57bn Judgement Debt: Rivers Govt Takes Over Shell’s Kidney Island, Says It Acquired Same Through Court Auction

…action premature, unlawful due to pending appeals – Shell

The Rivers State Government says it has secured the enforcement of its interest in the acquisition of 45 percent equity stake in Oil Mining Lease (OML) 11 and Kidney Island in Port Harcourt owned by Shell.

Shell, however, said the action is premature and unlawful due to several appeals on the matter allegedly still pending in the courts.

The state government had moved Wednesday, December 23, 2020, and broke the keys and chains with which the gates of Kidney Island in Port Harcourt were locked.

Photos of court officials executing to action went viral soon after.

On this note, the state government issued a statement saying Kidney Island, which was once used as Shell Petroleum Development Company (SPDC) operational base in Port Harcourt, now belongs to the Rivers State Government.

The statement said the action is pursuant to a certificate of purchase registered in the Lands Registry as No. 6 on page 6 in Vol. 46, Port Harcourt.

The statement said, “The certificate of purchase was issued by the order of the High Court of Rivers State on July 23, 2019, and September 25, 2019, following the purchase of the facility.”

The state government recalled that the Supreme Court had on November 2020 reaffirmed Rivers State Government’s acquisition of SPDC interest in OML 11 and Kidney Island when it said the Supreme Court dismissed Shell’s suit which sought to set aside the judgment made against it in 2019 in favour of Ejama-Ebubu community.

The Rivers State Attorney General and Commissioner for Justice, the professor, Zaccheus Adangor (SAN), addressed Government House Reporters on Wednesday on the action of government said to be based on the judgment of Rivers State High Court.

The statement said: “You will recall that sometime in 2017, the people of Ejama-Ebubu secured a judgment against SPDC and its subsidiaries in the sum of N57.7Billion Naira for the damages done to their environment arising from the oil spill from the Trans-Niger pipeline.

“After that judgment, Shell refused to pay the judgment sum and thereafter proceeded to levy execution by attaching the moveable properties of SPDC. But those were found to be grossly insufficient to settle the judgment sum.

“Subsequently, they (Ejama-Ebubu community) approached the court to seek the leave of the court to attach the immovable properties of SPDC and the court granted them that order. Following the grant of that order, there was a court order for sell of some of the properties of SPDC including Kidney Island and the acquisition of Shell interest in OML 11.”

Adangor said after the court order, a public auction was held by the officers of the Rivers State Judiciary and the State Government bid successfully for the purchase of Kidney Island and Shell interest in OML 11.

The statement went on: “So we are here to execute the judgment of the High Court of Rivers State and secure the enforcement of the interest acquired by the Rivers State Government.”

The Attorney General stated that the Rivers State Government successfully executed the enforcement as Shell in all fairness did not resist the enforcement.

“It was lawfully purchased through public auction ordered by the court pursuant to a court judgment, hence everything went in accordance with the due process of the law.

“The Rivers State Government successfully executed the enforcement and in fairness to Shell, there was no resistance during the exercise.”

“I was on ground to ensure that everything was done smoothly and in accordance with the law.”

Also speaking, a representative of the office of the Deputy Sheriff, High Court, Port Harcourt, Livinus Akere, said the exercise was to take vacant possession of Kidney Island auctioned on the 13 August 2019 and OML 11 in Ejama Community of Eleme Local Government Area.

In September 2019, Rivers State Governor, Wike had announced the acquisition of SPDC 45 per cent interest in OML 11 oilfields and Kidney Island in the State.

The governor following a court order to auction SPDC assets in the suit against Ejama-Ebubu community had directed the Rivers State Ministry of Finance Incorporated to make a bid of USD 150,000,900 supported by a bank guarantee and cash payment to the Deputy Sheriff in the sum of N1Bn, the later payable to the judgment creditors while the former is put in an escrow account.

Shell reacts

In a swift response, SPDC said

The Shell Petroleum Development Company of Nigeria Limited (SPDC) has dismissed the purported takeover of Kidney Island asset of the SPDC Joint Venture in Port Harcourt by the Rivers State Government in the exercise of rights purportedly acquired through a court auction process that is still the subject of ongoing appeals at the Court of Appeal sitting in Port Harcourt.

According to SPDC, any purported exercise of rights allegedly acquired through that process including any attempt to take over or seal up the Kidney Island asset or other assets of the SPDC JV to satisfy claims in pending suits is premature and prejudicial to the ongoing court proceedings, and therefore not recognised.

Under the Nigerian Petroleum Act, any acquisition or assignment of interests in a license or lease would require the consent of the Minister of Petroleum. No such consent has been given in the case of the purported acquisition by the Rivers State Government.

In addition, the ruling of the Supreme Court on 27 November 2020 did not decide liability or the size of the award in the underlying suit of Chief Ogbara & Others Vs SPDC neither did the ruling affirm the purported sale of SPDC JV’s assets to the Rivers State Government as being claimed by the state.

Meanwhile, there is a pending litigation by SPDC in which the Federal High Court has issued an interim order restraining further enforcement of the underlying Agbara judgment pending the hearing of the motion on notice fixed for hearing on 14 January 2021.

SPDC therefore calls on the Rivers State Government and those claiming interest in the SPDC Kidney Island asset to stay further action to allow the due process of the law as enshrined in the Nigerian Constitution.

We remain of the view that until the pending appeals are heard and determined, any exercise of rights including any attempt to take over or seal up SPDC JV’s assets by the Rivers State Government is premature and unlawful.

Thenigerialawyer