Court restrains Shell, Total and Agip from further arbitration proceedings against Crestar, London

The Court of Appeal, Lagos Division on Monday made an Order of Injunction restraining the Shell Petroleum Development Company of Nigeria Limited, Total E&P Limited and Nigerian Agip Oil Company Limited (The Shell JV) from taking further steps in the arbitration proceedings commenced against Crestar Integrated Natural Resources Limited (Crestar) in London in respect of the dispute between the parties over the agreement by the Shell JV to assign their participating interests in Oil Mining Lease 25 to Crestar for $453,000,000.

Crestar had brought an Application at the Court of Appeal seeking an injunction to restrain the Shell JV from taking further steps in respect of the arbitration commenced by the Shell JV in London in respect of the dispute between the parties. Counsel to Crestar, Mr Tayo Oyetibo SAN had argued that the continuation of the London arbitration would be prejudicial to the appeal pending before the Court of Appeal in which Crestar had filed a Respondent’s Notice where it challenged the legality and enforceability of the arbitration clause pursuant to which the arbitration in London was commenced.

In response to the Application, the Shell’s lawyer, Tunde Fagbohunlu SAN argued that by virtue of section 34 of the Arbitration and Conciliation Act (the ACA) the court did not have jurisdiction to make the Order of injunction.

However, in its ruling, the Court held that it had the jurisdiction to make the Order of injunction to restrain the Shell JV from further proceeding with the arbitration in London because the provisions of section 34 of the ACA does not apply to oust the statutory jurisdiction of the court to make Orders of injunction where it is just and convenient to do so