JPMorgan Chase has won a major legal battle against Nigeria, which was seeking $1.7 billion (about N713,150,000,000 according to Tuesday’s rate checked by The New Diplomat) in damages over the role of the financial institution in a disputed 2011 oilfield deal.
According to news agency, the case was decided on Tuesday by a High Court in London.
While the Nigerian government said it was disappointed and would review the judgment carefully before considering its next steps, JPMorgan, a U.S bank said the judgment reflected its commitment to acting with high professional standards everywhere it operates.
The case which was heard earlier this year was in relation with the purchase of Nigeria’s OPL 245 offshore oilfield by Shell (SHEL.L) and Eni (ENI.MI).
Nigeria had alleged JPMorgan was “grossly negligent” in its transfer of funds paid by the energy majors to a company linked to the country’s disgraced former oil minister Dan Etete, as per instructions received from Nigerian government officials.
Nigeria now says those officials were party to a fraudulent scheme.
According to Nigeria’s legal argument, the transactions put JPMorgan in breach of its Quincecare duty, which obliges banks to disregard a customer’s instructions if following those instructions might facilitate a fraud against that customer.
JP Morgan rejected the legal argument, putting the emphasis on its primary duty to comply promptly with payment instructions from its customer, and also contested some of the factual elements put forward by Nigeria.
London High Court Judge Sara Cockerill said in a 137-page ruling issued on Tuesday that no Quincecare breach had occurred.
JPMorgan said the outcome reflected “how we are prepared to robustly defend our actions and reputation when they are called into question”.
The Nigerian government said it would continue its fight against fraud and corruption and work to recover funds for the people of Nigeria.
Campaign group Spotlight on Corruption described the ruling as “a huge setback in the fight against corruption”, saying it gave a “free pass” to banks who ignored red flags.
The damages sought included cash sent to Etete’s company Malabu Oil and Gas, around $875 million paid in three instalments in 2011 and 2013, plus interest, taking the total to over $1.7 billion.
Nigerian military ruler Sani Abacha had awarded licence OPL 245 to a company Etete owned in 1998.
Subsequent Nigerian administrations had challenged Etete’s rights to the field over many years until a deal to resolve the impasse via a sale to Shell and Eni was struck in 2011.
