The Nigerian government has lost the $1.7 billion claim against a multinational investment bank, JP Morgan Chase Bank over the transfer of proceeds from the sale of OPL 245 in the controversial Malabu oil deal in 2011.
In the suit, Judge Sara Cockerill ruled Tuesday that the Nigerian government couldn’t show that it had been defrauded in the case.
Nigerian 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.
In a report by Reuters, investment bank however 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.
Cockerill said that by the time of the 2013 payments, the bank was “on notice of a risk” of fraud.
“There was a risk – but it was, on the evidence, no more than a possibility based on a slim foundation,” she said.
The damages include cash sent to Etete’s company Malabu Oil and Gas, around $875 million paid in three instalments in 2011 and 2013, plus interest, taking the total to over $1.7 billion.
Nigerian military ruler Sani Abacha had awarded the offshore oilfield licence, OPL 245, to a company Etete owned in 1998. Subsequent Nigerian administrations had challenged Etete’s rights to the field over many years until a deal to resolve the impasse via a sale to Shell and Eni was struck in 2011.