N134bn Ogoni Judgment Debt: Shell Loses Appeal at Supreme Court

Davidson Iriekpen and Bayo Akinloye

The Supreme Court has dismissed the appeal filed by Shell
Petroleum Development Company (SPDC), which prevented First Bank of
Nigeria Limited from paying the plaintiffs community a judgment
debt now totaling N134 billion to the plaintiff community
represented by 10 Ogoni Chief of Ejama Ebubu community of Ogoni in
Rivers State.

In a ruling on Friday, Justice Kumai Bayang Akaahs said the
notice of appeal filed by the oil giant was incompetent and struck
out based on Order 8 Rule 7 of the court’s rules.

Justice Akaahs also said motion filed by Shell on July 16, 2018
had no leg to stand on it ought not to have been filed.

The Supreme Court consequently awarded N500,000 against Shell
for filing an incompetent appeal in the court.

Citing authorities to back up his submission, the apex court
held that since the notice of appeal filed by Shell sought to be
amended was incompetent, no valid amendment could be effected
because issues of fact or mix law and fact were raised in the
original notice of appeal with leave of court.

He agreed with the submission of the lead counsel to Shell,
Chief Wole Olanipekun (SAN) that an appellant who has a valid and
subsisting appeal can seek the leave of court to do so, adding that
in the instant case, there is no such valid notice of appeal that
could be amended.

“Where the grounds of appeal are based on mixed law and facts
and the leave of either the Court of Appeal or the Supreme Court is
not sought and granted, the appeal is incompetent and neither the
Court of Appeal nor the Supreme Court will have any jurisdiction to
entertain the appeal.

“As the notice of appeal sought to be amended was incompetent,
no valid amendment could be effected even though issues of
jurisdiction were raised in the proposed notice of appeal.

“Learned senior counsel for the appellants stated that correct
legal position that the appellant who has a valid and subsisting
appeal can seek the leave of court to do so but in the instant
case, there is no such valid notice of appeal that can be amended,
Justice Akaahs held.

The suit was first commenced in 1991 before a Rivers State High
Court sitting at Nchia Division, when the Ejama community
represented by Isaac Osaro Ogbara, Victor Obari, John Oguru, Joseph
Ogusu, G. O. Nnah, George Osaro, and Adanta Obelle, had sued Royal
Dutch Shell Plc, Netherlands, Royal Dutch Shell Plc, United
Kingdom, and SPDC over alleged oil spills in 1970 that occurred
when Shell operated in the community. Judgment was entered for the
sum of N6Billion in favour of the community by the Nchia High
court. That judgment was conceded on appeal because the Supreme
Court had in a sister case decided that States High Court have no
jurisdiction in oil related matters. The Plaintiffs in 2001 refiled
the suit at the federal High Court, Port Harcourt.

However, this 2001 case, presided over by Justice Ibrahim Buba
claiming N17billion and interest thereon went through full trial.
Justice Buba, after listening to the submissions of the parties in
the suit, in his judgment in 2010, awarded N17 billion to the
representatives of the Ogoni people.

The court equally granted the Ogoni chiefs 25 per cent interest
charge on the principal sum of about N17 billion.

SPDC then appealed against the judgment and applied for a stay
of execution of the judgment pending the appeal.

As a condition for granting the stay of execution, the court
required Shell’s bankers, FirstBank, to provide a guarantee of the
judgment sum plus interest.

This condition was complied with. But Shell’s appeal failed on
merit because Shell failed to file a brief of argument in support
of their appeal but instead claimed that they were granted leave to
file an amended brief of argument, which the Court of Appeal found
not to be correct.

Against that judgment, Shell proceeded to the Supreme Court
where its lawyer, Olanipekun, SAN now leading Olawale Akanni (SAN)
who was the company’s lawyer at the Court of Appeal when that
appeal was dismissed, filed a fresh application asking for leave to
amend the original notice of the appeal filed by Akoni in the Port
Harcourt court of appeal registry in order for him to argue fresh
points not raised at the court below and in order for him to argue
36 additional grounds of appeal.

Upon the new application at the apex court, the respondents’
lawyer, led by Lucius Nwosu, SAN, filed a preliminary objection. It
must be noted that the appellants against whom judgment was entered
at the court of appeal are Shell companies – Shell International DV
of the Netherlands, Shell International of UK, and Shell
Development Company of Nigeria Ltd.

Nwosu, assisted by Lawal Rabana, SAN and others, argued that the
findings of the Court of Appeal dismissing their appeal were based
on facts, adding that the law is that an appeal must arise out of
the decision complained against.

He stated that if the decision complained against was based on
findings of fact, the constitution requires that you cannot appeal
them except you first seek leave of the Court of Appeal.

The respondents’ lawyer contended that since that notice of
appeal at the Court of Appeal was filed without leave, it meant
that, that notice was incompetent and cannot be amended because it
would mean putting something on nothing and expecting it to
stand.

However, in December 2017, the judgment creditors (Ogoni chiefs)
commenced garnishee proceedings at the Federal High Court in Owerri
presided over by Justice Lewis Allagoa.

They urged the CBN to pay them N122.53 billion out of
FirstBank’s account in its custody.

THISDAY gathered that they calculated the principal sum of N17
billion and the accrued 25 per cent interest charge per annum to
arrive at the sum of N122,533,403,392.

In January 2018, Justice Allagoa granted them a temporary order
(garnishee nisi) ordering the CBN to pay them the sum from
FirstBank’s account with it.

But the CBN asked the court not to make absolute the temporary
garnishee order it granted six chiefs representing the Ogoni
community, compelling it to pay the sum of N122.53 billion on
behalf of FirstBank.

CBN’s lead counsel, Professor Fabian Ajogwu (SAN) while
responding to the garnishee proceeding, stated that making the
order absolute and compelling the CBN to pay out the huge sum would
be against the interest of justice because the matter was still
pending at the Supreme Court.

He also argued that compelling the CBN to pay the N122.53
billion from FirstBank’s funds domiciled with it could have
far-reaching consequences for Nigeria’s oldest and biggest lender
by assets and deposits, and a systemic impact on the rest of the
financial system and wider economy.

With the dismissal of the Shell’s appeal last Friday, it is not
clear if the application filed by the Ogoni chiefs seeking
garnishee absolute against FirstBank and reserved for ruling by
Justice Ibrahim Buba of the Federal High Court in Lagos would not
be granted.

Reacting to the Supreme Court judgment yesterday, Nwosu said:
“With this decision, therefore, all arguments of FirstBank that
Shell was on a further appeal at the Supreme Court for which they
were renging from honouring their obligation that was due by virtue
of their guarantee has completely collapsed and as of today, the
guarantee is standing at N134 billion, contingent liability of
First Bank’s assets. And that there is a garnishee order nisi
attaching First Bank’s money at the CBN which since had been served
on the Central Bank.

“With this judgment now, the central bank is under an obligation
to set aside that amount of money with interest still running from
First Bank’s account to satisfy that judgment debt based on what
the law says under garnishee orders.”