A Federal Capital Territory (FCT) High Court in Abuja has nullified arbitration proceedings at the International Chamber of Commerce (ICC), London, instituted against indigenous energy company, Aiteo Eastern E&P Company Limited, by a group of lenders who partly financed its acquisition of Oil Mining Lease (OML) 29.
The court declared the arbitration a violation of its subsisting injunctive orders.
Aiteo acquired OML 29 and the Nembe Creek Trunk Line (NCTL) from Shell in a landmark $3.01 billion transaction concluded in 2014. The deal was largely funded by billionaire founder Benedict Peters, who contributed approximately $1 billion of his personal funds to close the purchase and restart production.
Justice S.B. Belgore gave the ruling on Tuesday, July 8, 2025, while delivering judgment in an application filed by Tempo Energy Nigeria Ltd., a minority equity contributor to the OML 29 deal.
According to court documents, the claims originated from a multi-party financing arrangement dating back to 2014. Tempo Energy alleged that several of the defendants breached their obligations under the governing facility agreements and, without including Tempo, initiated proceedings in the High Court of England and Wales and commenced arbitration before the ICC on December 11, 2020.
To protect its interest, Tempo filed a suit on January 14, 2021, seeking injunctive relief to restrain the defendants from taking any further steps in the UK proceedings and the ICC arbitration.
In a related application, filed by Tempo through its counsel, Kehinde Ogunwumiju, SAN, the FCT High Court granted interim injunctions on January 22, 2021, restraining the defendants from proceeding with the arbitration and the English court case pending the determination of the motion on notice. The court also consolidated pending applications and adjourned the matter.
The suit, marked FCT/HC/CV/079/2021, listed Aiteo Eastern E&P Company Ltd, African Finance Corporation, Ecobank Nigeria Ltd, First Bank of Nigeria, Guaranty Trust Bank, Fidelity Bank, Shell Western Supply & Trading, Shell International Trading & Shipping, Citibank Europe (UK Branch), Citibank N.A. (London Branch), FBN Trustees, Zenith Trustees, FBN Merchant Bank, Sterling Bank, Union Bank, Zenith Bank, and Dame Elizabeth Gloster as defendants.
Dissatisfied with the High Court’s ruling, the defendants filed an appeal at the Court of Appeal, Abuja Division. However, despite the subsisting interim injunctions issued by the High Court, the defendants continued with the ICC arbitration proceedings in London from 2021 to 2024.
In a unanimous judgment delivered on April 25, 2025, the Court of Appeal affirmed the validity and subsistence of the January 2021 injunctions. The appellate court dismissed the appeal as an abuse of court process, awarded N1.5 million in costs against the defendants, and ordered an accelerated hearing of the pending applications at the High Court. It also warned that any actions taken in defiance of valid court orders may be declared void.
Following the appellate court’s judgment, at the resumed hearing before the High Court on May 20–22, 2025, Tempo Energy applied for a restorative order to nullify the ICC arbitration. Ogunwumiju, SAN, argued that the arbitral proceedings were conducted in flagrant violation of the court’s orders.
Counsel to Ecobank Nigeria and other defendants, including Mrs. Joke Aliyu and Mr. Babatunde Fagbohunlu, SAN, filed a preliminary objection challenging the jurisdiction of the court. They argued that the FCT High Court lacked the competence to restrain foreign arbitral proceedings.
Justice Belgore dismissed the objection, describing it as incompetent and an abuse of court process. He ruled in favour of Tempo Energy and declared the ICC arbitration proceedings null and void, having been conducted in violation of subsisting court orders.
The court reiterated that the interim orders of January 22, 2021, remain valid and binding on all parties. It directed the defendants to desist from taking any further steps in defiance of its orders and awarded an additional N500,000 in costs to Tempo Energy. The matter was adjourned to September 29, 2025, for hearing of the consolidated interlocutory applications.
Aiteo had earlier sued Shell Petroleum Development Company of Nigeria, alleging fraud, deceit, and misrepresentation in the 2014 sale of its 30% stake in OML 29. In suit number FHC/ABJ/C8/738/2021, filed before a Federal High Court in Abuja, Aiteo claimed Shell failed to fully disclose the actual condition of the oil wells and asked for $2.5 billion in compensation.
The company cited the poor condition of the asset and repeated attacks by oil thieves on its infrastructure as reasons for its inability to meet its financial obligations to creditors.
According to documents, the consortium of lenders committed approximately $2 billion in financing: Zenith Bank – $323 million, First Bank and GTBank – $200 million each, Fidelity Bank – $175 million, AFC – $125 million, Ecobank Nigeria and Union Bank – $100 million each, Sterling Bank – $60 million, and Shell Western – $512 million.
Peters’ total equity contribution included $898,237,697.35 in cash and an additional $257 million at closing to cover fees, ancillary costs, and restart production. Tempo Energy, among other small equity holders, contributed $136 million.
society4 months ago
celebrity radar - gossips6 months ago
Politics2 weeks ago
society3 months ago