The Federal High Court in Lagos has certified a judgment by the High Court of Justice, Queen’s Bench Division, directing two Nigerian companies to pay African Export-Import Bank $144.2 million.
The sum includes the outstanding and accrued interest on a facility granted to the defendants in 2011.
The judgment, which was upheld by the Supreme Court of the United Kingdom, has been made enforceable in Nigeria by Justice Muslim Hassan.
Shebah Exploration & Production Company Limited, Allenne Limited and Dr. Ambrose Orjiako are the defendants.
Diamond Bank Plc and Skye Bank Plc (now Polaris Bank) are the other claimants.
Dr. Orjiako, Chairman of Seplat Petroleum, is listed as the President of Shebah Exploration & Production Company.
Certifying the Uk court judgment on March 28, Justice Hassan ordered the defendants to comply with it.
The claimants had sued the defendants at the High Court of Justice Queen’s Bench Division, UK to recover an outstanding loan granted them.
The claimants had applied for a summary judgment against the defendants for sums outstanding under a syndicated loan facility agreement totaling over $144.2 million, together with interest.
Shebah Exploration & Production Company, the first defendant, is a Nigerian company engaged in oil exploration and production and the borrower.
Allenne Limited is the guarantor, while Dr. Orjiako is the President of Shebah and a personal guarantor of the liabilities of Shebah and Allenne pursuant to a Deed of Guarantee and Indemnity dated July 1, 2011.
In a February 19 judgment, Mr. Justice Phillips stated that Shebah had taken the loan to raise working capital for its operations, including funding for a work-over programme to stimulate production at oil wells in the Ukpokiti oil field.
The judge held that the defendants never denied that the claimants advanced $150 million to Shebah pursuant to the Facility Agreement.
There was also no dispute that, apart from paying one installment of $6,111,111.11 in June 2012, Shebah had failed to meet any further repayment installment, despite the claimants agreeing to the deferral of several installments.
The judge said in a previous proceeding, which commenced on March 11, 2014, the defendants agreed that, in exchange for the claimants’ discontinuing the proceedings, Shebah would repay all sums outstanding under the Facility Agreement in two tranches: $49.999,999.86 (with accrued interest) by April 30, 2014 and the balance of the loans and interest by July 1, 2014.
He added that Shebah failed to pay any part of the sum due on April 30, 2014.
“The claimants were, therefore, entitled, under the terms of the Discontinuance Agreement, to commence fresh proceedings in respect of their claims.
“These proceedings were commenced on June 2014, repeating the claims previously made and additional claim against Shebah in respect of the $49.999,999.86 due under the Discontinuance Agreement,” the judge said.
Justice Phillips stated that notwithstanding their previous stance, the defendants now contended that no sums whatsoever are due to the claimants, adding that they (the defendants) have arguable defence to the claim.
The judge, however, ruled that there was no merit in the defendants’ contention.
“The most likely scenario is that it was chosen or selected by the claimants’ lawyer and that they will have adapted it to reflect the specifics of the transactions.
“It is impossible to draw any inferences as to what starting points may have been taken in other transactions, involving other permutations of lenders and other lawyers.
“I am, therefore, satisfied that the defendants do not have a realistic prospect of establishing at trial that the Facilities Agreement is on the claimants’ written standard terms of business.
“The suggestion that the disclosure might alter the position is a classic example of hoping that something may turn up, in this case a forlorn hope given the evidence that there was in fact a degree of real negotiation of the final terms,” the judge said.
Justice Phillips held that while the claimants’ purported acceleration of the loans on October 16, 2013 was ineffective, the defendants did not have a defence to the claimants’ alternative case based on the acceleration notice of October 2, 2014 and subsequent demands of April 14, 2015 and July 27, 2015.
“For the reasons set out above, the claimants are entitled to summary judgment against all three defendants for (i) the principal outstanding under the Facility Agreement of $143,888,888.89, subject to giving credit for the sum paid during the course of this application and the sums conceded in respect of default charges and hedging fees; (ii) the management fees claimed; and (iii) interest calculated on the alternative basis that the loan was accelerated on October 2, 2014,” the judge held.
Dissatisfied , the defendants applied to the Supreme Court of United Kingdom, seeking to appeal the judgment.
Ruling on the defendants’ application, the Supreme Court, comprising Lord Mance, Lord Reed and Lord Lloyd-Jones upheld the decision of the lower court and refused the permission to appeal it.
After considering the application filed on behalf of the appellants, the Supreme Court held: “Permission to appeal be refused because the application does not raise an arguable point of law of general importance.
“The appellants pay the Respondents costs of the application and, where the respondents apply for costs, the costs to be awarded be assessed,” the Supreme Court ordered.
