Disputed Oil Blocks: Seplat In Limbo As Supreme Court Asks Chevron/Brittania-U To Maintain Status Quo
BEVERLY HILLS, May 18, (THEWILL) – The legal battle between two oil companies, Chevron and Britania-U, over oil mining assets OML52, OML 53 and OML 55 got to a peak Monday as the Supreme Court asked the two companies to maintain the status quo thus putting Seplat Petroleum Development Company, to which Chevron wants to sell the disputed assets to, in limbo.
The dispute started after Chevron had offered for sale OMLs 52, 53 and 55 and as usual invited bids from interested firms. The sale of the assets became controversial after Chevron, in a bid to transparency put the assets through a public bidding process, failed to make a public announcement of a winner, a reserve bidder and unsuccessful bids. It then allegedly turned its back on the highest bidder, Brittania-U Nigeria Limited, and began to deal with Seplat behind the scene.
Brittania-U went to court to contest Chevron's action of not declaring it winner after it posted a $1.67 billion bid for the three assets, an amount later revised to $1.015 billion after both companies' officials met in Houston, United States.
Seplat posted a bid of $630 million for the same assets in partnership with members of SEPLAT consortium as stated in the agreement.
This undated SPA (estimated to have been prepared around November 4, 2013) was later revised and replaced with a new one dated November 14, 2013. But an examination of the bid process documents shows that Chevron bid rules forbade the forming of consortium after the bid had closed.
Though oil industry analysts familiar with this process said even if this were to happen, other participants in the bid ought to have been informed. However Chevron did not.
Brittania-U Nigeria Limited had challenged the Appeal Court ruling which vacated an order of interlocutory injunction by a High Court, restraining Chevron and Seplat from concluding any deal on the oil leases.
On Monday, when the suit came up for hearing , a five-man panel which Justice Tanko Muhammad presided over ordered that “Parties in the matter are ordered to maintain status quo,” adding “ No party is allowed to take any step that will affect the res (subject matter) of the appeal.”
The Supreme Court order followed an application by Rickey Tarfa, SAN, to argue the appellant’s application for mandatory injunction seeking to reverse steps taken by Chevron to sell the disputed oil bloc to Seplat.
Tarfa had reminded the court that at the last hearing of the case on March 24, the court fixed Monday, May 18, to hear argument on the said application for mandatory injunction.
Counsel to Seplat, Damian Dodo, SAN, though agreed with Tarfa’s submission, he however said the appeal itself was ripe for hearing and prayed that energy be committed to arguing the main appeal and not an interlocutory motion.
Counsel to Chevron Nigeria and BNP Paribas Securities Corp, Uche Nwoye Di, SAN agreed with Dodo that the appeal was ripe for hearing.
Counsel for Chevron U.S.A Inc and Mr Hermant Patel, Barrister A. V. Etuwewe also agreed with Dodo.
Responding to the respondents’ counsel submissions, Tarfa explained that it was necessary to hear his application, which seeks not only to reverse steps being taken by the respondents and to stop any further step that they may wish to take concerning the subject matter.
He submitted that there might be nothing to benefit from the appeal if an injunction to protect the res was not issued.
Presiding judge, Justice Muhammad, therefore demanded to know if the counsel to the respondents would make an undertaking regarding the res, to which Dodo said all actions taken by his clients were before the appeal was instituted.
According to Dodo, “Counsel have a duty to the court and indeed themselves to ensure that the dignity, majesty and authority of the court is paramount at all times. That is my principle and practice. And that has been the conduct and practice of the 1st respondent. And we shall continue to do so.”
Nwokedi and Etuwewe on behalf of their clients said Dodo had stated their own position not to take any step and they were bound by that position so stated.
The Supreme Court, in the unanimous decision and perhaps out of abundant caution, therefore ordered parties to maintain status quo pending the outcome of the appeal, which it adjourned to October 6.