Shell Kicks as Rivers State Seizes Assets over Refusal to Pay $460m Judgment Debt

Despite two Nigerian Supreme Court judgments, Shell Petroleum Development Company of Nigeria Limited (SPDC) has refused to pay the Ejama-Ebubu community in Tai Eleme Local Government Area of Rivers State, the sum of N182 billion (about $460m) in judgment debt awarded as damages against the oil company in an oil spill dispute.

But the Royal Dutch oil giant has contested the valuation.

Shell advised the community not to enforce the award while the injunction was in place.

It added that its current valuation of the size of the debt is “overstated” and “remains in dispute” in other court proceedings.

The Royal Dutch company has been involved in a long-running legal battle with the Ejama-Ebubu community of Rivers State, which in 2010 successfully sued the company for millions of dollars in damages for polluting its land.

The community has defeated several appeals filed by Shell, most recently at the Supreme Court last November.

Eight years ago, at Shell’s request, First Bank had reportedly provided a guarantee to the community for the original N17 billion award.

The Supreme Court in its second judgment delivered last November, had dismissed an application by SPDC seeking to set aside a N17billion (about $43m) judgment over oil spill.

A five-man panel of the court in a unanimous ruling dismissed the Shell application for lacking in merit.

Justice Centus Nweze who wrote the lead ruling in the case, marked: SC/731/2017, and read by Justice Samuel Osuji, agreed with the respondents, Ejama-Ebubu Community, that Shell’s application was an invitation to the court to overrule itself.

The judge said after a thorough examination of the briefs filed by parties, he elected to uphold the preliminary objection raised by the community.

He, therefore, dismissed the application and ordered parties to bear their respective costs.

THISDAY recalls that when Justice Ibrahim Buba of the Federal High Court in his judgment in 2010, awarded N17 billion and 25 per cent interest charge on the principal sum against Shell, the oil giant appealed against the judgment and applied for a stay of execution of the judgment pending the appeal.

As a condition for granting the stay of execution, the court required Shell’s bankers, First Bank, to provide a guarantee of the judgment sum plus interest.

This condition was complied with as SPDC quickly rushed to Appeal Court and ultimately, the Supreme Court and lost.

Following another decision by the Supreme Court last November, the police and court officials on January 12, stormed First Bank’s main branch in Port Harcourt, Rivers State to enforce the judgment and confiscate its property.

After losing all appeals, the oil giant has been foot-dragging on obeying the judgment of the highest court in the land.

Reacting to the action, the community lawyer, Lucius Nwosu (SAN), said the “coast is clear for enforcement of the judgment of 2010.”

According to him, “First Bank will not honour their guarantee because they, at their own peril, failed to get a cash backing from Shell before they issued the guarantee,” the lawyer had said.

“Those other cases cannot take precedence over the Supreme Court,” Nwosu added.

But First Bank in a statement said the action, which resulted in unspecified properties being taken, was “unjustified, illegal and a reckless misuse of the machinery of justice.”

According to the bank’s statement, the seizure ignored an interim court ruling obtained by Shell in December that restrains First Bank from paying out any money toward the judgment debt and prevents the community from taking steps to compel the bank to do so.

First Bank has filed its own pending motion seeking to cancel the decision permitting the confiscation of its property, the statement added.

While reacting to the last judgment of the Supreme Court, Ejama-Ebubu’s lawyer, Nwosu, put the total judgment debt at N182 billion.

“The judgment sum as at today, with the interest running, is in the neighbourhood of N182billion,” Nwosu had said.

He expressed displeasure with the alleged plot by the Central Bank of Nigeria to frustrate the execution of a garnishee order absolute the community got against the account of First Bank by the victims/judgment creditors in their bid to execute the judgment.

But Shell has disputed the amount, saying said the ruling of the apex court did not decide liability or the size of the award.

It also denied responsibility for the oil spill in the community, insisting that it was caused by ‘third parties’ during the Nigerian Civil War.

“The ruling of the Supreme Court did not decide liability or the size of the award, which remains in dispute in other ongoing court proceedings.

“It is our position that any attempt to enforce payment should not be permitted. It is regrettable that the legal process in this case has focused for so long on procedural issues and not the merits of the case. We have always maintained that we are ready to defend this case based on the available facts.

“This spill was caused by third parties during the Nigerian Civil War, a challenging period which resulted in significant damage to oil and gas infrastructure in the region.

“While SPDC does not accept responsibility for these spills, the affected sites in the Ebubu community were fully remediated.

“The claimants have, at their own admission in court, materially miscalculated and overstated the value of the award previously sought in this case.”

Shell also warned the community not to enforce the award while the injunction was in place.

According to the spokesman, its current valuation of the size of the debt is “overstated” and “remains in dispute” in other court proceedings.

 

 

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