86 OIL WELLS: THE LEGAL FICTION ANGLE

By NBF News
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A lawyer friend recently took me up on my article entitled 'Supreme Court as a Victim of Oil Politics,' published in a number of newspapers including Daily Sun. Based on the concept of Legal Fiction as a legal reality, he tried to defend the Supreme Court's judgment.

If the argumentation was instructive and fascinating, a little further inquiry by me coupled with some research yielded even more fascinating dividends. Please have a ball.

The concept of Legal Fiction must have evolved in England towards the end of the 19th century. By it a fictional or hypothetical premise is propounded to give effect to a substantive legal position established by law, or to ground an equitable postulation in order to do substantive justice.

The doctrine of the 'Corporate Entity' for instance, is a concept of legal fiction, established to give effect to the substantive provisions of the Companies Laws of the common law jurisdictions, which give companies a legal persona to make it a person, in the eyes of the law.

We all know that in reality, and in actual fact, a company is not corporeal, and has no physical manifestation as presumed by law. The law, however, creates this legal fiction so that companies can be distinct from their owners, and companies can enter into contracts in their own name, and in fact can enter into contracts with their owners.

Legal fiction in equity was made popular by Lord Denning, MR, when he stretched equitable doctrines to their elastic limits to create estoppels in equity that could defeat established legal rights in certain circumstances. Unlike legal fictions in statutory provisions, which ipso facto have the force of law, legal fictions in equity only find expression where there appears to be a lacuna in the common law or statutory provisions, and there is a compelling need to do substantive justice.

Thus, the series of English cases such as Hughes v Metropolitan Railway Co (1877) 2 AC 439, and Central London Property Trust Ltd v High Trees House Ltd (1947) KB 130 all had in common, the need to apply fictional doctrine of estoppel in order to avoid injustice that could be occasioned by a strict application of common law.

The major draw back of legal fiction in equity is that there are no templates to follow, and by their nature, there are no precedents to guide their promulgation and application. Essentially, the adjudicating body propounds the doctrine to justify its conclusions and determination of the matter. This is where the danger lies.

We are made to understand in the Supreme Court's judgment that an agreement was entered into between Obong Victor Attah and Dr. Peter Odili, the former governors of Akwa Ibom and Rivers states respectively, wherein the former conceded ownership of those 86 wells to Rivers state and cannot now turn round to renege on that agreement.

This sounds like an estoppel.  Obong Victor Attah has in a published article, clearly denied entering into such an agreement. Mr. Umana O. Umana, current Secretary to the government of Akwa Ibom State, who was the Finance Commissioner in Attah's government, has indirectly corroborated Attah. Dr. Odili has not come out to state if he entered into such an agreement.

If, ex hypothesis Obong Attah and Dr. Odili had entered into the agreement stated by the Supreme Court (a position not conceded) can such an agreement supersede the provisions of the Constitution of the Federal Republic of Nigeria, the National Boundary Commission Act, and the Revenue Mobilisation Allocation and Fiscal Commisssion Act? In other words, does the fictional estoppel created by the purported agreement displace the legal rights established by Nigeria's grande norm, the constitution, and other statutory provisions? Legal fictions in equity only find expression where there is a lacuna in the common law or statutory provisions. Equity cannot displace the strict provisions of substantive law.

The right of states of the federation to income from revenue derived from oil exploration in their territory under the 'derivation principle' is governed by the proviso to S.162 (2) of the 1999 Constitution. The National Boundaries Commission is the body empowered to determine in whose territory oil wells are located. The Revenue Mobilisation Allocation and Fiscal Commission is the body statutorily empowered to compute what revenue accrues to what state from the derivation principle, taking into account the findings of the National Boundaries Commission on the location of oil wells.

There is no provision in the Nigerian Constitution or in any other law of the land that empowers a state governor to negotiate or enter into an agreement with another state governor on the ownership of oil wells or revenue accruing from such wells.

Those who followed the 'Resource Control' battles and the political solutions that the vindictive ex-president Obasanjo crafted out would recall the days of 'zero allocation' to Akwa Ibom and Ondo states, and the gun-to-your-head 'agreements' that Obasanjo subsequently presented to the nation. Surely, this cannot constitute the basis of estoppels except perhaps in ancient English folklore where one would toss a coin into a well, shut one's eyes, and make a wish, and it was expected that the fairies of the land would make the wish come true. The 86 'wishing' wells of Rivers State remain founded on legal fiction that cannot stand the test of time.

There are three ways of resolving this matter and reversing the injustice meted to Akwa Ibom State. Firstly, the Supreme Court can be moved to review its own judgment on the premise that the previous judgment was arrived at in error. I am told it has been done in the past. Secondly, the statutory provisions regulating this matter can be amended to categorically exclude the possibility of a despotic ruler ramming down his wishes on states in contravention of the laws of the land. A third option, which should be discouraged, is the 'Political Solution'. However, a just solution can only be found if the present government of Akwa Ibom State would rise above pettiness and stop shooting from the hip.

This matter comes at a time when that government is spending more of its time fighting political battles and apparently polarizing the state, without giving a serious thought to the interest of this generation and to posterity. For example, before the ink dried on the Supreme Court judgment, the government's mouthpiece, Mr. Aniekan Umanah, told a press conference that ex-Governor Attah was to blame for the loss of the oil wells. He accused Attah of selling out the assets of Akwa Ibom State to Rivers State.

This, in spite of the fact that the current governor of the state, Dr. Godswill Akpabio, who served in Attah's cabinet knew, or ought to have known the facts of the case. The same Attah who fought the resource control battles to elevate the place from a 'zero allocation' state to the highest revenue earner in the country was portrayed as the villain of the piece. But indirectly, to Attah's rescue, came Mr. Umana O. Umana, the Secretary of the government, who found it in him to contradict the government mouth piece and declare that no such agreement existed.

The present government of Akwa Ibom state will do well to rise above partisan and parochial considerations, as I urged previously, and reach out to all interest groups within and out of the state, in seeking to reverse this judgment for the sake of future generations of Akwa Ibom people.

Mr. Nzeakah, a former Editor of Sunday Punch, writes in from Lagos.