Chevron assets: Did the Supreme Court rule against any party?

On Tuesday, February 24, 2015, Hon. Justice Fabiyi of the Supreme Court of Nigeria presided over a request by Rickey Tarfa, SAN, advocate to Brittania U, seeking the apex court to grant an interlocutory injunction requesting Chevron to stay action on the transfer of assets OML 52, 53 and 55 to Amni, Seplat and Belema Oil, respectively.

Making his introductory remarks, the Hon. Justice Fabiyi told the counsels representing Seplat and Brittania U to as senior members of the bar advise their clients on the need to respect the authority of the court as the case was ripe for hearing and not take any action that would over reach the case.

Since that remark was made, the papers have been filled with different interpretations depending on which side of the divide the report is tilted towards.

A respected legal practitioner has however cast some light on the justice’s remarks. “The justice has not reprimanded any of the parties nor requested that the transaction be stopped. What he has done is to ask the counsels to prevail on their clients to abide by the letters of the law.”

To understand how the Brittania and Chevron/Seplat got to the Supreme Court, it is imperative to track the trajectory of the case.

In August 2013, Chevron put up 3 acreages for sale. They were OMLs 52, 53 and 55. In putting up the bid, Chevron had announced its intention of selling the three OMLs to one preferred bidder not necessarily the highest bidder.

After the first bid round, 30 bidders emerged. Chevron made a short list and when the sealed bids were opened, Britannia U had bid $1.6 billion which the company later revised her bid to $1.015 billion.

The Seplat Consortium was declared the preferred bidder with a bid of $800 million and signed an SPA on November 28, 2014. The Seplat Consortium was comprised of Seplat and Amni with Belema joining the consortium subsequently.

Brittania U was however insistent that Chevron should declare it bid winner and sought an injunction restraining Chevron from concluding the sale to the Seplat Consortium.

The company approached a Federal High Court sitting in Lagos, which granted an interlocutory injunction and further granted an extension while the issue of jurisdiction was pending.

Following the extension of the injunction, Seplat and its consortium partners went to the Appeal Court on June 20, 2014, to challenge the High Court’s injunction. The Appeal Court ruled in Seplat’s favour and vacated the injunction reasoning that the life of the interim order could not be extended, while the jurisdiction of the Federal High Court was being challenged.

Not satisfied with the Appeal Court’s ruling, Brittania U went to the Supreme Court to contest the appeal.

In the interregnum, Chevron and the Seplat Consortium continued with their efforts to obtain Ministerial Consent for the transaction since the injunction was no longer in effect.

The minister’s consent was granted and on February 5, 2015, Seplat announced that it had completed the process of acquiring 40 percent interest in OML 53 with NNPC holding 60 percent. Seplat was named as operator following Ministerial Consent. Seplat also acquired 56.25 percent equity interest in Belema to provide financial and technical support to this entity.

Speaking on the conclusion of the transaction, Austin Avuru, CEO of Seplat, said his company had “broken no rules. It is unthinkable that a corporate entity like Seplat that prides itself with corporate governance and due process will do anything that offends the laws of this country. It is unthinkable; we will not do that. We went through a process, a very rigorous process of bidding for an asset, almost two years ago from Chevron and as far back as November 2013, we signed an SPA (Sales and Purchase Agreement) with Chevron as part of that process and then, the court case came in where we were joined, and certain elements of the court case and certain injunction stopped the process from running its course.

“Running its course means after signing an SPA, you are supposed to seek ministerial approval and at the end of when you get ministerial approval, then the transaction is concluded. So, all that we have done recently is to run the full course of what we started by signing an SPA in November 2013. We ran the full course and got, you know, the ministerial approval, concluded the transaction with Chevron and I said earlier, we broke no laws, whatsoever.”

Brittania U has yet to make a formal statement but a day after the consummation of the deal was announced its CEO, Uju Ifejika, spoke to Africa Oil and Gas by phone from Paris. The paper reports her as saying that “it is wrong “for the minister to grant consent to the transaction as it is still a subject of litigation in court. The matter is subjudice and Chevron, a multinational oil company, should know better than to go through with this.”

As things stand, only the Supreme Court which has expressed its willingness to hear the substantive appeal, instead of listening to arguments on a motion for injunction, can determine what the next step will be.

As the gladiators await a new date for the hearing from the registrars of the Supreme Court, the case seems to have shifted to the court of public opinion and it has assumed a David vs Goliath colouration, but only time and the justices of the Supreme will determine who is right and who is wrong.

One thing is clear, the transaction has not been stopped until the case is properly adjudged in the court of law in what hopefully should be in the very near future.

PATRICK ATUANYA