Court Stops NNPC, Petroleum Ministry from Allocating Crude Oil To Addax Petroleum Over Unpaid $1.3bn Royalty

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A Lagos Federal High Court has directed the Nigerian National Petroleum Corporation (NNPC), Ministry Of Petroleum Resources and National Petroleum Investment & Management Services (NAPIMS) to stop allocating crude oil to Addax Oil Exploration Plc over alleged non-remittance of royalty amounting to $1. 341, 903, 995 billion.

The court presided over by Justice Tijjani Ringim, while giving the directive on Wednesday, held that the crude is from that explored/produced from OMLS 123, 124, 126 and 137 as stipulated in the Production Sharing Contract (PSC) of 1998 between the Addax and NNPC.

The Federal Government and the Attorney-General of the Federation are the plaintiffs in the suit marked FHC/L/CS/298/81, while Addax Petroleum Development of (Nigeria) Limited and Addax Petroleum Exploration (Nigeria) Limited are the first and second defendants/respondents.

Also listed as third to fifth respondents are: The NNPC, Ministry Of Petroleum Resources, Department Of Petroleum Resourses (DPR) and NAPIMS.

Justice Ringim made the order sequel to a Motion for Mareva Injunction filed and argued by the counsel to Federal Government Romeo Ese Michael of D.A Awosika SAN and Co.

The judge agreed with the government that it would serve the interest of justice for the res to be preserved owing to the government’s claim that Addax Petroleum is taking steps to liquidate some of its subsidiaries in Nigeria.

He held: “It will serve the interest of justice if this application is granted because the applicant has established that there is fear of dissipating the res before the hearing and determination of the substantive suit.

“I find that this application is meritorious and same ought to be granted. Accordingly it is hereby granted as prayed”.

Justice Ringim however ordered the government to swear to an affidavit that it would indemnify the defendants in the event that it misled the court to grant the injunction.

The judge had earlier dismissed the defendants’ Notice of Preliminary Objection filed through their counsel I.O Olateru-Olagbegi.

It held that that the suit was properly instituted and should be allowed to be heard at trial and adjourned till March 21, 2022 for mention.

The Federal Government and the Attorney-General of the Federation are the plaintiffs in the suit marked while Addax Petroleum Development of (Nigeria) Limited and Addax Petroleum Exploration (Nigeria) Limited are the first and second defendants/respondents.

The Nigerian National Petroleum Corporation (NNPC), Ministry Of Petroleum Resources, Department Of Petroleum Resources (DPR) and National Petroleum Investment & Management Services (NAPIMS) are the third to fifth respondents respectively……

Other interim reliefs sought by the plaintiffs which were also granted by the court includes: a prayer to suspend “approval relating to budget expenditure and cost, howsoever described in regard to the interest of the first and second respondents in the aforementioned OMLS pending when the first and second Respondents furnish and file before this court verifiable Bank Guarantee from commercial Banks in Nigeria to completely cover the monetary claims of the Plaintiffs in this action.

“An interlocutory order restraining the third, fourth and fifth respondents from allowing the first and second defendants/respondents, to transfer or assign their interest in the OMLS 123/124 and 126/137 pending when the 1st and 2nd Respondents furnish and file before this Court verifiable Bank Guarantee from commercial Banks in Nigeria to completely cover the monetary claims of the Plaintiffs in this action.

“An interlocutory order of the court restraining the third, fourth and fifth Respondents from dealing with the first and second defendants/respondents with respect to OMLS 123/124 and 126/137 pending when the 1st and 2nd Respondents furnish and file before this Court verifiable Bank Guarantee from commercial Banks in Nigeria to completely cover the monetary claims of the Plaintiffs in this action.

“An interlocutory order compelling the third, fourth and fifth Respondents to file affidavit of fact within 7days of service of this Application or any Order of this Honourable Court on them detailing the first and second defendants’ asset, property, monies or instrument and any other items with them pending the hearing and determination of this suit.”

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