Aiteo is said to owe the parties in
question about $2 billion which was used to purchase Nigerian Oil Assets
including Shell’s OPL 29. The loans date back to 2014 most of which came from
the AFC and Nigerian Banks (75%). Shell put up the rest via a vendor facility.
This is according to a report from Premium
Times citing court documents approving a “final anti-suit injunction” which was
delivered on the first of April 2022.
What happened
According to Nairametric’s understanding of
the case, Aiteo planned to take its lenders to court seeking to block an
interim anti-suit injunction pushed by the lenders restraining Aiteo from a
legal action that will affect an ensuing arbitration.
The banks had in 2019 requested that Aiteo
repay the loans within 7 days. However, Aiteo declined, stating it was not
liable to repay the loan.
Aiteo then took the lenders to court
pleading for the court to declare that it was not liable to the demands of the
lenders.
Aiteo had wanted a Nigerian High Court to
declare a non-liability stopping the lenders from seeking arbitration in London
over the debts.
Aiteo was basing its arguments on a Force
Majeure which had forced it to restructure the facility but that the lenders
did not agree to honour its request. And that since the lenders did not agree
to restructure the facility then there was no default.
Subsequently, it got an injunction from a
Federal High Court restraining the banks from taking legal action. The banks
appealed but did not get a reprieve from a local court mostly due to Covid-19 induced
delays to proceedings,
After protracted negotiations and legal
actions failed to resolve the matter, the lenders proceeded to arbitration.
UK court ruling
Ruling on the matter, the judge noted that
the suit by Aiteo seeking a declaration that it was not liable was a breach of
the arbitration agreement in the Onshore Facility Agreement.
The judge also said continuing the
proceeding amounted to a breach of the arbitration agreement in the Offshore
Facility Agreement.
The judge who also noted that the appellate
court in Nigeria had dismissed Aiteo’s application seeking a restraining order
on the lenders from commencing the arbitration suit said “That dismissal sits
unhappily with the suggestion that the Lender’s Notice of Appeal had caused the
Lenders to have lost their right to arbitrate.”
The court noted that since the right to
arbitrate had not been waived regarding the Offshore Facility Agreement, the
decision is binding on Aiteo which means it remained in breach of the
arbitration agreement in the Offshore Facility Agreement in December 2020.
Consequently, the judge declared that
“Thus, there is in the present case a clear case of a breach of the agreements
to arbitrate. The court will in such a case grant an anti-suit injunction
unless there are strong reasons for not doing so,”
On April 1, the high court in England
granted the final anti-suit injunction sought by the claimants who are the
lenders.
Which means Aiteo has been restrained by
the court from taking any legal action against the lenders pending the
determination of the suit against Aiteo.