By Babajide Okeowo( Content Editor, The New Diplomat)
After three days of virtual hearings in the ongoing criminal trial and a parallel civil claim brought by Nigeria over the controversial OPL 245 oil block license, the world waits with bated breath on where the pendulum will swing when Justice Butcher rules in the case which has become known as the Malabu scandal.
Justice Butcher of the English High Court at the close of proceedings had asked for hard copies of authorities and transcripts from the hearing while reserving his judgement for a later date.
Two oil giants, Eni and Shell, have argued to stop or stay proceedings in a $1 billion lawsuit brought by the Federal Republic of Nigeria (FRN).
The defendants – Eni, Shell, and others – had asked the court to decline jurisdiction under article 29 of the recast Brussels Regulation, as the Italian case against the companies is still ongoing.
Nigeria on her part wanted the April court date postponed until January 2021, when a connected criminal case in Milan is expected to have concluded.
The oil companies and former and current executives face corruption charges linked to the Malabu scandal, a 2011 deal involving a Nigerian oil block known as OPL 245. Officials affected in the scandal have denied wrongdoing.
Between Tuesday and Thursday, parties in the lawsuit presented their arguments in the court. FRN’s barrister, Roger Masefield, responding to the allegation by Shell that they did not make full and frank disclosure, argued that Shell’s serious allegation is in danger of “Island hopping”, skipping over the FRN’s submission without context.
He agreed that the Italian and UK cases have the same basic facts and issues but the juridical basis is different. Italian law works differently through vicarious liability for companies responsible for individuals who are found to have to have broken the law.
Masefield says that the objects of the proceedings are different – they have different ends in view. In Italy, Nigeria can only ask for monetary damages, while in the English case they are asking for the OPL 245 deal to be rescinded.
In a bid to stop the trial from going on, Richard Handyside, acting for Eni had outlined the similarities between the Italian criminal charges and a civil claim based on international bribery charges and the English claim based on allegations of bribery, dishonest assistance, and conspiracy.
The Eni’s lawyer noted that the companies have made no profit on the deal as “the FRN has declined to grant a mining license” without which no oil can be produced and no profits made. He argued further that the FRN has brought two duplicative claims in Italy and England within months of each other and that the FRN acknowledged that they might have to choose between them down the road. They were hoping to have a “one-way bet,” according to Eni.
Afterward, Shell’s lawyer took over and denied wrongdoing in all allegations leveled against the company. The oil giant argued further that FRN’s lawyers’ statement that the facts of the case became apparent after the Italian case was wrong and that they failed to explain what Nigerian law enforcement agents at the EFCC found.
On Wednesday when the virtual hearing resumed and, speaking on behalf of Shell, Peter Goldsmith argued that the FRN failed to bring the contents of two 2012 reports by the Economic and Financial Crime Commission (EFCC) to the attention of the judge who oversaw their application.
Mr. Goldsmith explained that Nigeria has not presented evidence of what it knew about the EFCC 2012 reports. Shell is alleging that the FRN failed to give Justice Cockerill full and frank disclosure when she was asked to give them permission to serve out of jurisdiction.
Shell argued that the FRN should have fairly presented the potential defense and evidence that the FRN did know about wrongdoing earlier.
The lawyer, on behalf of Shell, claimed that the FRN seriously misled Justice Cockerill by saying that evidence of alleged wrongdoing in the OPL 245 did not become apparent until it came out of the Italian investigation. According to him, it took many weeks of chasing for the FRN to disclose the EFCC reports with little explanation of why the FRN failed to inquire into the existence of these reports earlier, adding that responses to Shell’s letters on the EFCC report were “evasive”.
Goldsmith explained that the EFCC investigation was initially triggered by a complaint made by people claiming to be shareholders of Malabu Oil and Gas but the investigation went much wider, identifying that Malabu made payments to companies controlled by Aliyu Abubakar. He claimed that the FRN’s point that the scheme “only started to emerge” with the Italian investigation is not true, adding that they should have recognized that what the court was told was false because the FRN had not told its lawyers what the EFCC investigations had discovered.
The controversial Malabu deal was struck in 2011 under former President Goodluck Jonathan. The arrangement saw the Nigerian government stand as a negotiator in the controversial sale of the oil block in offshore Nigerian waters.
Two international oil firms, Shell and Eni, paid out about $1.1 billion to Nigerian government accounts in the UK which then transferred most of the money to Malabu, a company then allegedly controlled by Nigeria’s former petroleum minister, Dan Etete.
It was Mr. Dan Etete’s Malabu that allegedly transferred the over $500 million to accounts controlled by Abubakar Aiyu, who is also being prosecuted in Nigeria for his role in the scandal.
The payout immediately became a subject of cross-border investigation spanning over six countries. Several Nigerian government officials were believed to have received several millions of dollars in bribes for the enabling roles they played.
A larger trial including Shell, Eni, and 13 other defendants is ongoing in Italy.
The London claim centers on the licensing rights for OPL 245 block, for which the oil majors purchased extraction rights in 2011. It is alleged that most of the $1.1 billion was used for bribes and kickbacks to Nigerian government officials.