TheCable

A federal court in Lagos has declined an application to vacate an interim injunction directing 20 commercial banks to block accounts belonging to Shell Petroleum Development Company of Nigeria (SPDC) and its subsidiaries.

The subsidiaries affected by the injunction granted on January 25, 2021, are Royal Dutch Shell; Shell Western Supply and Trading; Shell International Trading and Shipping Company; and Shell Nigeria Exploration and Production Company.

The injunction was granted to recover the cash value of 16 million barrels of crude oil allegedly diverted from AITEO Eastern E & P Company Limited.

AITEO and some other indigenous oil producers including Belemaoil, Eroton and Newcross had raised a dispute with Shell over allegations of the unapproved methodology used in calculating the volume of crude it lifts on their behalf from the terminal.

The companies argued that Shell deploys underhand practices including using unapproved meters to facilitate crude theft.

A total of 17 banks are said to have complied with the order while three banks have been summoned for allegedly disobeying the order made on January 25, 2021.

The affected banks and their officials include Sola Fagbure and Sharaf Mohammed of Citi Bank; Irene Netimah and Patrick Iyamabo of First Bank; Bill Andrew Odum and Ebenezer Kolawole of United Bank for Africa (UBA).

On March 9, 2021, the court heard applications by the plaintiff (Aiteo) the defendants (SPDC) and others relating to its jurisdiction, motion to discharge its ex-parte order, and committal proceedings against the three banks.

Kemi Pinheiro, Aiteo’s counsel, prayed the court to hear the committal proceedings first.

Pinheiro said it is necessary that the named persons in committal proceedings (the bank officials) be present in court because the proceedings “attached to their person”.

He said alleged contemnors had been served and there’s proof of service, adding that the quasi-criminal nature of committal proceedings made their appearance a necessity. He noted that they had not filed a response.

Adewale Atake, counsel for SPDC; Olawale Akoni, for the three banks; and Chukwuka Ikwuazom, for the four Shell subsidiaries, opposed Pinheiro and prayed that the court instead hears applications questioning its jurisdiction and another motion to discharge the order blocking the accounts.

Oguntoyinbo, in her ruling on Tuesday, upheld Pinheiro’s application and gave primacy to the application for committal proceedings.

“The committal proceedings is the appropriate application to consider…I, therefore, hold that the first application to be heard is the committal proceedings,” she said.

The judge ordered the affected banks and officials to appear before the court on the given date, adding that if they fail to appear it would result in a warrant for their arrest.

The case was adjourned till March 29 for the hearing of the committal proceedings and the other applications.