Chevron divestment: Legal battle shifts to Appeal Court

A Federal High Court sitting in Ikoyi, Lagos has adjourned a suit instituted by Brittania-U Nigeria Limited challenging the award of Oil Mining Leases (OML) 52, 53 and 55 by Chevron Nigeria Limited to Seplat Petroleum Development Company Limited to enable the Court of Appeal, Lagos division, deliberate on the matter of jurisdiction.

Britannia-U Nigeria Limited had through its lawyer, Ricky Tarfa (SAN), also joined as defendants, Chevron USA Inc, BNP Parbas Securities Corp, Hermant Petel and Seplat Petroleum Development Company Limited.

Justice Yinusa Mohammed of the Federal High Court, Ikoyi, Lagos, on Friday adjourned the suit sine die (till further notice) following appeal filed by Chevron Petroleum, challenging the jurisdiction of the Federal High Court to adjudicate on the matter.

Justice Mohammed had in a ruling delivered on May 23, 2014 assumed jurisdiction to arbitrate on the matter. At the resumed hearing of the matter, Etigwe Uwa (SAN), counsel to the 5th defendant (Seplat Petroleum), informed that his client had appealed against the decision over the issue of jurisdiction.

He submitted that the notice of appeal, as well as an application seeking stay of proceedings in the matter, was already before the court. He urged the court to adjourn the matter, to enable the appellate court rule on it.

Also, A. O. Ayodeji, counsel to Chevron Limited, informed the court that an appeal had been lodged before the Court of Appeal, and urged the court to stay further proceedings, pending in the decision of the court on the issue of jurisdiction.

In his response, Ricky Tarfa (SAN), counsel to Britannia-U, did not object to the application seeking for stay of proceedings. He submitted that since an appeal had been filed, it would be in the interest of justice to allow the appellate court rule on it.

Consequently, Justice Mohammed, in a bench ruling, adjourned the matter indefinitely, pending the ruling of the Court of Appeal in the suit. The plaintiff (Britannia-U Nigeria Limited) had approached the court, seeking a declaration that the final bidding offer of $1,015,000,000.00 for acquisition of 40 percent participating interest of Chevron Nigeria, in oil mining leases 52, 53 and 55 had been accepted by the first defendant.

In its statement of claim, the plaintiff stated that the second defendant (Chevron USA) requested Britannia-U to provide a firm board commitment letter issued by the plaintiff’s bankers for payment of the balance of $765 million which was complied with.

The plaintiff added that its bankers directly paid the money to the second defendant (Chevron Corp) at their Houston office on November 15, 2013 arguing that, with that, it followed that the parties had entered into binding contract for the acquisition of the OMLs 52, 53 and 55.

The plaintiff prayed the court to hold that its revised bid of US$1, 015, 000, 000.00 for acquisition of the 40% participating interest of Chevron Nigeria Limited in Oil Mining Leases 52, 53 and 55 was binding and subsisting.

The plaintiff added that by provision of the irrevocable stand by letter of credit for the sum of $250 million, representing 15% of the company’s initial bid price of $1.667 billion, opened in favour of the first/second defendants on September 30, 2013 remain in force.