Contract crisis: CEO tenders 37 documents in NLNG, Macobarb N5b case

The hearing between Nigeria Liquefied Natural Gas (NLNG) and an indigenous contractor, Macobarb International Limited, has continued at the Port Harcourt High Court in the N5Bn case (Suit PHC/2013/CS/2022).

The Managing Director of Macobarb, Shedrack Ogboru, tendered 37 documents to prove that NLNG owes Macobarb N5.074 billion.

Justice Chinwendu Nwogu marked the documents in the KJ series, while the defence stated that their objections to two of the documents would be addressed during their submissions.

This follows two years of preliminary matters, numerous amendments between both parties and frequent changes of counsel by the claimant, Macobarb.

Ogboru relied on the statement of claims and the amendments adopted on September 29 and November 1, 2024, alongside the 37 documents marked as exhibits in the KJ series, as well as expert depositions.

Macobarb presented several documents and contract quotes to show that the contract included “stand-down payment” provisions. The company also called a forensic auditor to demonstrate that these contract clauses existed.

Macobarb argued that there is ample evidence showing they notified NLNG of contract payment failures. Relying on the position of NLNG’s general counsel, Macobarb amended its claim to N5.074Bn due to this failure.

Macobarb insists that NLNG’s failure to honour the contract closeout terms, agreed upon by both parties, has prevented the company from demobilising its equipment. The forensic accountant further calculated the liability incurred by NLNG due to their alleged negligence and implied detention of Macobarb’s equipment on-site.

Macobarb claims that, despite NLNG insisting no money was owed, the contract closeout agreement from February 10, 2016, included payments for a 20-foot caravan and balance payments for turnstiles and vehicle barriers amounting to N38 million. However, NLNG only paid N33 million and failed to settle various outstanding payments for previous milestones. NLNG had promised to issue two cheques for all outstanding payments but allegedly failed to do so.

Macobarb’s claims rely on paragraphs 51 to 60 and the minutes of the contract closeout meeting to justify the amendment to N5.074Bn. Macobarb highlighted clauses in the closeout agreement that empowered it to make such claims, stating that NLNG has not fulfilled its obligations under the contract.

The amended claims state that both parties agreed to conduct two valuations based on the contract terms—one before demobilisation and one after—but none have been completed due to NLNG’s refusal to comply.

Macobarb further claims that NLNG reneged on its promise to the Rivers State House of Assembly to settle the matter outside arbitration. As a result, Macobarb has been delisted by banks for financial support, and NLNG’s actions have not only breached the contract but deliberately subverted it. Evidence from a Zoom arbitration meeting in December 2020 was submitted to prove the issues discussed.

Cross-examination
NLNG’s legal team, led by Prof. Bayo Adaralegbe, began cross-examination on November 1, 2024, focusing on the eligibility of Macobarb’s CEO, Shedrack Ogboru, to be a party in the suit. They questioned where the contract allowed him to sue as an individual, to which Ogboru cited two sections.

Adaralegbe also raised the issue of a “performance bond” that was required to be submitted within 14 days of the contract’s commencement, challenging the claimant to show evidence that it had been submitted.

Cross-examination will continue on November 29 and December 2 and 3, 2024.