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Oil Spillage: Akwa Ibom communities move to enforce N82 billion judgement debt against two oil giants

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Oil Spillage: Akwa Ibom communities move to enforce N82 billion judgement debt against two oil giants

Some oil communities in Ibeno Local Government Area of Akwa Ibom State have initiated garnishee proceedings at the Federal High Court, Abuja, against the Nigerian National Petroleum Corporation (NNPC) and Mobil Producing Nigeria Unlimited to enforce an N82 billion judgement debt.

Ibeno communities led by Obong Effiong Archianga and nine others brought the action against the NNPC and the two oil giants through their lawyer, Lucius Nwosu, a Senior Advocate of Nigeria (SAN).

They had, in their original suit, sought about N100 billion compensation for economic losses they had suffered as a result of the oil spillages caused by the defendants during exploration.

In June last year, the court ordered the international oil companies and NNPC to pay the oil communities cumulative damages of N81.9 billion over oil spillage.

The judge, Taiwo Taiwo, ordered the defendants to pay the plaintiffs within 14 days, failing which eight per cent interest would be accruable on the principal sum annually.

The judge struck out the name of the 3rd defendant, which is another subsidiary of Mobil, ExxonMobil Corporation, on the grounds that it had no blame in the issue.

Court grants request to ‘attach’ NNPC’s, Mobil’s funds at CBN, commercial banks

To enforce the judgement debt, the plaintiffs (judgement creditors) approached the court with an ex-parte application, seeking to compel the Central Bank of Nigeria (CBN) and some commercial banks to pay them the N82 billion judgement debt from the bank accounts of the debtors.

Central Bank of Nigeria on the need for a Trade Remedies Legislation
Central Bank of Nigeria (CBN)

A.O. Okeaya-Imoh and Ogwu Onoja, both Senior Advocates of Nigeria, filed the garnishee nisi proceedings, which is a preliminary judgment enforcement application, on behalf of the plaintiffs on December 15, 2021.

Ruling on the application, the judge, Mr Taiwo, ordered the attachment of funds belonging to the judgment debtors in the CBN and the various commercial banks.

Apart from the CBN, other banks affected by the order include First Bank of Nigeria Plc, Zenith Bank Plc, and Access Bank Plc. There are 19 other commercial banks ordered by the court to pay over the N82 billion judgement debt from the accounts of the plaintiffs in their custody to the aggrieved oil communities in Ibeno LGA of Akwa-Ibom State.

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“An order is hereby made directing that the garnishee nisi be served on any branch of the garnishee banks throughout Nigeria for the attachment of funds of the judgement debtor with the said garnishee banks for the purpose of satisfying the total judgement debt in the sum of N81,925,157,500.00 with interests thereon and the cost of execution in this suit,” the judge held in a certified true copy of the order obtained by PREMIUM TIMES on Friday.

Mr Taiwo went to fix a date for the garnishee (the banks) to appear before the court to show cause why the “order nisi” should not be made absolute, which would lead to the final payment of the judgement debt to the judgement creditors.

NNPC, banks kick against enforcement of judgment debt

Following the court’s order asking the banks to explain why its earlier orders should not “be made absolute”, the NNPC represented by Damian Dodo, a SAN, appeared before Mr Taiwo on January 31.

The NNPC’s lawyer argued that the court’s judgement debt of last June was being contested at the Court of Appeal in Abuja.

NNPC
NNPC

“My Lord, it’s unfortunate that steps are being taken to enforce the judgement despite a pending appeal at the Court of Appeal,” Mr Dodo lamented.

He further contended that the failure of the plaintiffs to join all the garnishee debtors to the entire proceedings was fatal to the suit’s survival.

“We urge the court to bring to an end the garnishee proceedings,” Mr Dodo prayed the court.

 

The CBN on its part contended that “the facts before the court does not support the court to proceed with granting the garnishee order absolute.

Mr Omoruwa Adediran, also a SAN, who represented the CBN, further argued that the garnishee order was not binding on government’s companies.

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He cited the recently enacted Petroleum Industry Act (PIA), which, he said, provides that the NNPC is a national oil company, and not a private firm as canvassed by the judgement creditors in their arguments.

Similarly, First Bank Nigeria Plc’s lawyer, Joy Iloh, urged the court to strike its name out of the garnishee proceedings as it was not holding the judgement debtors funds.

But in his counter-argument, the communities’ lead counsel, Mr Nwosu, said there was no pending appeal against the court’s judgement being sought to be enforced since when it was delivered last June.

He pointed out that the NNPC and Mobil were only applying for leave of court to appeal against the verdict.

“Nothing lies in your way in making the garnishee order absolute,” Mr Nwosu urged the court.

Recounting the ordeals of oil producing communities in the Niger Delta who grapple with the havoc of environmental degradation, Mr Nwosu said the activities of the judgement debtors (NNPC and Mobil) had completely destroyed the Ibeno communities.

“We are not going after statutory funds or taxpayers’ money, but a piece of cake that is being baked in our land,” the Mr Nwosu argued.

He informed the court that the CBN and First Bank Plc had both agreed that they have the NNPC’s funds for garnishee proceedings.

“First Bank Plc has admitted that it has N153 million standing to the credit of the judgement debtor,” the plaintiffs lawyer said.

The court has now fixed February 28 to deliver its ruling.

Backstory

In his verdict last June in a joint suit filed by the aggrieved oil producing communities, Mr Taiwo held that Mobil, the American oil company, and the NNPC were negligent in the way they handled oil spills that caused environmental degradation in the communities.

Specifically, Mr Taiwo took umbrage at the NNPC for being interested in revenue generation from the oil exploration at the expense of the lives of the people in the communities.

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The judge said he believed the oral and documentary evidence adduced by the plaintiffs to support their claims that lives were made miserable for them when their water and land were polluted through crude oil leakages from old oil pipelines.

Mr Taiwo noted the claims of Mobil that it did clean up exercise and held that the oil giant failed to address the compensation that would have mitigated the economic losses of the people said to be mainly fishermen and farmers.

He held that the oral and documentary pieces of evidence produced by Mobil Company were not in any way helpful to the court as they were targeted at serving predetermined interest.

The judge further said that some of the witnesses should not have come to the court at all going by the discrepancies in the documents brought to the court, adding that they only embarked on guess research that was not reliable.

He further held that both Mobil and NNPC were negligent by their failure to visit places of the leakages of the crude oil that led to the contamination of rivers and creeks.

The court rejected the claims of the Mobil’s joint venture partner, NNPC, that the suit was statute barred in 2012 when it was filed by the aggrieved plaintiffs.

The NNPC had claimed that the suit was not filed within 12 months by the plaintiffs as required by the provision of Section 12(1) of the NNPC Act, 2004.

However, the judge held that the suit had to do with fundamental rights that cannot be rendered impotent by the statute of limitation.

He stated further that Section 11(5) of the Oil Pipeline Act made it mandatory for oil companies to monitor and repair their pipelines to avoid spillages and environmental degradation.

As a result of this, the judge awarded N42.8 billion as damages for intangible losses, N21.9 billion for special damages as annotated, and N10 billion as general damages

 

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