Justice Ayokunle Faji of the Federal High Court in Lagos on Monday upheld the $1.7bn arbitral award in favour of the Nigerian Petroleum Development Co. Ltd against the Atlantic Energy Drilling Concepts Nig. Ltd and Atlantic Energy Brass Development Ltd.
Justice Faji, in his judgment, dismissed the Atlantic Energy’s application to set aside the arbitral award of March 5, 2020, and upheld the submissions of NPDC lead counsel, Prof Fabian Ajogwu, SAN, and granted orders recognizing the $1.7bn award as well as for leave to enforce same as a judgment of the Federal High Court.
The Atlantic Energy through its counsel, T. Fagbohunlu, SAN, sometime in August 2015 took the NPDC to arbitration for alleged breach of contract.
However, the NPDC filed a counterclaim for funds due to the Federal Government on account of crude oil sales from the Oil Mining Leases 26, 30, 34, 42, 60, 61, 62 and 63 (known as Brass and Forcados assets) without payment of remittances due.
The NPDC also sought the recovery of unpaid net approved cash calls in respect of the OMLs.
The arbitral tribunal on March 5, 2019, awarded $1.7bn in favour of NPDC and ordered Atlantic Energy to pay the sum as the value of the 55 per cent crude oil portion of the Federal Government taken and sold by Atlantic but not remitted to NPDC.
Atlantic Energy, however, filed a suit before Justice Faji, seeking an order of the court to set aside the arbitral award delivered in favour of NPDC while NPDC sought an order of the court to recognise and enforce the arbitral award.
Ruling on the applications, Justice Faji held that the NPDC’s counter-claim in the arbitration was distinct in all material respects from the suit referred to by the award debtors.
According to the judge, whilst the claim in suit touched on criminal conversion/ diversion of revenue due to the federation, the counter-claim to the arbitration bordered on breach of the strategic alliance agreement between NPDC and the award debtors.
Justice Faji subsequently dismissed the award debtors’ application to set aside the arbitral award.