Zenon Petroleum and Gas Limited has won an arbitration case instituted by Ignite Investment Limited in the London Court of International Arbitration (LCIA) over the share purchase agreement (SPA) reached on the sale of Forte Oil Plc to the latter.
Zenon Petroleum was awarded $19.2 million by the LCIA in a judgment delivered on October 7, according to a statement seen by BusinessDay.
The statement said the tribunal ruled in favour of Zenon in three out of the four claims and ordered that Ignite make the SPA payments less the amount awarded for one of the claims.
“With the award in favour of Zenon, it was expected that all due payments would be made by Ignite in compliance with the award,” it added.
In June 2019, Zenon Petroleum completed the sale of 74.02 percent shares of Forte Oil to Ignite Investments.
Thereafter, Ignite triggered a dispute notice via a letter dated June 17, 2020, wherein the company had alleged claims for a breach of warranty relating to the SPA executed on December 20, 2018.
The dispute notice had alleged that Zenon breached certain warranties under the SPA, in consequence of which, the purchaser made the relevant claims against Zenon.
According to reports, the parties agreed to meet with the intention to find a solution to the alleged claims by Ignite in line with the SPA. This was not successful, following which Ignite filed a claim at the LCIA on December 18, 2020.
Zenon then filed its response to the claim and counter-claimed against Ignite.
A tribunal was then appointed by the LCIA consisting of three arbitrators, namely Messrs Alain Choo Choy QC (Presiding Arbitrator), Oba Nsugbe QC SAN and Segun Osuntokun.
The tribunal held the hearing of the matter on the 6th to the 9th of December, 2021, wherein all parties presented their case and cross-examined individual witnesses from both parties.
The tribunal then informed all parties that its decision would be given in May 2022. However, due to the large caseload of the tribunal members, the judgement of the panel was delayed beyond the earlier stated date of May 2022.
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“With the award in favour of Zenon, it is expected that all due payments will be made by Ignite in compliance with the award,” the statement said.
BusinessDay had reported that Zenon Petroleum had asked a Federal High Court in Lagos to wind up Prudent Energy and Services Limited, which was the parent company of Ardova Plc over the inability of the company to pay $6 million.
AbdulWasiu Sowami is the Chief Executive Officer of Prudent Energy and Services.
In the suit at the Federal High Court, Lagos, with No. FHC/L/CP/1450/2022, the debt was then alleged to have arisen from the sale conducted in 2018, where Zenon Petroleum & Gas and its affiliates had sold 74.02 per cent of the issued share capital of Forte Oil (now Ardova Plc) to Sowami and Ignite Investment.
It had stated that as security for the deferred consideration for the sale of the shares, Prudent Energy and Services and Sowami had provided a guarantee in favour of Zenon Petroleum & Gas and its affiliates for the prompt payment of the deferred consideration as at when due.
In the petition, Zenon Petroleum & Gas had alleged that the sum of $6 million being part of the deferred consideration became due on June 18, 2022, and despite the demand letters served on Prudent Energy and Services and its CEO, the debt was not paid.
Zenon Petroleum & Gas had therefore urged the court to wind up Prudent Energy and Services on the ground of its inability to pay its debts.
