Supreme Court halts action on Chevron, Seplat oil blocs deal
THE Supreme Court yesterday barred Chevron from taking any step or action regarding the sale of the oil mining assets OML52, OML 53 and OML 55 to Seplat Petroleum Development Company following Brittania-U Nigeria Limited appeal.
The appeal, filed by Brittannia-U Limited arose from the ruling of an Appeal Court, which vacated an order of interlocutory injunction by a High Court, restraining Chevron and Seplat from concluding any deal on the two oil leases.
When the matter came up yesterday, the five-man panel presided over by Justice Tanko Muhammad ordered thus: “Parties in the matter are ordered to maintain status quo. No party is allowed to take any step that will affect the res (subject matter) of the appeal.”
The apex court reached the decision to issue the order for maintenance of status quo following request by Rickey Tarfa (SAN) with whom was Abiodun Owonikoko (SAN) to argue the appellant’s application for mandatory injunction seeking to reverse steps taken by Chevron to sell the disputed oil bloc to Seplat.
Tarfa had reminded the court that at the last hearing on March 24, 2015, the court fixed yesterday, May 18, 2015 to hear argument on the said application for mandatory injunction.
Although counsel to Seplat, Damian Dodo (SAN) with whom was Etigwe Uwa (SAN) agreed with Tarfa’s submission, he, however, said the appeal itself was ripe for hearing and prayed that energy be committed to arguing the appeal and not an interlocutory motion.
Counsel to Chevron Nigeria and BNP Paribas Securities Corp, Uche Nwokedi submitted that “the position as stated by Mr. Dodo is an accurate account of the history of this matter. And I’m bound by all he has said.”
Counsel for Chevron U.S.A Inc and Mr. Hermant Patel, A. V. Etuwewe said: “Both Senior Advocates for the respondents have said it all. I have nothing to add. I agree with them.”
In his response to the respondents’ counsel submissions, Tarfa explained that it was necessary to hear his application, which seeks not only reverse steps being taken by the respondents and to stop any further step that they may wish to take concerning the subject matter.
He submitted that there may be nothing to benefit from the appeal if an injunction to protect the res is not issued.
Following Tarfa’s submission, Presiding Justice Muhammad called on respondents’ counsel to know if they are issuing any undertaking regarding the res.
In his response, Dodo said all actions taken by his clients were before the appeal was instituted.
“Counsel have a duty to the court and indeed themselves to ensure that the dignity, majesty and authority of the court is paramount at all times. That is my principle and practice and that has been the conduct and practice of the first respondent and we shall continue to do so,” he submitted.
Nwokedi and Etuwewe, on behalf of their clients, said Dodo had stated their own position not to take any step and they were bound by that as stated.
In the unanimous decision, the court, perhaps out of caution, ordered parties to maintain the status quo pending the outcome of the appeal, which it adjourned to October 6, 2015.
The court had on March 23 adjourned to hear till yesterday, the application for mandatory injunction because the respondents needed time to file their counter affidavit to the appellant / applicants’ motion and supporting affidavit.
Consequently, the court allotted time to all parties to file their affidavits and written briefs of arguments relating to the mandatory application and fixed May 18, 2015 for definite hearing.
But before the adjournment, Tarfa had expressed concern that respondents were taking steps concerning the subject matter and had fixed next month to conclude by awarding the Oil Mining Assets to Seplat.
Although counsel to the respondents, Dodo and Nwokedi denied Tarfa’s claim, the Supreme Court warned parties against taking steps which affect the subject matter.
“Parties know better than to do anything to affect the res (subject matter). It is trite law that when a matter is pending, nothing should be done by any party to affect the res. This case is even stronger now that you have an application for mandatory injunction before us. Any party that does anything to a res know what will be visited upon him,” Justice Datijo Muhammad warned.
Trouble started after Chevron had offered for sale OMLs 52, 53 and 55 and as usual invited bids from interested firms. The sale of the assets became controversial after Chevron, in a bid to show transparency put the assets through a public bidding process, failed to make a public announcement of a winner, a reserve bidder and unsuccessful bids. It then allegedly turned its back on the highest bidder, Brittania-U Nigeria Limited, and began to deal with Seplat.
Brittania-U went to court to contest Chevron’s action of not declaring it winner after it posted a $1.67 billion bid for the three assets, an amount later revised to $1.015 billion after both companies’ officials met in Houston, United States.
However, Seplat posted a bid of $630 million for the same assets, the SPA indicated.
This bid, estimated to have been prepared around November 4, 2013 was later revised and replaced with a new one dated November 14, 2013.
But an examination of the bid process documents shows that Chevron bid rules forbade the forming of consortium after the bid had closed.
Oil industry analysts familiar with this process said even if this were to happen, other participants in the bid ought to have been informed, but Chevron allegedly did not.
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