On Tuesday, February 24, 2015, the Supreme Court played host to Brittania U and Chevron/Seplat.
The presiding justice, Hon. Justice Fabiyi of the Supreme Court of Nigeria, made some introductory remarks after listening to a request by Rickey Tarfa, SAN, attorney 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.
Since Hon. Justice Fabiyi made those remarks, the media has been awash with different interpretations of the brief with many interpreting it to mean victory for one side or the other.
What exactly did Hon. Justice Fabiyi say? The justice had called on the counsels representing Seplat and Brittania U, Rickey Tarfa and D.D Dodo, SAN, 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.
A legal practitioner explains the justice’s remarks: “What the Justice has done is to ask the counsels to prevail on their clients to abide by the letters of the law.” He went on further to assert that “since Ministerial Consent was obtained when the injunction was vacated then the law was respected”.
Regarding the various interpretations of Justice Fabiyi comments made on January 24, Seplat’s spokesperson remarked that “SEPLAT has a policy not to comment on transactions that are under litigation. If and when we have information to share on this issue, we will do so in the appropriate manner and forum.”
How did a simple transaction that was concluded without issues by Shell in 2009 become mired in controversy in this case? The answer lies in what transpired immediately after Chevron asked for a bid for 3 acreages it was putting up for sale.
When Chevorn, following in the footsteps of Shell which had divested OMLS 4, 38 and 41 to Seplat an SPV formed by Shebah and Platform, put up OMLs 52, 53 and 55 for sale, it announced that it would be selling not to the highest bidder, but to the preferred bidder.
Chevron received a deluge of bids, but after a shortlist was made and the sealed bids were opened, it emerged that Britannia U had bid $1.6b which it subsequently revised to $1.015bn.
Seplat had bid for OML 53, AMNI bid for OML 52, while Belemaoil bid for OML 55. The three would later form a consortium which put in a total bid of $800m and were declared preferred bidders.
The consortium subsequently signed an SPA with Chevron on November 28, 2014.
Not so fast, said Brittania U which insisted on being declared bid winner by Chevron and when Chevron baulked, Brittania U sought and obtained an injunction from a Federal High Court in Lagos, restraining Chevron from concluding the sale to the Seplat Consortium.
The Federal High Court did not only grant an interlocutory injunction, it went ahead to grant an extension while the issue of jurisdiction was pending.
Seplat and its consortium partners went to the Appeal court on June 20, 2014 to challenge the High Court’s injunction and to ask that the extension should not be granted. 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.
Brittania U, not satisfied with the Appeal Court’s ruling, went to the Supreme Court to contest the appeal.
Meanwhile, with the SPA in effect and the injunction vacated, Chevron and the Seplat Consortium went ahead with the next phase of the transaction which was to obtain Ministerial Consent. The Honourable Minister apparently acted within the ambit of law since the injunction was vacated.
As soon as the Ministerial Consent was granted, Seplat announced, on February 5, 2015, that it had completed the process of acquiring 40% interest in OML 53 with NNPC holding 60%. Seplat was also named Operator. Seplat again acquired 56.25% equity interest in Belema to provide financial and technical support to this entity.
The next day, the MD/CEO of Brittania U, speaking to a magazine from Paris, said it was 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.”
But Austin Avuru, CEO of Seplat, insisted in an interview with ThisDay that there was nothing wrong with the transaction. “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.”
While the contending parties thrust and parry, the final word must come from the Supreme Court which has not announced a date for the next hearing and only then can one, hopefully, gain some clarity regarding who has erred between the two.
What remains incontrovertible is that a long delay and abandonment of the assets while the case is being adjudicated upon can only lead to loss of much needed revenue for the country and economy.