As Shell Finally Agrees to Pay Ogoni Communities N45.9bn

After 31 years of legal tussle, Shell Petroleum Development Company may have decided that it has had enough by agreeing to pay N45.9 billion compensation to some Ogoni communities ravaged by oil spillage some years ago, Alex Enumah writes

Finally, Shell Petroleum Development Company (SPDC) on Wednesday agreed to pay the N45.9 billion awarded to the Ogoni people as compensation for oil spills in their communities.
The decision was sequel to an order by Justice Ahmed Mohammed of a Federal High Court in Abuja which gave the oil exploration giant a 21-day ultimatum to pay the judgment sum awarded against it several years ago for oil spills in the area.

When the case came up before the court on Wednesday, counsel to Shell, Aham Ejelamo, informed the court that his client had agreed to make the payment. He proposed that the money be paid through the Registrar of the court in a bank about to be opened for the purpose.

But Justice Mohammed ruled against the request and ordered that the payment be made within the period given through the account of the lawyer to the Ogoni people, Mr. Lucius Nwosu. He explained that this was in line with the decision of both the High Court and the Supreme Court.
The judge explained that it would amount to burying the judgment of the apex court to rule otherwise.

Recall that the Supreme Court had for the second time last December, dismissed Shell’s application seeking to set aside the judgment given against it on January 11, 2019, over a 1970 oil spill in a community in Rivers State.

A five-man panel of the court in a unanimous ruling dismissed Shell’s application as lacking merit.
Justice Centus Nweze who wrote the lead ruling in the case, marked: SC/731/2017, which was read by Justice Samuel Osuji, agreed with the respondents, Ejama-Ebubu in Tai Eleme Local Government Area of Rivers State, that Shell’s application was an invitation to the court to overrule itself.

The judge said after a thorough examination of the briefs filed by parties, he elected to uphold the preliminary objection raised by the respondents (victims of the oil spill, led by Chief Isaac Osaro Agbara). He, therefore, dismissed the application and ordered parties to bear their respective costs.

The same court in a ruling on January 11, 2019, first dismissed the appeal by the oil exploration giant an earlier decision of the Court of Appeal on a June 14, 2010 judgment of the Federal High Court, which awarded damages against the company.

Arguing the preliminary objection on September 22, respondents’ lawyer, Lucius Nwosu (SAN), queried the jurisdiction of the Supreme Court to entertain Shell’s application, which he said was intended to make the apex court sit on an appeal over its decision. Nwosu contended that Shell’s application was an abuse of court process because there was no longer a pending appeal on which it wanted the court to act. He noted that, on learning about Shell’s fresh application, his clients wrote the Chief Justice of Nigeria (CJN) to enquire about the status of the oil company’s appeal.

Nwosu said in a reply, dated February 14, that the CJN’s response showed that Shell’s appeal, “is a spent appeal. If the CJN has said the appeal is spent, how can the same appellant come and revive the spent appeal?”

The lawyer, who said his clients had taken steps to execute the judgment, added that the same Shell, which was reluctant to compensate victims of its oil spills in Nigeria, had paid about $206 million damages in similar circumstance in Mexico. He regretted that Shell was unwilling to abide by the decision of Nigeria’s apex court after subjecting the victims to over 30 years of strenuous litigation in courts across the country.

The substantive suit commenced in 1991 before a Rivers State High Court sitting at Nchia Division, when the Ejama community represented by Isaac Osaro Ogbara, Victor Obari, John Oguru, Joseph Ogusu, G. O. Nnah, George Osaro, and Adanta Obelle, sued Royal Dutch Shell Plc, Netherlands, Royal Dutch Shell Plc, United Kingdom, and SPDC over alleged oil spills which occurred when the oil exploration giant operated in the community in 1970s. Judgment was entered for the sum of N6billion in favour of the community by the Nchia High Court. That judgment was conceded on appeal because the Supreme Court had in a sister case decided that states High Court had no jurisdiction in oil related-matters.

The plaintiffs in 2001 refiled the suit at the Federal High Court in Port Harcourt.
After listening to the submissions of the parties in the suit, the presiding judge, Justice Ibrahim Buba, in his judgment in 2010, awarded N17 billion to the representatives of the Ogoni people. The court equally granted the Ogoni chiefs 25 per cent interest charge on the principal sum of about N17 billion.

SPDC then appealed against the judgment and applied for a stay of execution of the judgment pending the appeal. As a condition for granting the stay of execution, the court required Shell’s bankers, FirstBank, to provide a guarantee of the judgment sum plus interest.
This condition was complied with. But Shell’s appeal failed on merit because it failed to file a brief of argument in support of their appeal. Instead it claimed that they were granted leave to file an amended brief of argument, which the Court of Appeal found not to be correct.

Against the agreement reached, Shell proceeded to the Supreme Court where its new lawyers filed a fresh application asking for leave to amend the original notice of the appeal filed by Olawale Akoni (SAN) at the Port Harcourt Division of the Court of Appeal registry in order for them to argue fresh points not raised at the court below and in order for them to argue 36 additional grounds of appeal.
Upon the new application at the apex court, the respondents’ lawyer, led by Lucius Nwosu (SAN), filed a preliminary objection. Assisted by Lawal Rabana (SAN) and others, Nwosu argued that the findings of the Court of Appeal dismissing their appeal were based on facts, adding that the law is that an appeal must arise out of the decision complained against. He stated that if the decision complained against was based on findings of fact, the constitution requires that you cannot appeal them except you first seek leave of the Court of Appeal.

The respondents’ lawyer contended that since that notice of appeal at the Court of Appeal was filed without leave, it meant that the notice was incompetent and cannot be amended because it would mean putting something on nothing and expecting it to stand.

Justice Kumai Bayang Akaahs who read the ruling on behalf of other justices led by the then Chief Justice of Nigeria, Justice Walter Onnoghen, said the notice of appeal filed by the oil giant was incompetent. He said motion filed on July 16, 2018 had no leg to stand on it ought not to have been filed and dismissed it in its entirety.

But Justice Akaahs citing a plethora of authorities to back up his submission, held that since the notice of appeal filed by Shell sought to be amended was incompetent, no valid amendment could be effected because issues of fact or mix law and fact were raised in the original notice of appeal with leave of court.

The Supreme Court justice agreed with the submission of Shell’s lawyer that an appellant who has a valid and subsisting appeal can seek the leave of court to do so, adding that in the instant case, there is no such valid notice of appeal that could be amended.

However, while the case was still pending at the apex court, sensing that Shell was using delay tactics to prevent FirstBank from paying the judgment creditors the N17 billion judgment debt, in December 2017, they commenced garnishee proceedings at the Federal High Court in Owerr,i presided over by Justice Lewis Allagoa. They urged the CBN to pay them N122.53 billion out of FirstBank’s account in its custody.

THISDAY gathered that they calculated the principal sum of N17 billion and the accrued 25 per cent interest charge per annum to arrive at the sum of N122,533,403,392. In January 2018, Justice Allagoa granted them a temporary order (garnishee nisi) ordering the CBN to pay them the sum from FirstBank’s account with it.

But the CBN asked the court not to make absolute the temporary garnishee order. The apex bank’s lead counsel argued that compelling the CBN to pay the N122.53 billion from FirstBank’s funds domiciled with it could have far-reaching consequences for Nigeria’s oldest and one of its biggest lenders by assets and deposits, and a systemic impact on the rest of the financial system and wider economy.
However, Justice Inyang Ekwo of the Federal High Court in Abuja on March 2, 2020, made an order absolute. By the order made by Justice Ekwo, the CBN Governor was to order the release of the judgment sum from the account of First Bank.

But Shell in a swift reaction to the Supreme Court verdict had seriously disputed the amount. The oil giant said the ruling of the apex court did not decide liability or the size of the award, which the Ogoni communities had noted stood at about N182 billion with the accrued interests.
THISDAY gathered that seeing that the Supreme Court, which is the highest court in the country, has ruled against it on two occasions, the fact the amount has been considerably reduced, SPDC agreeing to pay the sum of N45.9 billion as ordered by the court, could mean that a permanent solution to amicably resolve the dispute had been reached.