Malabu: Is FG stopped from pressing charges?

By Abubakar D. Sani

The Federal Government has reportedly charged some senior officials of oil giants Shell and Agip, along with two former ministers – Dan Etete and Mohammed Bello Adoke – some Nigerian companies, including Malabu Oil Co. Ltd., as well as the multinational companies themselves, with corruption arising from the payment of over $1billion in connection with Oil Prospecting Licence (OPL) 245. This is the second of such charges, an earlier set, under the Money-Laundering Act, having been filed against the same defendants – with the exception of Shell, Agip and their said officials – in December 2016. The current charges were brought under the Independent Corrupt Practices and other Related Offences Act 2000.

However, it has since emerged that an agreement made in November, 2006 by FG through a former Minister of State for Petroleum Resources under the Obasanjo regime, Dr. Edmund Daukoru, explicitly gave Malabu exclusive beneficial interest in and the right of disposal over the said oil block. In return for certain concessions by Malabu, the FG categorically restored Malabu’s pre-existing title to the block, in addition to foreswearing all further claims to the block. What is the legal effect of the agreement? Does it invalidate the charges and/or the purported revocation of the oil block by the FG? The issues are analysed in this piece.

Before going further, however, it is essential to appraise the said agreement. It was made on the November 3, 2006 between Malabu and the FG, and signed on behalf of the FG by Dankoru; it is in respect of OPL 245, whose disposal by Malabu is the subject matter of the criminal charges filed by FG against Shell, Agip, Malabu, et al.
Legal Effect of the Settlement Agreement
It can be seen that the agreement by the Federal Government to re-allocate OPL 245 to Malabu was subject only to two conditions:
i.the payment by Malabu of signature bonus in the sum of US$207,960,000; and
ii. the withdrawal of Malabu’s case against the FG at the Court of Appeal.

In return, Malabu was granted full proprietory rights over the block – including the right to dispose of or alienate it. It is important to emphasize these conditions because, in my view, the validity of the Federal Government’s present position – including the criminal charges – depends wholly on their legal implication. In other words, it depends, in my view, on whether Malabu paid the signature bonus and withdrew its said appeal.

These, in my view, are the absolute minimum conditions precedent to Malabu making a successful claim for the enforcement of the terms of the agreement and, more importantly, for defeating any criminal charges allegedly arising from its disposal of the said oil block.

Assuming Malabu paid the said signature bonus and withdrew its appeal against the FG, I believe the latter is estopped not only from continuing to stake any claim to OPL 245, but – at least from the perspective of the defendants in the criminal charges – from denying that Malabu had the exclusive legal right to dispose of the block. In other words, the Federal Government is estopped from asserting that the divestment by Malabu from OPL 245 and US1.1 billion paid for it by Shell and Agip were criminal or unlawful – the very essence of the charges laid by the FG in connection with it.

What is Estoppel?
The law on estoppel in Nigeria is codified in Section 169 of the Evidence Act 2011; it provides: “When one person has either by virtue of an existing court judgment, deed or agreement, or by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief neither he nor his representative in interest shall be allowed, in any proceedings between himself and such person or such person’s representative in interest, to deny the truth of that thing.”

Of the four kinds of estoppel under Nigerian law (see OYEROGBA vs. OLAOPA (1998) 12 CNJ 122), I believe that by virtue of the said agreement of November 3, 2006 one of them, estoppel by deed or estoppel by conduct, applies to the relationship between FG and Malabu and its privies (the other defendants in the criminal charges) vis-à-vis OPL 245. I believe that the conditions laid down by the apex court, for the application of the principle in a plethora of cases, exist in this case.

This is because, where one party (FG) has by his words or conduct made to the other (Malabu) a promise or assurance (the said agreement) which was intended to affect the legal relations between them and to be acted on accordingly, then once the other party has taken him at his words and acted on it (in this case by Malabu paying the signature bonus and withdrawing its appeal), the law will not allow the one who gave the promise (FG) afterwards to revert to their previous positions as if no such promise or assurance had been made by him. See ATT-GEN. BENDEL vs ATT-GEN FED. (1981) 10SC Reprint, pg. 1

As long as Malabu complied with the terms of its agreement in respect of OPL 245 by paying the signature bonus of US$207,960,000 in addition to withdrawing her appeal against the FG at the Court of Appeal, it would be unconscionable and inequitable for the FG to behave as if it never made the said agreement. Accordingly, the FG cannot now disown the promise it made to Malabu in the agreement, i.e., that the latter was at liberty to assign OPL 245 or any part thereof.

I believe that it is in this light that the receipt by Malabu of US$1.1 billion from Shell/Agip – through the FG’s own escrow account operated by the Federal Ministry of Justice – must be viewed. If that is done – as I submit forcefully it should be – the irresistible conclusion would be that the charges filed by the FG in connection with the said payment are untenable and invalid. Dr. Daukoru is currently a traditional ruler in Bayelsa State; he has not denied executing the agreement on behalf of the FG.
No court will permit a party to resile from an otherwise valid and binding agreement simply because he or she is no longer comfortable with it.

Sani wrote via [email protected],

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