Court rejects Allied Energy, Camac’s application to recover seized multi-billion OYO crude oil

The high court sitting in Lagos state has rejected the application by the Allied Energy Plc and Camac International (Nig) Ltd seeking a mandatory injunction against the Nigerian Agip Exploration Limited (NAE) to stop the execution of an order to stop the seizure of assets under the court process initiated by NAE at the Federal High Court in Lagos and Port Harcourt.

The Allied Energy and Camac, Nigerian owned companies, filed an application at the Lagos State High Court requesting from the court mandatory injunctions to compel NAE to take all steps to undo the process initiated at the Federal High Court, including but not limited to writing a formal letter to the Deputy Chief Registrar (Sheriff) of the Federal High Court, Lagos and Port Harcourt divisions to forthwith discontinue the execution carried out at the instance of  NAE on the 31st of January 2018

The action of the Allied Energy and Camac is sequel to the writ of attachments issued by the Federal High Court on the 31st of January, 2018 and executed against the companies’ assets at Oil Mining Leases (OMLs) 120 and 121 including seizure of the crude oil produced from OYO oilfields, following an earlier enforcement order of the Federal High Court Lagos granted by Justice Hadiza R. Shagari on 11th May, 2017 in suit No. FHC/L/CS/625/2017 and upheld by the court on 16th January 2018.

According to the Federal High Court, the order was for recognition and enforcement of a final award rendered at the London Court of International Arbitration (LCIA) on 14th February, 2017 in favour of NAE against Allied Energy Plc, Camac International (Nigeria) Ltd and their parent company, Camac International Ltd (CIL) in respect of a contractual debt of over $200million owed by them to NAE.

But in the case filed against  Nigerian Agip Exploration Limited (NAE), Allied Energy and Camac applied for the mandatory injunctions to remove all locks, chains and restraints of whatsoever nature on the export valves aboard the Vessel FPSO Armada Perdana located offshore within Nigeria territorial waters, off Onne Port, Rivers State of Nigeria  on Oil Mining Lease No. 120 and Oil Mining Lease No. 121 (OML) 121) including all crude oil produced from OYO fields discharged into the vessel FSPO Armada Perdana.

In his ruling however,  after hearing oral addresses,  Justice T. A. O. Oyekan-Abdullai of the Lagos High Court,  on the 8th of March, 2018 and in Suit No. LD/019FRJ/2017, refused the prayers sought by the Allied Energy and Camac’s application.

It would be recalled that the dispute between the Nigerian Agip Exploration Limited and the Allied Energy and Camac arose from the decision of the arbitration award of the London Court of International Arbitration (LCIA) which is being enforced by NAE over a dispute regarding a Sale and Purchase Agreement (SPA) concluded in June 2012 between NAE as Seller and Allied Energy as Purchaser, in which NAE had transferred to Allied Energy Plc the entirety of NAE’s interests and rights in the two Oil Mining Leases 120 and 121 in the deep offshore region of Nigeria.

According to the Nigerian Agip Exploration Company, Payment of part of the price for the transferred interests and rights was deferred to be paid by Allied Energy to NAE, “As a result of subsequent non-payment by Allied Energy Plc, NAE filed the arbitration at the London Court of International Arbitration in accordance with the arbitration terms provided in the SPA.

“The arbitration was finally concluded on 14th February, 2017 when the Final Award was issued by the arbitrators awarding sums in excess of $200million in favour of NAE against Allied Energy, Camac and their parent company, Camac International Limited.”

In another development, a federal court in Texas,United States of America(USA) has also ruled in mid-March 2018 in favour of two drilling firms Transocean Offshore Gulf of Guinea VII and Indigo Drilling’s claim for $14million against Erin Energy.

The claims arose from unpaid bills in respect of work which they carried out on OML 120 and 121, offshore Nigeria. This followed Erin Energy’s failure to pay an arbitral award issued in favour of the drilling firms by an arbitral court under the supervision of the London Court of International Arbitration (LCIA).

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