Court orders company, Orjiako to pay $144.2m debt to three banks

A Federal High Court sitting in Lagos has ordered Shebah Exploration & Production Company Limited, Allenne Limited and Dr. Ambrosie Bryant Chukwueloka Orjiako, to pay the sum of $144.2 million to three banks.

The amount, which was to be paid to African Export-Import Bank, Diamond Bank Plc and Skye Bank Plc, was the outstanding and accrued interest on a facility granted to the defendants in 2011.

Dr. Orjiako, known as one of the founders of Seplat Petroleum is currently the Chairman of Seplat as well as the President of Shebah Exploration & Production Company Ltd.

The Federal High Court ordered the defendants to comply with the judgment and denied the defendants permission to appeal it.

The claimants had dragged the defendants to the High Court of Justice, Queen’s Bench Division, in order to recover an outstanding of the loan facility granted them.

They had prayed the court to determine whether it was arguable that, in entering the Facility Agreement, the parties were contracting on the claimants’ written standard terms of business so as to engage section 3 of the Unfair Contract Terms Act 1997 (‘UCTA’).

The 1st defendant, Shebah Exploration & Production Company Ltd is a Nigerian company engaged in oil exploration and production and the borrower of said loan, while 2nd defendant, Allenne Ltd is the guarantor of the borrowed loan.

Meanwhile, the 3rd defendant, Dr. Ambrosie Bryant Chukwueloka Orjiako, is the President of Shebah and a personal guarantor of the liabilities of Shebah and Allenne, pursuant to a Deed of Guarantee and Indemnity dated July 1, 2011.

In a judgment delivered by Justice Phillips of the High Court of Justice, Queen’s Bench Division on February 19, 2016, the judge stated that Shebah had taken the loan for purpose of discharging certain of its existing borrowings, and to provide working capital for its operations, including funding for a work-over programme to stimulate production at oil wells in the Ukpokiti oil field.

According to the judgment, the defendants never denied that the claimants advanced $150 million to Shebah pursuant to the facility agreement, nor disputed that, apart from paying one installment of $6,111,111.11 in June 2012 but that Shebah has failed to meet any further repayment installment, despite the claimants agreeing to the deferral of several installments.

The judge held that defendants agreed that, in exchange for the claimants’ discontinuing the proceedings, Shebah would repay all sums outstanding under the facility agreement in two tranches of $49.999,999.86 (with accrued interest) by April 30, 2014 and the balance of the loans and interest by July 1, 2014.

He added that Shebah failed to pay any part of the sum due on April 30, 2014.