Court unfreezes Seplat’s accounts, suspends Mareva order in $85.8billion debt case

The Court of Appeal, Lagos Division has suspended order of Mareva injunction, which froze the accounts of an oil firm, Seplat Petroleum Development Company in an alleged $85.8m debt between it and Access Bank.

The appellate Court in it’s ruling set aside the decision of Justice Rilwan Aikawa of a Federal High Court, Lagos that granted the Mareva injunction last November 23.

Other defendants in suit are Cardinal Drilling Services Limited, Mr. Orjiako Bryant and Kalu Nwosu.   Justice Aikawa had granted the Mareva injunction following the bank’s argument canvassed by its counsel, Kunle Ogunba (SAN).

Justice Aikawa also ordered the Assistant Inspector General of Police, Zone 2, Lagos, the Commissioner of Police, Lagos State and their Deputies and Assistants to assist the Receiver/ Manager in his lawful duties over the assets of SEPLAT pending the hearing and final determination of the suit.

Ogunba had told the court that the order was necessary to preserve the res (subject matter) from being disposed of before the hearing and determination of the motion on notice.

Upon being served with the order, Seplat filed an application dated December 3, 2020, seeking to discharge the orders. The other defendants did the same.

While waiting for the court’s ruling on the applications, Seplat filed another application dated December 12, 2020, also seeking to discharge or lift the same interim order.

On December 14, Seplat’s counsel, Mr Abubakar Mahmood (SAN), made an oral application praying the court to grant his client access to the frozen offices and accounts.

He averred that Seplat had posted a bond of $20 million dollars as security. But Ogunba opposed him and urged Justice Aikawa not to fall for the temptation thrown at the court “by the debtor” who, according to him, owed over $85.8billion, which was enough to float two banks successfully in Nigeria.

Ogunba also prayed the court to refuse the application on the ground that it was not properly before the court, adding that the rules of court were meant to be obeyed with respect to making an application, which must be filed formally.

In a bench ruling, Justice Aikawa upheld Ogunba’s argument and refused the oral application. The assets affected by the Mareva order include; 25, Lugard Avenue, Ikoyi, Lagos, 6, Agodogba Avenue, Parkview, Ikoyi, Lagos and the one at 11, Oba Adeyinka Oyekan Street, Ikoyi, Lagos.

Dissatisfied, SEPLAT appealed against the ruling and urged the appeal court to suspend the order pending the hearing of the appeal. Seplat in it’s two-page written address stated that its offices have been sealed since December 2, 2020 and that it has imposed untold hardship on its operations. 

Seplat further informed the court that all its bank accounts have been frozen and that it is unable to pay for health and safety as well as critical supplies of goods and services.

Beside, Seplat told the court that it produces around 300 million SCFD of gas daily from OBEN Gas Plant in Edo state and Sapele Gas Plant in Delta State.

It stated that unless its offices are unsealed and it has access to its bank accounts, the gas production Plants may cease production and this might plunge some parts of the country into a power blackout and darkness.

The appellate court in its ruling delivered by Justice Joseph Ikyegh (presiding), supported by Justice Umaru Abubakar Sadiq and Justice Bayero Abdullahi-Mahmud, held that there is substance in the appellant’s application, adding that the mareva injunction granted by the lower court could cause irreparable damage to the operations of the appellant’s businesses.

Delivering the ruling, Justice Ikyegh held that the fear entertained by Access bank that lifting the order would amount to treating substantive issues at interlocutory stage was unfounded and not based on facts.

Justice Ikyegh further held that the first defendant (Access bank) did not challenge or contravene the crippling effect on appellant’s businesses, which may lead to a termination of gas supply to electricity generating companies and may cause power blackout in some parts of the country.

Consequently, appellate court ordered that the company’s sealed offices should be opened with immediate effect.

“I find substance in the application and thereby suspend the order of Mareva injunction granted by the lower court. All the bank accounts operated by the applicant are unblocked for transactions.

The Court however ordered SEPLAT to provide a bank guarantee in the sum of $20 million with a reputable bank in the name of the Chief Registrar of the court.

After the ruling, counsel to the appellant, Etigwe Uwa (SAN) informed the court that SEPLAT had already complied with the order. He told the court that SEPLAT on Thursday, January 21, 2021 deposited the sum of $20 million with Zenith bank in anticipation of the decision of the court.

Meanwhile, the bank, dissatisfied with the decision, has launched an appeal at the Supreme Court, praying it to set aside the decision of the court of appeal on the matter.