Former Attorney-General of the Federation, Adoke
…Drags AGF to court
Former Attorney-General of the Federation, AGF, and Minister of Justice, Mohammed Bello Adoke, has stated that his role in the settlement of the dispute between the Federal Government and Malabu oil, following the revocation of the OPL 245 oil block, was that of a facilitator to arrive at an amicable settlement between the contending parties.
Adoke in a suit filed at the Federal High Court, Abuja challenging his prosecution by the Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN, said his action in effecting the settlement of the dispute was motivated by the need to avoid a colossal cost to the Federal Government as awarded by the courts.
He stated that the Terms of Settlement upon which the Consent Judgment was predicated was executed as far back as November 30, 2006, to amicably settle Suit No. FHC/ABJ/CS/ 420/2003 and Appeal No: CA/A/99/M/06 brought by Malabu Oil and Gas Limited as Plaintiff/Appellants against the President and Commander-in-Chief, Federal Republic of Nigeria; the Federal Government of Nigeria; the Nigerian National Petroleum Corporation; the Ministry of Petroleum Resources; the Department of Petroleum Resources and Attorney General of the Federation as Defendants /Respondents.
According to an affidavit in support of the originating summons deposed to by Oladapo Agboola of the law firm of Ade Okeaya-Ineh & Co, Adoke’s solicitors, “the role played by the Plaintiff as Minister of the government of the federation, acting on the directives and approvals of the President, was that of a facilitator of an amicable settlement between two disputing parties over a long standing dispute with obvious economic implications for the country.”
The plaintiff averred further that the decision to implement the terms of settlement was “largely informed by the magnitude of claims against the FGN arising from the allocation of OPL 245 to Malabu; the revocation of the block in a less than transparent manner and the subsequent re-award of the same block to Shell/NNPC under a Production Sharing Arrangement; the substantial de-risking of Block 245 by Shell Nigeria Ultra Deep Limited (SNUD) with the knowledge and approval of the FGN, and the need to prevent the International Centre for the Settlement of Investment Disputes (ICSID) Arbitration initiated by SNUD from progressing to conclusion, in view of its obvious negative consequences for the country.”
It added that the entire involvement and role played by Adoke in the settlement process and implementation was in furtherance of the directives and approvals of ex-President Goodluck Jonathan in the exercise of his executive powers as enshrined in the 1999 Constitution of the Federal Republic of Nigeria.
It stated that at all times material, the Adoke carried out the Presidential directives “diligently, faithfully, impartially and in good faith and without any personal gain to himself nor to any other person except as was agreed to by the known parties to the dispute.
“That the plaintiff (Adoke) verily believes that he did not exceed the directives/approval given to him by the President and did nothing wrong to warrant his prosecution on account of the implementation of the Settlement Agreement.”
The Ex-Minister through the suit has urged the Court to determine two issues – namely, 1: “Whether by the combined interpretation of Section 5(1), 147(1), and 148(1) and 150(1) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), the executive powers of the President are legally exercisable by him directly or through Ministers of the Government of the Federation.
And 2: “Whether the Plaintiff as a Minister in the Government of the Federation could be held personally liable for acts done in furtherance of the lawful directives/approvals of the President in the exercise of the President’s executive powers vested in him by section 5(1) of the Constitution of the Federal Republic of Nigeria 1999 as amended.”
Adoke told the court that although, Malabu was issued a licence for Block 245 on 9th April 2001, the Federal Government subsequently revoked the licence on 2nd July 2001.
He said that following the revocation, Exxon-Mobil and Shell were then invited in April 2002 to bid for the same OPL 245 as contractors on a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC), despite the existence of subsisting contractual agreements between Malabu and SNUD with respect to OPL 245.
He said: “Dissatisfied with the revocation, Malabu contended among other things that the circumstances leading to the revocation of its licence on Block 245 was less than transparent and smacked of inducement and Connivance from SNUD, which at the material time was its technical partner. It was also contended by Malabu that the subsequent re-award of OPL 245 to SNUD by the FGN was done under questionable circumstances.
“That Malabu then petitioned the House of Representatives Committee on Petroleum to look into the matter and the House of Representatives Committee on Petroleum found no rationalbasis for the revocation and reprimanded Shell for its complicity. The Committee also directed the Federal Government to withdraw the re-award, it made to Shell and return OPL 245 to Malabu, the original allotee of the Block.
“That in addition to its recourse to the House of Representatives Committee on Petroleum, Malabu also instituted Suit No. FHC/ABJ/Cs/420/2003 before the Federal High Court (FHC), Abuja against the Federal Government of Nigeria to enforce its claim to OPL 245.
“That although, the suit was struck out by the FHC, Malahu proceeded to lodge Appeal No. CA/A/99M/2006, before the Court of Appeal, Abuja, Division in 2006 and that it was during the pendency of the Appeal that Exhibit 2 hereof was executed as a consideration for withdrawal of the Appeal by Malabu.
“That consequent upon Exhibit 2, the then Minister of State for Petroleum, Dr. Edmund Daukoru, communicated the restoration of the OPL 245 to Malabu vide letter dated 2nd December 2006.The said letter is hereto attached and marked Exhibit 3.
“That following Exhibit 3, Malabu was expected to pay the new signature bonus in the sum of US$210,000,000 less the $2,000,000,00 it had previously paid. Malabu accordingly released the FGN from liability on account of the actions taken in respect OPL 245.
“That SNUD, dissatisfied with the Exhibits 2 and 3 between the FGN and Malabu, commenced arbitral proceedings against the decision of the FGN to restore/re-allocate OPL 245 to Malabu at the International Centre for the Settlement of Investment Disputes (ICSID) in Washington DC, and made representations to government on the impending arbitration. It also commenced a suit against the FGN before the Federal High Court, Abuja.
“That based on the allocation of OPL 245 to SNUD in 2002, it entered into a Production Sharing Contract (PSCJ with the NNPC in 2003 and proceeded to pay $1million US Dollars out of the $210 Million US Dollars signature bonus to the Federal Government and kept the balance of US$209 Million Dollars in an Escrow Account with J.P. Morgan (which it jointly managed with the FGN) pending the resolution of the dispute between Malabu and the FGN.
“That SNUD therefore claimed compensation and damages in excess of US$ 2 Billion Dollars from the FGN on account of the revocation of OPL 245, and the subsequent reallocation to Malabu and relied on the expenditure it incurred under the PSC with NNPC,” he said.
Adoke, averred that the above scenario created a state of quandary that lingered for a while and troubled successive administrations in an attempt to settle same.
He stated that from the exchange of letters between the Presidency, Ministry of Petroleum Resources, SNUD and Malabu, several meetings were held between the FGN and SNUD to resolve the dispute, sequel to which a middle course solution to the dispute whereby the interests of SNUD, Malabu and NNPC would be accommodated on OPL 245 to the extent that SNUD would be the Contractor-Operator, NNPC and Malabu would be the Concessionaire Equity Right and Concessionaire Equity Interests respectively.
He noted that while SNUD was comfortable with the above arrangement; Malabu contended that the solution failed to take cognizance of its ownership rights over OPL 245 and further asserted that the proposed solution amounted to a unilateral imposition of the Back-in regime, which did not apply in the circumstance.
He said: “Malabu contended strongly that SNUD was not in a position to insist that it must be the Contractor on OPL 245 and canvassed the full implementation of the terms of settlement that were already reduced to Orders of the Court.
The affidavit reads in part: “That to reconcile these conflicting positions, the then Honourable Minister of State, Petroleum Resources, by a letter dated 11th May 2007 to President Olusegun Obasanjo, GCFR, proposed that a Committee made up of himself, the Attorney General of the Federation, Minister of Energy, GMD-NNPC, DPR and external solicitors serving as resource persons be constituted to enter into settlement negotiations with the affected companies.
“However, there is no indication on the records that the Committee was able to arrive at any satisfactory outcome before President Umaru Musa Yar’Adua, GCFR, was sworn in as President on 29th May 2007.
“That from the records available to the Plaintiff, between 2007 and 2010 when the administration of President Umaru Musa Yar’adua GCFR was in power, no satisfactory outcome was achieved in the lingering dispute as the arbitral proceedings initiated by SNUD before ICSID were still progressing. This remained the position until the demise of President Umaru Yar’ Adua GCFR in 2010.
“That when President Goodluck Ebele Jonathan, GCFR assumed office as President in 2010, Malabu again petitioned the Federal Government to implement Exhibit 2 hereof on the basis of which they had discontinued their Appeal.
“That the FGN in considering Exhibit 6 took cognisance of the pending cases instituted by SNUD against FGN and/or Malabu, including the Bilateral Investment Treaty (BIT) arbitration No. ARB/ 07/18 pending at the International Centre for the Settlement of Investment Disputes (ICSID Arbitration- Exhibit 4 hereof) to enforce SNUD’s rights to exclusively operate Block 245 as Contractor on the basis of the 2003 Production Sharing Contract (PSC) between NNPC and SNUD, anti the financial implications of defending these actions on the public purse and opted for amicable resolution of the dispute.
He said in order to resolve all the contending claims in a satisfactory and holistic manner, due regard was given to the Terms of Settlement of 30th November 2006 which had been adopted as a Consent judgment of the Federal High Court, Abuja.
He stated that to accommodate all the competing interests, a Block 245 Malabu Resolution Agreement dated 29th April, 2011 between the Federal Government of Nigeria and Malabu Oil & Gas Limited was executed wherein the FGN agreed to resolve all the issues with Malabu in respect of Block 245 amicably and Malabu also agreed that in consideration of receiving compensation from the FGN, it would settle and waive any and all claims to any interest in OPL 245.
He noted that similarly, Block 245 SNUD Resolution Agreement was executed between the FGN and SNUD on 29th April 2011 wherein SNUD also agreed to withdraw and wholly discontinue all pending suits/arbitration in respect of Block 245.
He explained that in furtherance of the Resolution Agreement, SNUD and ENI agreed to pay Malabu through the Federal Government, acting as an obligor, the sum of US$ 1,092,040,000 Billion Dollars as full and final settlement of any and all claims, interests or rights relating to or in connection with Block 245 and Malabu agreed to settle and waive any and all claims, interests or rights relating to or in connection with Block 245 and also consented to the re-allocation of Block 245 to Nigerian Agip Exploration Limited (NAEJ) and Shell Nigeria Exploration and Production Company Limited (SNEPCOJ).
He stated that Malabu had petitioned President Jonathan on 3rd June 2013 demanding payment of the sum of US$ 1,092,040,000 Billion Dollars being the sum due payable to them under the Resolution Agreement in response to which the president approved on 17th June 2013.
He said: “The Presidential approval directing that Malabu be paid the sum of US$ 1,092,040,000 Billion Dollars from the Escrow Account with J.P. Morgan and Malabu’s petition dated 3rd June 2013 is hereby attached and marked Exhibits 10A & 10B respectively.
“That the execution of Block 245 Resolution Agreement was necessary to give full effect to the amicable settlement involving all the relevant parties to the dispute over Block 245 and to bring to an end, the lingering dispute over the Block,” he said.
The affidavit noted, the role played by the Federal Government, its agencies and officials including the Plaintiff (Adoke), the Minister of Petroleum Resources, the Minister of Finance and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) in relation to the implementation of Block 245 Settlement Agreement was in line with that of a facilitator for the resolution of a long standing dispute between Malabu and SNUD over the ownership and right to operate Block 245.
It said: “That the plaintiffs role as a Minister in the Government of the Federation in the implementation of the Settlement Agreement dated 30th November 2006; the negotiation and execution of Exhibits 7, 8 & 9 and all ancillary processes was in line with the Presidential approval contained in Exhibit 1.
“To this end, all the relevant Ministers and Heads of Corporations such as the Minister of Petroleum Resources, the Minister of Finance, the Group Managing Director of the NNPC were involved in giving effect to the presidential directives/approvals.
“That at all times material to the resolution of the dispute, the Federal Government was not aware of any subsisting third party interest in Malabu’s claim to OPL 245 neither did any person or company apply to be joined in the negotiations as an interested party until the resolution of the dispute was concluded.
“That following the conclusion and execution, the FGN instructed J.P. Morgan to pay Malabu the sum of US$ 1,092,040,000 (One Billion, Ninety Two Million and Forty Thousand US Dollars).
“That it was at this stage that the FGN became aware of the claims of (I) Energy Venture Partners Limited (a British Virgin Island Company which sued Malabu for the sum of US$ 200,000,000 (Two Hundred Million US Dollars) together with damages and cost of IJS $15, 000,000 (Fifteen million Us Dollars); and (ii) International Legal Consulting Limited (a Russian company), which commenced an Arbitration proceedings against Malabu at the London Court of International Arbitration suing for US$ 75,000,000(Seventy-Five Million US Dollars).
“That the Escrow Agent – J.P Morgan Chase – had pursuant to aforementioned claims paid the sum of US$ 215, 000,000 into the High Court of Justice England and also retained US$75,000,000 to await the outcome of the litigation thereby releasing the balance of US$801,540,000 to Malabu’sBankers in Nigeria. The Plaintiffs instructions to J.P. Morgan were to ensure compliance with the Orders of the High Court of Justice in England.
“That when the FGN was informed that the litigation/arbitration were resolved in favour of Malabu and the court had lifted the freezing orders, the Federal Ministry of Finance was accordingly advised by the Office of the Attorney General of the Federation to instruct the escrow agent to release the US$ 75,000,000 that was retained on account of the freezing order to Malabu in fulfilment of FGN’s obligations under the Resolution Agreement.
“The Consent Order of the High Court of Justice, Queens Bench Division, Commercial Court dated 7th May 2013 on the strength of which the Ministry of Finance was advised to instruct the escrow agent to pay Malabu the sum of US$ 75,000,000.00 retained pursuant to a freezing order is hereto attached.
“That in addition to the above claim, the FGN also became aware for the first time of the claim of Pecos Energy Limited and Mohammed Sani (aka, Mohammed Sani Abacha) vide a letter dated 20th January 2012 from A.A. Umar & Co, the Solicitors retained by them.
“They asserted through their Solicitors that Dan Etete had without their knowledge, disposed of their interests in OPL 245 to SNUD, NAE and SNEPCO for the sum of US$ 1.3 Billion Dollars.
“The Solicitors called on the Plaintiff to intervene and call a meeting of all the disputing parties with a view to achieving a just and amicable settlement or else they would take legal action to enforce the rights of their clients.
“That the plaintiff as Minister of the Government of the Federation had at all times material to the resolution of the dispute maintained the position that he was only implementing the Terms of Settlement dated 30th November 2006 between Malabu and the FGN over the ownership/right to operate OPL 245 and that records show that only Malabu was a party to the suits/arbitral proceedings instituted by the contending parties.
“That the Plaintiff as a Minister of the Government of the federation implemented the directives of the President and referred all claims for competing interests in Malabu to the company for resolution as an internal matter of the Company.
“That the Abacha family and associated companies were apparently dissatisfied with this position and petitioned the House of Representatives. The House of Representatives Ad-Hoc Committee Public Investigative Hearing In respect of ‘The Transaction Involving the Federal Government and Shell/Agip Companies, and Malabu Oil and Gas Limited in respect of Oil Bloc OPL 245’ vide letter dated 28th June 20l2 informed the Office of the Attorney General of the Federation of its resolve to investigate the transaction.
“That in response to the invitation, the Plaintiff promptly forwarded the requested documents to the Ad-Hoc Committee on 13th July 2012. The forwarding letter to the Ad-Hoc Committee is hereto attached and marked Exhibit l8.
“That the Plaintiff also appeared before the Ad-Hoc Committee on the 7th of December 2012 and adopted the Comprehensive Position Paper already circulated to Members and answered all the questions that were put to him by Committee members to clarify issues that they had wanted him to further elucidate upon.
“That all the agencies and officers of the FGN including the plaintiff in his capacity as a Minister of the Government of the federation, the Minister of Petroleum Resources, the Minister of finance, the Group Managing Director of NNPC, that were involved in the transaction were merely implementing the Terms of Settlement entered into by Malabu and the FGN as far back as 30th November 2006 as directed by President Goodluck Ebele Jonathan GCFR.”
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