The Federal Republic of Nigeria v Royal Dutch Shell Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Butcher |
| Judgment Date | 22 May 2020 |
| Neutral Citation | [2020] EWHC 1315 (Comm) |
| Date | 22 May 2020 |
| Docket Number | Case No: CL-2018-000787 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 1315 (Comm)
Mr Justice Butcher
Case No: CL-2018-000787
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Roger Masefield QC and Richard Blakeley (instructed by Reynolds Porter Chamberlain LLP) for the Claimant
Lord Goldsmith QC and James Willan (instructed by Debevoise & Plimpton LLP) for the 1 st to 7 th Defendants
Richard Handyside QC and Alex Barden (instructed by Allen & Overy LLP) for the 8 th to 11 th Defendants
Charles Fussell (Solicitor Advocate of Charles Fussell & Co LLP) for the 13 th Defendant
Hearing dates: 28, 29 and 30 April 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
These have been applications by three groups of Defendants challenging the jurisdiction of the court. Those groups may be described as: (1) ‘the Shell Defendants’, namely the First to Seventh Defendants; (2) ‘the Eni Defendants’, namely the Eighth to Eleventh Defendants; and (3) the Thirteenth Defendant (‘EVP’).
In broad outline, the Claimant (‘the FRN’) has brought this action claiming that certain Nigerian oil rights, namely rights in respect of the Oil Prospecting Licence for block 245 (‘OPL 245’), were procured by a fraudulent and corrupt scheme, in which the Defendants knowingly participated, and that the Defendants are liable to it for bribery, dishonest assistance and unlawful means conspiracy.
The principal basis on which the Defendants dispute the jurisdiction of the court is that the FRN is already pursuing claims in Italy to obtain financial relief against, amongst others, the First Defendant (‘RDS’), the Second Defendant (‘SEPA’), the Fourth Defendant (‘SPDC’) and the Eighth Defendant (‘Eni SpA’). The Defendants contend that those claims are the same claims as the FRN now seeks to bring here, and that the court should decline jurisdiction in respect of those claims pursuant to Article 29 of the Brussels Regulation (Recast) (“the Regulation”). The Defendants contend that, if the court declines jurisdiction under Article 29 of the Regulation over the claims against RDS and Eni SpA, the entire proceedings should be dismissed. This is because RDS is the ‘anchor defendant’. It is because RDS is domiciled in England that the FRN asserts that the court has jurisdiction over the remaining Defendants: under Article 8(1) of the Regulation in the case of the Sixth and Seventh Defendants and of Eni SpA and pursuant to CPR 6.36 and paragraph 3.1(3) of PD6B in the case of the other Defendants. In the alternative to the application under Article 29, the Defendants seek a stay of these proceedings under Article 30 of the Regulation or, in the further alternative as a matter of case management, pending a final determination, including all appeals, of the claim that the FRN has brought in Italy.
The Shell and the Eni Defendants also seek an order that the court should decline jurisdiction over the FRN's claim to a declaration that it is entitled to rescind the relevant agreements on the basis that there is no serious issue to be tried in this regard.
Finally, the Shell and Eni Defendants seek the setting aside, on the grounds of material non-disclosure, of the order made by Cockerill J on 11 March 2019 granting the FRN permission to serve these proceedings out of the jurisdiction on SEPA, the Third Defendant (‘SNEPCO’), SPDC, the Fifth Defendant (‘SNUD’), and on the Ninth to Eleventh Defendants.
The FRN's position is that Article 29 of the Regulation does not apply. It accepts that a short stay is appropriate. It says that it does not matter greatly whether that stay is under the court's case management powers or under Article 30 of the Regulation; but if it matters, it submits that a case management stay is the appropriate course. It contends that there is a serious issue to be tried as to whether it is entitled to a declaration as to entitlement to rescind. And it contends that there was no material non-disclosure or failure to comply with its duty of full and frank disclosure or to make a fair presentation in its application to Cockerill J.
Factual Background
It is convenient to begin by setting out an account of the factual background. This is not intended to make findings as to the underlying facts, insofar as they are in dispute, but to allow for comprehension as to the issues which arise.
Block 245 is an ultra-deep offshore petroleum block in Nigerian territorial waters. In April 1998 Chief ‘Dan’ Etete, the then Nigerian Minister for Petroleum serving under President Abacha, awarded OPL 245 to the Twelfth Defendant (“Malabu”), which was a newly-incorporated company. It appears that those interested in Malabu included Mr Etete and Mr Mohammed Abacha, the son of President Abacha.
President Abacha died in 1998 and was replaced by President Obasanjo. In March 2000 the new government confirmed Malabu's licence. In July 2001, however, it revoked it. After a bidding process, in May 2002 the FRN awarded the rights to OPL 245 to SNUD. In 2003, SNUD entered into a production sharing agreement with the Nigerian National Petroleum Corporation (“NNPC”) pursuant to which SNUD agreed to pay, and did pay, a signature bonus of US$210 million to the FRN in return for a 40% interest in OPL 245.
Following this award to SNUD, ICC arbitration proceedings ensued between SNUD and Malabu. Malabu brought proceedings in the USA and in Nigeria against the FRN and various Shell entities. The Nigerian House of Representatives also launched an enquiry into OPL 245. It concluded in May 2003 that OPL 245 had been legally awarded to Malabu, that the revocation of Malabu's licence should be set aside, and that Shell should pay US$550 million in compensation to Malabu. In November 2004, however, the ICC arbitral tribunal decided that the revocation of the award of OPL 245 to Malabu was legitimate and that SNUD was not in breach of any obligations to Malabu.
Two years later, on 30 November 2006, the FRN settled its litigation with Malabu and re-awarded or purported to re-award OPL 245 to Malabu. In April 2007, SNUD commenced ICSID proceedings against the FRN under the Netherlands-Nigeria Bilateral Investment Treaty alleging the unlawful expropriation of SNUD's rights to OPL 245. The substantive hearing of the ICSID proceedings took place in March 2010.
The Eni group appears to have become involved in 2010, as Malabu was seeking to sell the interest which it asserted it had in OPL 245. Discussions between Shell, Eni, the FRN and Malabu took place over a period of about 12 months. These discussions culminated in three agreements made in April 2011 (‘the April 2011 Agreements’), as follows:
(1) An agreement (‘the Resolution Agreement’) between SNUD, SNEPCO, the Ninth Defendant (‘NAE’), the FRN and NNPC, under which SNEPCO and NAE jointly acquired the equity interest in OPL 245 for US$1.3 billion. This amount was comprised of (i) a cash payment of US$1.092 billion to the Federal Government of Nigeria (‘FGN’) which was paid by NAE into a JP Morgan escrow account, and subsequently released by JP Morgan into the FRN's depositary account at JP Morgan; and (ii) the release to the FRN of a signature bonus in the amount of US$207.96 million. The Resolution Agreement also provided for the exercise of ‘back-in’ rights by the FRN.
(2) An agreement between SNUD, SNEPCO and the FRN under which all claims as between them were settled (‘the Shell Settlement Agreement’).
(3) An agreement between the FRN and Malabu by which the FRN agreed to pay Malabu US$1.092 billion in full and final settlement of Malabu's claims (‘the Malabu Settlement Agreement’).
The FRN's case is that a large proportion of the money paid by the FRN to Malabu under the Malabu Settlement Agreement was used to pay bribes. It alleges that some US$812 million was paid to entities controlled by Mr Abubakar Aliyu, who is alleged in turn to have made payments to, amongst others, Mr Etete, and to senior officials of the Nigerian government in office at the time of the April 2011 Agreements including President Goodluck Jonathan, Attorney General Adoke, and the Minister for Petroleum Resources, Ms Alison-Madueke. As I have already indicated, the FRN contends that the Defendants participated in the scheme to pay bribes to these officials.
There was an investigation of matters related to OPL 245 by the FRN's Economic and Financial Crimes Commission (‘EFCC’) in 2012. I will refer to this further in due course. In 2013 three NGOs wrote to the Public Prosecutor of Milan (‘PPM’) raising concerns about the transactions in relation to OPL 245, prompting an investigation in Italy.
In 2015 President Goodluck Jonathan was defeated in an election in Nigeria. He was replaced by President Buhari, who assumed office in May 2015 and continues to be President of the FRN. On 1 September 2016, the EFCC produced a report to the Attorney General of the FRN. That report advised, amongst other things, that the FGN should consider ‘unwinding’ the whole process, review the...
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