Alleged Diversion Of Crude Oil: AITEO Asks Court To Commit 2 Banks To Prison

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A Federal High Court in Lagos has fixed March 2 to rule on whether to first hear an application challenging its jurisdiction or committal proceedings against 2 banks for disobeying its order to freeze the accounts of Shell Petroleum Development Company, SPDC.

Justice Oluremi Oguntoyinbo fixed the date after hearing arguments of lawyers in the case on which application should be heard first.

AITEO Eastern E & P Company Ltd through its counsel, Kemi Pinheiro SAN had filed form 48 as provided under the Sherrif and Civil Process Act to initiate contempt proceedings against the banks and its officials.

Pinheiro told the judge that the alleged contemnors willfully disobeyed the court’s interim orders of January 25, 2021, directing them to block SPDC accounts, for allegedly “interfering, obstructing and/or frustrating compliance with the interim orders.”

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

AITEO further asked for an order “directing the Inspector General of Police through his officers to “immediately arrest, detain, investigate and prosecute the respondents for interfering with the course of administration of justice…”

After discharging 3 banks that had no relationships with SPDC, Pinheiro told the judge that out of 20 nominal respondent banks in the case, two had failed to comply with the order of the court particularly as it relates to the filing of an affidavit to disclose the amount standing in the credit of SPDC in their respective banks.

Lawyers to the banks and lawyers to Shell opposed the application to hear the committal proceedings first.

Counsel to Shell, Adewale Atake SAN instead informed the court of his pending application asking the court to stay proceedings and refer the case to Arbitration.

He also told the judge that he had filed another motion for the discharge of the order freezing his clients’ accounts. He urged the court to hear his application first.

In an oral application, Atake submitted that the “Mareva order” of the court directing the freezing of the bank accounts should be varied, on the ground that it had imposed “hardship” on Shell and even the Federal Government. He said there was a danger that the oil giant could not pay workers’ salaries, and contractors would not be able to execute contracts.

But the judge declined his oral application, noting that the Federal Government was not a party to the suit.

Counsel for the banks, Olawale Akoni SAN, also asked the court to hear his application to discharge the Mareva Order first.

But Aiteo’s counsel, Pinheiro opposed both applications. He said,

“My lord, a party who is in disobedience of court order cannot be seeking relief from the same court and a party who has filed a motion challenging the jurisdiction of the court cannot equally be seeking for favour from the same court,”.

Justice Oguntoyinbo maintained that the Mareva order subsists. She deferred her ruling on which application to be heard first till next Tuesday, March 2

On January 25, 2021, Justice Oguntoyinbo had granted an interim Mareva injunction directing 20 commercial banks to freeze the accounts of Shell Petroleum Development Company of Nigeria Ltd.

She made the order following AITEO’s ex parte application seeking to recover the cash value of more than 16 million barrels of crude oil allegedly diverted by the oil giant from AITEO.

She directed the 20 banks to “ring-fence any cash, bonds, deposits, all forms of negotiable instruments to the value of $2.7 billion and pay all standing credits to the Shell companies up to the value into an interest yielding account in the name of the Chief Registrar of the court.”

The Chief Registrar is to “hold the funds in trust” pending the hearing of the motion and determination of the motion on notice for interlocutory injunction filed before it by AITEO.

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