Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV v Societe Bengaz SA & Anor
| Court | Queen's Bench Division (Commercial Court) |
| Judge | Mr Justice Henshaw |
| Neutral Citation | [2024] EWHC 901 (Comm) |
| Date | 22 April 2024 |
| Year | 2024 |
| Counsel | Thomas Munby Kc,Maxim Cardew,Abdul Jinadu |
Neutral Citation Number: [2024] EWHC 901 (Comm)
Case No: CL-2023-000372
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Date: 22/04/2024
Before :
THE HONOURABLE MR JUSTICE HENSHAW
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Between:
NEDERLANDSE FINANCIERINGS-
MAATSCHAPPIJ VOOR
ONTWIKKELINGSLANDEN N.V.
Claimant
- and -
(1) SOCIÉTÉ BENGAZ S.A.
(a société anonyme incorporated and existing
under the laws of the Republic of Benin)
(2) WEST AFRICAN GAS PIPELINE
COMPANY LIMITED
(a company incorporated and existing under the
laws of Bermuda)
Defendants
- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -
Thomas Munby KC and Maxim Cardew (instructed by Hogan Lovells International LLP)
for the Claimant
Edgar Yves Monnou (Chairman of the First Defendant) for the First Defendant
Abdul Jinadu (instructed by AO Law Ltd) for the Second Defendant
Hearing date: 8 March 2024
Draft judgment circulated on: 15 April 2024
Approved Judgment
.............................
Mr Justice Henshaw
Approved Judgment
FMO v Société Bengaz and West African Gas Pipeline
Company Limited
Mr Justice Henshaw:
(A) INTRODUCTION ................................................................................................... 2
(B) FACTS ..................................................................................................................... 3
(1) The parties ............................................................................................................ 3
(2) WAGPCO shareholders’ agreements ................................................................... 3
(3) The Credit Agreement between FMO and Bengaz .............................................. 4
(4) Security arrangements .......................................................................................... 8
(5) Transactions undertaken ..................................................................................... 14
(6) Diversion of funds .............................................................................................. 16
(7) Procedural history .............................................................................................. 16
(C) PERMISSION TO APPLY FOR SUMMARY JUDGMENT .............................. 22
(D) SUMMARY JUDGMENT .................................................................................... 24
(1) Principles ............................................................................................................ 24
(2) FMO’s debt claim against Bengaz ..................................................................... 26
(3) Declaration claims .............................................................................................. 26
(a) Proceeds Account ........................................................................................... 26
(b) Segregated Funds ........................................................................................... 27
(c) Rights exercisable by FMO as Receiver ........................................................ 27
(d) FMO as Bengaz’s attorney ............................................................................. 28
(e) Missing Payments ........................................................................................... 28
(f) Conclusion on declaration claims ................................................................... 28
(4) Specific performance and injunctive relief ........................................................ 28
(a) Specific performance against Bengaz ............................................................ 28
(b) Injunctive relief against WAGPCO................................................................ 29
(5) Disclosure relating to Missing Payments ........................................................... 30
(6) Indemnity sought by WAGPCO ........................................................................ 30
(7) Other relief ......................................................................................................... 34
(E) CONCLUSIONS ................................................................................................... 34
(A) INTRODUCTION
1. On 8 March 2024, I heard an application by the Claimant (“FMO”) for permission to
apply for summary judgment against the First Defendant (“Bengaz”), in the absence of
any Acknowledgement of Service or Defence; and for summary judgment. At the end
of the hearing, I granted both applications and indicated that written reasons would
follow. This judgment sets out my reasons for granting both applications.
2. The applications were supported by the 5th and 6th affidavits of Mr Ardil Jabbar Salem,
a partner in FMO’s solicitors, Hogan Lovells International LLP. Bengaz did not file
any evidence in response. The Second Defendant (“WAGPCO”) served, in response to
Mr Justice Henshaw
Approved Judgment
FMO v Société Bengaz and West African Gas Pipeline
Company Limited
the applications, the 2nd affidavit of Mr Odey Simon Adamade, WAGPCO’s General
Counsel.
3. FMO’s claims arise from a Credit Agreement, under which as at the date of the hearing
Bengaz owed approximately US$56 million to FMO (including interest), and associated
security documentation. As explained below, Bengaz is a shareholder in WAGPCO,
and in that capacity has received and continues to receive substantial sums from
WAGPCO over which FMO claims proprietary and other rights.
4. For the reasons set out below, I concluded that FMO’s claims succeeded in full, and
gave summary judgment accordingly together with ancillary relief.
(B) FACTS
(1) The parties
5. FMO is a company incorporated in the Netherlands and majority-owned by the
government of the Netherlands. It operates as a bank and lends funds with a view to
promoting economic development in emerging markets.
6. Bengaz is a company incorporated in Benin which operates as a special purpose vehicle
for the purpose of holding investments in WAGPCO.
7. WAGPCO is a company incorporated in Bermuda. It owns and operates the West
African Gas Pipeline which supplies gas from Nigeria to certain other West African
countries pursuant inter alia to a West African Gas Pipeline Project Agreement dated
22 May 2003 between WAGPCO and the governments of Benin, Ghana, Nigeria and
Togo.
(2) WAGPCO shareholders’ agreements
8. The rights of WAGPCO’s shareholders are (so far as material) regulated by:
i) a Shareholders Agreement dated 19 May 2003 between WAGPCO and its
shareholders, governed by English law, subsequently amended by seven
amendment agreements dated 16 December 2004 (two agreements), 27 July
2005, 11 August 2005, 18 May 2007, 10 February 2022 and 23 June 2022
(together “the Shareholders Agreement”); and
ii) an Escrow Agreement dated 19 May 2003 between WAGPCO, its shareholders
and Standard Chartered Bank, governed by English law, supplemented by a
further agreement dated 19 May 2003 and amended by an agreement dated 11
August 2005 (together “the Escrow Agreement”).
9. Since 2005, pursuant to a transaction reflected in the fourth amendment to the
Shareholders Agreement and the first amendment to the Escrow Agreement, Bengaz
has been a 2% shareholder in WAGPCO and a creditor of WAGPCO in respect of
substantial shareholder loans.
10. Bengaz’s acquisition of its shareholding and other rights in respect of WAGPCO was
financed by lending from FMO, as I explain below.
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