April 20, 2010

Shell loses appeal to forfeit Bonny Terminal land

By  Innocent Anaba
PORT HARCOURT—THE Court of Appeal sitting in Port Harcourt, Rivers State, weekend, re-affirmed a  Rivers State High Court order, which ordered Shell Petroleum Development Company of Nigeria Limited, SPDC, to forfeit land on which its oil tank farm and the biggest oil terminal in Africa, Bonny Terminal, is situated, to the owners, the Bonny people.

The court ruled that it was wrong for Shell to have gone behind the back of the land owners to obtain a Certificate of Occupancy (C of O) in respect of the same land from the Rivers State Government, without the consent and knowledge of the land owners.

The Shell Bonny Terminal which has over 12 million barrel of crude oil storage capacity is also the biggest export terminal in the country.

It  has a helipad and facilities capable of loading supper tankers. It also has an indoor berthing facility that can take six ocean-going tankers, an expatriate club, a residential area,  among others.

Shell, by an agreement dated 22 July 1958, and entered into between the Bonny land owners,  represented by Chief Henry Brown and Chief Victor Jumbo, agreed to use the land, measuring 1354 acres, at a rent of no more than two pounds, which from 1962 became payable yearly, but Shell, without consulting the Bonny land owners, obtained a C of O, dated 18 March  1998, which purport to turn it (Shell) into the landlord, rather that a tenant it was by 22 July 1958 agreement.

Following an investigation by Mr. Lucius Nwaosu, SAN, counsel to the Bonny people and discovering the said C of O in favour of Shell, in respect of the same land, covered by the 22 July 1958 agreement, the Bonny people approached the State (Rivers) High Court to determine the legality or otherwise of the said C of O.

Delivering judgment in the matter and after considering the argument of counsel, the presiding judge in the matter, trial judge at the lower court, Justice M.O. Opara, in October 2008, declared that at all material times the claimants as customary owners and consentors are the landlords of Shell in respect of all that piece or parcel of land lying and situate between the towns of Bonny and Finima in the Bonny Local Government Area of the Rivers State contained in a Deed of tenancy made on  22 July  1958 and registered as No.51 in volume 5 of the lands Registry in the office at Enugu now kept in Port Harcourt.

Dissatisfied with the judgment, Shell appealed against same before the Court of Appeal, Port Harcourt.

The appellate court panel, made up of Justice Suleiman Galadima, Justice Istifanus Thomas and Justice Ejembi Eko, in their judgment, upheld the judgment of the lower court.

Justice Eko, in the lead judgment, after reviewing the facts of the suit, which was unanimously agreed by the other Justices, said “in summary, this appeal substantially lacks merits and it is hereby dismissed.”

The appellate court meanwhile set aside the alternative reliefs granted by the lower court in suit PHC/1198/2005.

The orders granted by the lower court, which was affirmed by the appellate court includes:

* That upon the coming into effect of the land Use Act in 1978 the claimants were deemed to be grantees of or holders of the right of occupancy over the land covered by the said Deed of tenancy.

* That the act of Shell in obtaining secretly from the Rivers state government, without the knowledge and consent of the claimants, a certificate of occupancy in respect of the land covered by the said Deed of Tenancy and which certificate of occupancy is registered as No 33 at Page 33 in volume 258 of the Lands Registry in the office at Port Harcourt is unconstitutional, null, void and of no effect.

* That before the said certificate of occupancy was granted by River State government to the Shell,  the claimants deemed right of occupancy over and in the said land was not revoked and the said right of occupancy is still existing and subsisting.

* That the act of Shell in obtaining clandestinely the certificate of occupancy over the claimants land, constituted a challenge or denial of the title of the claimants as landlords of Shell and for which challenge, Shell has forfeited its right as a tenant in respect of the said land.

The court also set aside the certificate of occupancy and further ordered Shell to forfeit  the land, the subject matter of the suit.

Setting aside the C of O, the court had said, the lower court had said, “Shell is ordered to forfeit it’s right as a tenant under the 1958 Deed of lease for the direct denial of it’s landlords title by setting up a rival title; the Certificate of Occupancy which is now a replacement for the 1958 lease agreement.”

The court had earlier formulated six questions for determination, whether the claimants, leased the said land to Shell; whether Shell applied for and obtained a certificate of occupancy with respect to the land leased to them by the claimants; whether Shell sough the consent of the claimants before applying for the said certificate of occupancy; whether the claimants are entitled to order of forfeiture and whether Shell was entitled to the counter claim sought the in the suit.

According to the lower court, “from all the processes before me, it is not in dispute that the claimants families are original owners of the land lying and being between Finima and Bonny in the Bonny local government area of River State.

While the claimants are saying that Shell obtained secretly from River State government, the certificate of occupancy without their knowledge and consent, Shell is saying that it informed the claimants before applying for the said certificate of occupancy”.

The court further said, “in some parts of Nigeria, like where this court is located, a purchaser of land is like one marrying a wife from a family under Native law and custom.

This shows how precarious land is in Nigeria. Bearing in mind the importance of land to native communities, the land Use Act provided for owners of land before the Act came into force to be regarded as deemed holders of right of occupancy over the land”.

According to the court, “the rights and interest of the claimants and that of Shell as landlords and tenants remained intact and were recognised by section 36(4) of the Act until the Governor of the state, following due process of law revokes the right of occupancy granted to the holder.

On the strength of decided authorities and the Act itself, I do not think that a tenant/leaser in the instant case, Shell can translate into a holder by virtue only of the customary agreement of 1958 since Shell is not the owner of the land or landlord or lessor.

I also do not think the Act intended a reversal of status where a tenant becomes a landlord. If that is the case, what does the landlord becomes?”

“The action of Shell in surreptitiously applying for and obtaining a certificate of occupancy over the land of its landlord covered by the deed of lease of 1958 without the knowledge and consent of its landlord, and without publication and payment of compensation by River state government,  that issued the said certificate of occupancy is a clear case of setting up adverse title to an existing right on the land.

This action of Shell not only smacks of malice but greed and therefore not worthy of any form of sympathetic consideration.”

“Accordingly, I feel no hesitation whatsoever in setting aside the said certificate of occupancy for being unconstitutional, null, void and of no effect.

The law remains that a right of occupancy whether statutory or customary creates priority of estate so as to render null and void any subsequent certificate of occupancy issued in respect of the same parcel of land unless the right of occupancy is validly revoked by the appropriate authority before the issuance of a certificate of occupancy in respect of that same parcel of land to another person”, the lower court had held.