemnors had been served “and there’s proof of
service,” adding that the quasi-criminal nature of committal
proceedings made their appearance a necessity. He noted that they
had not filed a response.

Adewale Atake (SAN) for SPDC, Olawale Akoni (SAN) for the banks
and Chukwuka Ikwuazom (SAN), for four Shell subsidiaries opposed
them, praying the court to instead hear applications questioning
its jurisdiction and another motion to discharge the order blocking
the accounts. 

When the case was called yesterday, the judge upheld Pinheiro’s
application and gave primacy to the application for committal
proceedings. 

“The committal proceedings is the appropriate application to
consider…I therefore hold that the first application to be heard is
the committal proceedings,” she said. 

The judge further ruled that the presence of the named bank
officials was necessary. 

She said: “The alleged contemnors must be present in court at
the next hearing, otherwise a warrant of arrest shall be issued
against them.”

Ruling on the defendants’ application to vacate the Mareva
injunction and unfreeze the bank accounts, the judge held that the
ex parte order subsists pending the determination of AITEO’s motion
on notice.

She adjourned till March 29 for hearing of the committal
proceedings and other applications.

…Summons three banks for alleged contempt

A Federal High Court in Lagos on Tuesday declined to vacate its
interim Mareva injunction directing 20 banks to block Shell
Petroleum Development Company of Nigeria (SPDC) and its
subsidiaries’ bank accounts. 

Justice Oluremi Oguntoyinbo, who made the ruling, also summoned
three of the banks’ secretaries and chief financial officers for
allegedly disobeying the order made on January 25, 2021.

The affected banks and their officials are: Citi Bank Ltd, its
Company Secretary Sola Fagbure and Chief Financial Officer, Sharaf
Mohammed;, Patrick Iyamabo; United Bank For Africa (UBA) Plc, its
Company Secretary Bill Andrew Odum and Chief Financial Officer,
Ebenezer Kolawole.

The court ordered the alleged contemnors to appear before it on
the next adjourned date of March 29, 2021. 

Justice Oguntoyinbo warned that their failure to appear would
result in a warrant of arrest being issued against them. 

The judge made the order in a ruling on three applications in a
suit marked FHC/L/CS/52/2021, filed by Aiteo Eastern E&P
Company Ltd against SPDC and four others.

Aiteo is claiming about $2.7 billion against SPDC over alleged
problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought
from the Anglo-Dutch group in 2015 and over claims that Shell
undercounted its oil exports.

Joined with SPDC as respondents in the suit are Royal Dutch
Shell Plc; Shell Western Supply and Trading Ltd; Shell
International Trading and Shipping Company Ltd; and Shell Nigeria
Exploration and Production Company Ltd.

Justice Oguntoyinbo granted the Mareva injunction on January 25,
2021 directing 20 commercial banks to block SPDC and its
subsidiaries’ accounts and barring Royal Dutch Shell’s Nigerian
subsidiaries from withdrawing money at 20 banks until it
“ringfences” potential damages in a lawsuit brought against the
firm by Aiteo. 

17 of the banks are said to have complied with the
order. 

The order was sequel to AITEO’s bid to recover from Shell, the
cash equivalent of more than 16 million barrels of crude oil
allegedly diverted by the oil giant. 

At the last hearing on March 9, the court faced three
applications by the Plaintiff AITEO and the Defendants SPDC and
Others relating to its jurisdiction, motion to discharge its
ex-parte order and committal proceedings against the three
banks.

AITEO’s counsel Mr Kemi Pinheiro SAN, leading Emeka Ozoani (SAN)
prayed the court to hear the committal proceedings first. 

Pinheiro reasoned that it was “necessary that the named persons
in committal proceedings (the bank officials) be present in court”
because the proceedings “attached to their person”.

He said alleged contemnors had been served “and there’s proof of
service,” adding that the quasi-criminal nature of committal
proceedings made their appearance a necessity. He noted that they
had not filed a response.

Adewale Atake (SAN) for SPDC, Olawale Akoni (SAN) for the banks
and Chukwuka Ikwuazom (SAN), for four Shell subsidiaries opposed
them, praying the court to instead hear applications questioning
its jurisdiction and another motion to discharge the order blocking
the accounts. 

When the case was called yesterday, the judge upheld Pinheiro’s
application and gave primacy to the application for committal
proceedings. 

“The committal proceedings is the appropriate application to
consider…I therefore hold that the first application to be heard is
the committal proceedings,” she said. 

The judge further ruled that the presence of the named bank
officials was necessary. 

She said: “The alleged contemnors must be present in court at
the next hearing, otherwise a warrant of arrest shall be issued
against them.”

Ruling on the defendants’ application to vacate the Mareva
injunction and unfreeze the bank accounts, the judge held that the
ex parte order subsists pending the determination of AITEO’s motion
on notice.

She adjourned till March 29 for hearing of the committal
proceedings and other applications.