The Nigerian Maritime Administration and Safety Agency,NIMASA, has responded to a query issued by the Nigerian Senate over its propriety in the disbursement of $5m as legal fees in respect of a suit instituted against some International oil Companies (IOCs) by the Federal Government in November 2013.
Following a steady decline in its hydrocarbon exports revenue due to ineffective monitoring , the Office of the Attorney General of the Federation had on the directive of the Presidency , directed the Nigerian Maritime Administration and Safety Agency to Institute legal action against the affected IOCs who were involved both in under declaration and under remittance of crude oil exports. According to official sources at the Agency,upon the strength of the said approval, on January 29 , 2014 , NIMASA hired a consortium of Five Legal Firms based in the United States of America to handle the brief.
An official memo from NIMASA on the controversy surrounding the engagement of the legal team and the circumstances under which an initial fee of $5m was disbursed explained that ‘Government of Nigeria had consistently recorded a decline in its Hydrocarbon exports revenue due to ineffective monitoring of hydrocarbon shipments by the International Oil Companies (IOCs). Consequently, the FGN became interested in tracking the global movement of Nigeria’s Hydrocarbon and recover lost revenue.
Sometime in 2013, the Honourable Attorney – General of the Federation and Minister of Justice by a letter dated 29th November 2013, conveyed to the Nigerian Maritime Administration and Safety Agency (the Agency) the approval of the President of the Federal Republic of Nigeria, dated 19th day of November 2013, for the engagement of Technical Experts and Legal Team to provide intelligence gathering based tracking of Nigeria’s Hydrocarbon and also recover revenue lost by the Federal Government of Nigeria.’ The memo further explained that
‘In furtherance of realizing the objective, the Honourable Attorney – General of the Federation and Minister of Justice in that letter of 29th day of November 2013, conveyed to the Agency, the President’s approval of the appointment of a Legal Team, retained to provide legal services and representation for and in relation to the intelligence-based tracking and gathering of global movement of Nigerian Hydrocarbon and Recovery of Revenue lost by the Federal Government.
The Agency on the 24th day of January 2014, conveyed the approval of the President to the Legal Team/Retained Counsel of their collective appointment/engagement as conveyed to the Agency by the Honourable Attorney General of the Federation and Minister of Justice.
Consequently, the Federal Government of Nigeria, represented by the Agency, by a retainership agreement, retained the services of a Legal Team comprised five (5) Law Firms with three (3) Senior Advocates and other lawyers as well as a Technical Team. The current Honourable Attorney-General under his hand, increased the Legal Team to Seven (7) Law Firms to work with the Technical Team based in Houston United States to prosecute the matters in Court. The effective date of the appointment of the Legal Team was 29th day of January 2014, covering an initial period of 10years.
The Legal team was paid Professional/ legal start-off fee of US5,000,000 (Five Million US Dollars) (NGN741,904,761.28 at an exchange rate of NGN164 to a USD as of the date) which formed part of the legal fees and costs due to the Legal Team and deductible from the payment due to the Legal Team/Retained Counsel upon the conclusion of the Project, the memo further explained
‘The Agency is aware the Legal Team had filed several suits which are at various stages, both at the Federal High Court and the Court of Appeal. Some of the suit pending at the Federal High Court and the Court of Appeal (Lagos Division) are as follows:
SUIT NO. FHC/L/CS/318/2016 – FEDERAL GOVERNMENT OF NIGERIA V CHEVRON NIGERIA LTD & ANOR.
SUIT NO. FHC/L/CS/359/2016 – FEDERAL GOVERNMENT OF NIGERIA V TOTAL E & P NIGERIA LTD
SUIT NO. FHC/L/CS/339/16 – FEDERAL GOVERNMENT OF NIGERIA V SHELL WESTERN SUPPLY AND TRADING LTD & SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LTD – Alleged crude oil theft: Court to hear $406.7m case against Shell;
SUIT NO. FHC/L/CS/1748/16 – FEDERAL GOVERNMENT OF NIGERIA V. CNOOC EXPLORATION & PRODUCTION NIGERIA LTD
SUIT NO: FHC/L/CS/1465/17 – FEDERAL GOVERNMENT OF NIGERIA V. STAR DEEP WATER PETROLEUM LTD
APPEAL NO: CA/L/PRE/ROA/353MI/2020 – CHEVRON PETROLEUM NIG. LTD V FEDERAL GOVERNMENT OF NIGERIA
APPEAL NO. CA/L/54/18 – FEDERAL GOVERNMENT OF NIGERIA V TOTAL E & P NIGERIA LTD
APPEAL NO. CA/LAG/CV/825/19 – FEDERAL GOVERNMENT OF NIGERIA V NIGERIA AGIP OIL COMPANY LTD
APPEAL NO. CA/LAG/CV/824/2019 – FEDERAL GOVERNMENT OF NIGERIA V BRASOIL OIL SERVICES COMPANY NIGERIA LTD
APPEAL NO: CA/LAG/CV/215/2022 – FEDERAL GOVERNMENT OF NIGERIA V CNOOC EXPLORATION & PRODUCTION NIGERIA LTD
The Agency is also aware that an Arbitral Award was also obtained against one of the oil companies in favour of the FGN (NNPC/ NPDC) in the sum of USD1.69 Billion as well as got recognition and enforcement order in the Judgment in favour of the FGN (NNPC/ NPD in SUIT NO. FHC/L/CS/947/2019 – NIGERIAN PETROLEUM DEVELOPMENT CO. LTD V ATLANTIC ENERGY DRILLING CONCEPTS NIG. LITD & ANOR on the basis of KPMG forensic report.
The FGN through NIMASA and the office of the Honourable Attorney-General of the Federation, the memo said ,is being provided with periodic updates on these matters and that NIMASA is also closely monitoring the proceedings which, the Agency said,have so far been satisfactory.
Recall that the upper chambers of the National Assembly had threatened to issue a bench warrant on the Director General of the Nigerian Maritime Administration and Safety Agency, NIMASA for failing to honour an inviting the CEO of the Agency for failing to explain payment of $5m as legal fees in respect to the said suits against the IOCs.