A Federal High Court sitting in Lagos, yesterday, cleared the way for Brittania-U to pursue asset sale claims against Chevron and others as it struck out all the objections of the defendants regarding its jurisdiction to hear the case.
With the issue of jurisdiction resolved, the judge can now go ahead to hear the substantive suit instituted by Britannia-U against Chevron and others last year over assignment of Chevron’s 40 percent participating interest in Oil Mining Leases (OMLs) 52, 53 and 55.
In a much-awaited ruling on the various preliminary objections filed by Chevron and other defendants, including Seplat, against the suit instituted in December last year by Brittania-U, the presiding judge, Justice M. N. Yunusa, declared that the court had the jurisdiction to hear the case.
“Furthermore, no holder of an oil mining lease can deal or dispose of such interest without prior approval of the minister, by virtue of Regulation 8 in the schedule to the Petroleum Act. Any such claim of dispute cannot be a mere simple contract because it will involve the prior consent of the minister and compliance with relevant provision of the Constitution and the Petroleum Act,” the judge said.
The defendants had objected that the Federal High Court lacked jurisdiction to hear the case because the dispute concerns a simple contract that ought to be tried at a State High Court.
Overruling the objection, the court held that assignment of Oil Mining Leases and control of interest over such lease, primarily, was a right vested by Section 44 of the Constitution of Nigeria in the Government of the Federation and that the minister was given statutory power to grant or revoke such leases.
Accordingly, the claims of Brittania-U were held to fall within subject matters on which the Federal High Court has exclusive jurisdiction under S.251(1)(n), (p), (q) and (r) as well as S.7(1) of the Federal High Court Act.
As there can be no determination of the dispute without having to pronounce on the statutory role of the minister and the interpretation of S.44 of the Constitution, the court accordingly dismissed the preliminary objection to its jurisdiction.
On whether the suit disclosed a reasonable cause of action, the court agreed with the counsels to Brittania-U, Rickey Tarfa (SAN)/Owonikoko (SAN), that the objections of Chevron and Seplat merely raised issues as to whether the case could succeed at the trial for being weak.
The court held that at the stage of preliminary objection, it was not permitted to determine or prejudge the merit of the case; that having gone through the Statement of Claim, there was a triable dispute as to why the highest bidder for the OMLs was not announced, the transparency of the bid process and whether Chevron arbitrarily or whimsically terminated the bid allegedly won by Brittania-U, as pleaded by the plaintiff in their claim.
The court also held that the fact that some of the “defendants” joined were agents of disclosed principal was not a matter of jurisdiction. Misjoinder of parties cannot defeat a suit once there is a competent suit to be determined, as between the parties before the court, and furthermore, since allegations were made in the pleading against the agents, the law is settled that any party against whom allegations were made must be made a party, the court further held.
On the contention that the case ought to be referred to arbitration under the confidentiality agreement, the court held that the claims were not arbitrable because it would be against public policy to refer the dispute to arbitration when the ultimate decision and control on the transaction is exclusively within the power of the minister under the Petroleum Act, and the minister is not a party to the arbitration agreement.
The court directed parties to take necessary steps for responding to all pending applications, in particular the motion to join the minister of Petroleum Resources and NNPC and to amend its Statement of Claim. The matter was adjourned to May 23, 2014 for hearing of pending applications.
With this decision, it would appear that the substantive case is firmly set for trial on its merit and all the defendants’ counsels prayed the court for time to take further instructions on the next steps to take in the action. The plaintiff is claiming specific performance of the assignment of the three OMLs or $10 billion damages for wrongful repudiation of the contract.
Britannia-U had in December 2013 instituted a case against Chevron Nigeria for not being declared winner of the bids for Chevron’s assets (OMLs 52, 53 and 55) after being allegedly adjudged the highest bidder for the blocs.
Olusola Bello
