A London high court has begun to hear a lawsuit launched by Nigeria against U.S. bank JP Morgan Chase, claiming more than $1.7 billion for its role in a disputed 2011 oilfield deal.<\/p>\n
The civil suit filed in the English courts relates to the purchase by energy majors Shell and Eni of the offshore OPL 245 oilfield in Nigeria, which is also at the centre of ongoing legal action in Italy.<\/p>\n
A panel of judges in Milan acquitted the companies and executives, who all denied any wrongdoing, of bribery last March. Prosecutors have appealed the ruling.<\/p>\n
In the court documents pertaining to the London case, Nigeria alleges JP Morgan was \u201cgrossly negligent\u201d in its decision to transfer funds paid by the energy majors into an escrow account to a company controlled by the country\u2019s former oil minister Dan Etete instead of into government coffers.<\/p>\n
The trial opened Wednesday with details of the claim by Nigeria\u2019s lawyer, Roger Masefield.<\/p>\n
JP Morgan will present its defence early next week. The trial will end on April 7 and a judgment will likely take several months.<\/p>\n
In court, Masefield said Nigeria\u2019s case rested on proving two key points: there was a fraud and JP Morgan was aware of the risk of fraud.<\/p>\n
He said JP Morgan had breached its duties.<\/p>\n
\u201cThe evidence of fraud is little short of overwhelming,\u201d Masefield told the court.<\/p>\n
\u201cUnder its Quincecare duty, the bank was entitled to refuse to pay for as long as it had reasonable grounds for believing its customer was being defrauded.\u201d<\/p>\n
Quincecare is a legal precedent whereby the bank should not pay out if it believes its client will be defrauded by making the payment.<\/p>\n
JP Morgan\u2019s London offices deal with business for Europe, Middle East and Africa, including Nigeria.<\/p>\n
A spokesman for the bank in a statement to Reuters said it was \u201cconfident that it acted appropriately in making these payments\u201d and said the bank would \u201crobustly defend against this claim\u201d.<\/p>\n
The damages sought include cash sent to Etete\u2019s 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.<\/p>\n
The Nigerian government at the time asked JP Morgan to make these transfers as part of the oilfield sale, court documents show.<\/p>\n
The London case dates back to 1998 when Nigerian military ruler Sani Abacha awarded the offshore oilfield licence, OPL 245, to a company Etete owned.<\/p>\n
The $20 million price tag \u2013 of which Etete paid about $2 million, according to court documents \u2013 was widely viewed by industry experts as too low given the block was expected to yield billions of dollars of crude, although it remains undeveloped.<\/p>\n
Subsequent Nigerian administrations contested Etete\u2019s rights to the field, triggering years of legal wrangling until a deal designed to end the battles was struck in 2011.<\/p>\n
Etete\u2019s company Malabu Oil and Gas handed the undeveloped OPL 245 back to Nigeria as part of a resolution agreement involving Shell and Eni.<\/p>\n
To complete the deal, Shell and Eni paid a signature bonus of about $200 million directly to the Nigerian government and then deposited $1.1 billion in the Nigerian government\u2019s escrow account with JP Morgan, court documents show.<\/p>\n
Etete\u2019s lawyers did not comment on the trial as Etete is not a party in this suit.<\/p>\n
Shell and Eni are also not parties to the London law suit and declined to comment.<\/p>\n","protected":false},"excerpt":{"rendered":"
A London high court has begun to hear a lawsuit launched by Nigeria against U.S. bank JP Morgan Chase, claiming more than $1.7 billion for its role in a disputed 2011 oilfield deal. The civil suit filed in the English courts relates to the purchase by energy majors Shell and Eni of the offshore OPL […]<\/p>\n","protected":false},"author":9,"featured_media":153401,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_override_bookmark_settings":[],"jnews_override_counter":[],"footnotes":""},"categories":[16587],"tags":[30955,20662,30954,303,8030],"class_list":["post-153387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-1-7b-claims","tag-chase","tag-jp-morgan","tag-nigeria","tag-sues"],"yoast_head":"\n