How court ordered banks to freeze Shell’s accounts over alleged oil theft 

A Lagos High Court, Wednesday, ordered the 20 commercial banks where the Shell Petroleum Development Company of Nigeria Ltd operate accounts in Nigeria to freeze the companies’ accounts.

The presiding judge, Justice Oluremi Oguntoyinbo, granted the mareva injunction over an allegation by AITEO Eastern E & P Company Ltd, that the multinational firm diverted more than 16 million barrels of crude oil from them.

In the suit, the plaintiff AITEO Eastern E & P Company Ltd listed SPDC Ltd, Royal Dutch Shell Plc, Shell Western Supply and Trading Ltd, Shell International Trading and Shipping Company Ltd and Shell Nigeria Exploration and Production Company Ltd as first, second, third, fourth and fifth defendants.

While the 20 banks where the Shell companies operate accounts in Nigeria are the respondents.

The applicant filed the suit through its legal representative, Kemi Pinheiro (SAN), who led six other SANs, including Mike Ozekhome and Dapo Olanipekun.

The application is seeking to recover the cash equivalent of more than 16 million barrels of crude oil allegedly diverted by the Shell companies.

The jurist directed the 20 banks to “ring-fence any cash, bonds, deposits, all forms of negotiable instruments to the value of $2.7 billion and pay all standing credits to the Shell companies up to the value into an interest yielding account in the name of the Chief Registrar of the court.”

The Court Registrar is to “hold the funds in trust” pending the hearing of the motion and determination of the motion on notice for interlocutory injunction filed before it by AITEO.

The court restrained the defendants or their agents from presenting to the banks ”any mandate or instrument for the withdrawal of any money and /or funds standing to the credit of any of the accounts” of the defendants kept/maintained “at any of the named respondent banks.”

To allow that, the court said the banks must first “ring-fence $1.2 million or its equivalent in any other official currency including but not limited to the naira and/or pound sterling being the value of the plaintiff’s 1,022,029 barrels of crude oil. The value was derived at the rate of $79.50 per barrel as stated in the Department of Petroleum Resources (DPR) letter dated 8th day of July, 2020, the court added.

Again, the court ruled that the banks should not allow that without first preserving and or ring-fencing the total sum of $2,7 million or its equivalent in any other official currency.

The sum comprises $799 million being the amount claimed to have been paid by the plaintiff to the five defendants for the acquisition of the Nembe Creek Trunk Line (NCTL)pipelines and the assets, and $389,631,877.76 claimed as having been lost by the plaintiff arising from the leakages in the NCTL and the degraded conditions of the NCTL

The rest includes $578,951,901.99 claimed as having been lost by the plaintiff arising from the crude theft/larceny in the NCTL, and $933,000,000 claimed as having been expended for the repairs of the pipelines and acquisition of the equipment including well-heads, generators and pumps as well as replacing the flow lines within the NCTL.

The judge further directed the respondents’ banks “to pay any sums of money standing to the credit of the defendants within 48 hours of the service of the order” of court into an interest yielding account in the name of the court’s Chief Registrar, who is to hold same in trust.

“Pending the hearing and determination of the motion on notice for interlocutory injunction, the respondent banks are directed to sequestrate and/or ring-fence any cash, bonds, deposits, all forms of negotiable instruments or chose(s) in the action due to or standing to the credit sum/value of the amounts stated in prayer 1,2,2 and/or 4 above,” the judge added.

When the case was mentioned for hearing on Monday, the court was informed that the defendants had filed an application seeking to discharge the order.

The presiding judge adjourned the case till February 24 for further mention.