Nigeria has lost its $1.7 billion claim against JP Morgan Chase Bank over the transfer of proceeds from the sale of OPL 245 in 2011.
In 2017, Nigeria had instituted a legal action against American banking and financial service group, JP Morgan Chase, claiming over $1.7 billion in damages over its role in the disputed 2011 Malabo oil deal.
The suit was in relation to the $1.3 billion acquisition of an oil block prospecting licence OPL 245 by oil majors, Shell and Eni, which has also been at the centre of ongoing legal battles in Milan and the UK.
The Federal Government accused JP Morgan of gross negligence in its decision to transfer funds paid by Shell and Eni into an escrow account to a company controlled by Nigeria’s former Minister for Petroleum, Dan Etete, instead of paying into government account and without conducting sufficient due diligence.
In the judgement delivered on Tuesday, the
Business and Property Courts of England and Wales Commercial Court said there was no proof that Nigeria was defrauded in the deal.
The federal government had sued JP Morgan on the ground of “Quincecare duty”, alleging that the bank “ought to have known” that there was corruption and fraud in the transaction which saw Malabu sell its 100 per cent in OPL 245 to Shell and Eni for $1.1 billion.
Nigeria argued that there were enough “red flags” for JP Morgan to have halted the transfers.
However, the bank rejected Nigeria’s claims, maintaining that all due processes were followed and money laundering checks were done, arguing that allegations of fraud only came up after a new government took over in Nigeria.
In the judgement, Sara Cockerill ruled that the Nigerian government could not prove that it been defrauded, saying it may be that with the benefit of hindsight, “JPMorgan would have done things differently” but declared that “none of these things individually or collectively amount to triggering and then breaching” the bank’s duty of care to its client.
The judge at London’s High Court had to decide whether there was fraud, whether JPMorgan was on notice of it and whether it had breached its duty of care by proceeding with $875mn worth of payments and facilitating funds related to a 2011 oil deal.
