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Aiteo Eastern Exploration and Production Company Limited has instituted a legal action against Shell Petroleum Development Company of Nigeria, seeking over $2.5 billion compensation over the sales of Oil Mining Licence 29.
In the suit suit marked, FHC/ABJ/C8/738/2021, and dated July 27, 2021, Aiteo is accusing Shell of selling two Marginal Fields – Kugbo West and Okiori, to it, when it knew or ought to have known that the defendant had handed over the wells to the Federal Government/Nigerian National Petroleum Corporation (NNPC), for which the defendant received valuable consideration, in or about 2009, prior to the agreement for assignment.
In the suit filed by its counsel, Kemi Pinheiro, SAN, Aiteo claimed that the defendant breached a fundamental term of the agreement for assignment dated October 17, 2014, as set out in schedule 1 part 3 – wells, in relation to the Kugbo West and Okiori oil wells listed in schedule 1 of the agreement for assignment.
The plaintiff further claimed it joined others to bid for OML 29 and emerged successful.
According to the plaintiff, the said re-conveyance of the wells was done (ostensibly by way of offsetting the defendant’s incurred liabilities to the NNPC, under the JOA operated by the defendant, adding that the wells were then offered to prospective buyers during the just concluded 2020 bid round conducted by the Department of Petroleum Resources.
It also averred that its inability to fully repay its alleged indebtedness to its financiers was directly attributed to the wrongful actions of Shell. While claiming that it paid $46.2 million for the wells, plaintiff argued if the money had been invested in other business ventures at the rate of 9.9 percent interest rate per annum from 2014 till the commencement of the suit, it would have yielded an additional $52 million.
Plaintiff, therefore, claimed that it is entitled to a refund of $99 million. It also argued that although by clause 25 of the agreement, disputes emanating from the said agreement ought to be resolved through arbitration, but since the fraudulent misrepresentation of the defendant goes to the root of the agreement to the sales of the wells, it can not be entertained or determined by an arbitration tribunal.
It is praying the court to order Shell to refund him $46.2 million as payment attributable to Kugbo West and Okiori oil wells, and received for a consideration which had totally failed.
