“An escrow account is being set up as part of an out of court settlement agreement for an oil & gas asset in the Republic of Nigeria. An approximate amount of$1.1Bn will be placed in the account. JPMC is a counterparty to this account and will hold this cash in escrow until the outcome of the out of the court action is announced and payment is made to the FGN. ….”
“The position of Dan Etete as Minister of Petroleum at or in period leading up to award of OPL 245 creates suspicion that the payment of$1,092,040,000 is the ultimate proceeds of corruption from Sani Abacha rule.”
“a banker must refrain from executing an order if and for so long as the banker is ‘put on inquiry’ in the sense that he has reasonable grounds (although not necessarily proof) for believing that the order is an attempt to misappropriate the funds of the company.”
“whether, if a reasonable and honest banker knew of the relevant facts, he would have considered that there was a serious or real possibility, albeit not amount to a probability, that its customer might be being defrauded.”
“The purpose of that duty is to protect the company against just the sort of misappropriation of its funds as took place here. By definition, this is done by a trusted agent of the company who is authorised to withdraw its money from the account.”
“one aspect of a bank’s overall duty to exercise reasonable skill and care in the services it provides.”
“the reconciliation of the conflicting duties owed by the bank to which Steyn J referred in Quincecare will require something more from the bank than simply deciding not to comply with a payment instruction.”
“The purpose of that duty is to protect the company against just the sort of misappropriation of its funds as took place here. By definition, this is done by a trusted agent of the company who is authorised to withdraw its money from the account.”
“[27] … That reasoning, … leads to the conclusion that despite the importance of the bank’s duty to execute orders promptly, nevertheless the bank does indeed have another duty which operates in tension with that primary duty, such that the bank may be required to refrain from executing an order if and for so long as the circumstances would put an ordinary prudent banker on inquiry. What that amounts to is the existence of ‘reasonable grounds for believing that the order was an attempt to misappropriate funds’ (per Lady Hale in Singularis paragraph 1) … [76] … the right way of looking at this case is that the Quincecare duty is not limited to agents but applies in any case in which the bank is on inquiry that the instruction is an attempt to misappropriate funds.”
“Everything will no doubt depend on the particular facts of each case. Factors such as the standing of the corporate customer, the bank’s knowledge of the signatory, the amount involved, the need for a prompt transfer, the presence of unusual features, and the scope and means for making reasonable inquiries may be relevant. But there is one particular factor which will often be decisive. That is the consideration that, in the absence of telling indications to the contrary, a banker will usually approach a suggestion that a director of a corporate customer is trying to defraud the company with an initial reaction of instinctive disbelief…. [I]t is right to say that trust, not distrust, is also the basis of a bank’s dealings with its customers. And full weight must be given to this consideration before one is entitled, in a given case, to conclude that the banker had reasonable grounds for thinking that the order was part of a fraudulent scheme to defraud the company.”
“The principal obligation is on the bank to honour its customers’ cheques in accordance with its mandate on instructions. There is nothing in such a contract, express or implied, which could require a banker to consider the commercial wisdom or otherwise of the particular transaction. Nor is there normally any express term in the contract requiring the banker to exercise any degree of care in deciding whether to honour a customer’s cheque which his instructions require him to pay. In my opinion any implied term requiring the banker to exercise care must be limited. To a substantial extent the banker’s obligation under such a contract is largely automatic or mechanical. Presented with a cheque drawn in accordance with the terms of that contract, the banker must honour it save in what I would expect to be exceptional circumstances.”
“Steyn J recognised that this particular duty of care has to be carefully calibrated to reflect the fact that the duty of care is counteracting the receipt by the bank of what appears to be a valid and proper order which it is prima facie bound to execute. In other words, the duty of care runs counter to the bank’s standard contractual duty to comply with a valid order of the customer. In line with this, Steyn J was at pains to make clear that the standard of care imposed should not place too onerous a burden on banks.”
“The question must be whether, if a reasonable and honest banker knew of the relevant facts, he would have considered that there was a serious or real possibility, albeit not amounting to a probability, that its customer might be being defrauded, or, in this case, that there was a serious or real possibility that Cass was drawing on the client account and using the funds so obtained for his own and not the solicitors' or beneficiaries' purposes. That, at least, the customer must establish. If it is established, then in my view a reasonable banker would be in breach ... if he [continues] to pay ...’ ‘...in the present case, the inquiry is simply whether Mr Fox, and therefore the bank, had, on the basis of the facts and banking practices established at the time, reason to believe that there was a serious possibility that Cass was misusing his authority to sign under the mandate in order to obtain and misapply the cash ....”
“it is a duty on a bank to refrain from executing a customer’s order if, and for so long as, the bank is ‘put on inquiry’ in the sense that the bank has reasonable grounds for believing - assessed according to the standards of an ordinary prudent banker - that the order is an attempt to defraud the customer.”
“the courts of this country will recognise, and will not question, the effect of an act of a foreign state’s executive in relation to any acts which take place or take effect within the territory of that state.”
“It is the difference between citing a foreign statute (an act of state) for what it says (or even for what it is disputed as saying) on the one hand, something which of course happens all the time, and on the other hand challenging the effectiveness of that statute on the ground, for instance, that it was not properly enacted, or had been procured by corruption, or should not be recognised because it was unfair or expropriatory or discriminatory. As to the last possibilities, there can be a still further distinction to be made between the act of state which cannot be challenged for its effectiveness despite some alleged unfairness, and the act of state which is sufficiently outrageous or penal or discriminatory to set up the successful argument that it falls foul of clear international law standards or English public policy and therefore can be challenged.”
“The rule [that courts in this jurisdiction will not adjudicate or sit in judgment on the lawfulness or validity under its own law of an executive act of a foreign state, performed with the territory of that state] also has a sound basis in principle. It is founded on the respect due to the sovereignty and independence of foreign states and is intended to promote comity in inter-state relations.”
“The difficulty with this submission, in my judgment, is that, whereas sovereign immunity is capable of being waived, the principle of act of state or non-justiciability is not. If the court lacks jurisdiction to determine an issue, such jurisdiction cannot be conferred upon it by the parties.”
“[i]t may not be easy to generalise about such acts, and the application of the principle may be fact sensitive …the rule whereby there is a principle of judicial restraint in so far as a sovereign acts within his territory is only a prima facie rule.”
“Whatever the formal ownership structure of Malabu, all of the sources to whom we have spoken are united in the opinion that Dan Etete is the owner of the company”
“the fact that Etete bribed one Attorney General in 2006 in respect of an attempt to cash out of OPL 245 by way of a purported settlement lends support to the FRN’s case that he bribed another one in 2011 in relation to the very same asset by way of purported settlement. Likewise Ojo’s attempts to provide a veneer of plausibility for his$10m pay-off, through the backdated Legal Advisory Mandate and so-called ‘escrow’ arrangement with Petrol Service, is highly relevant to the 2011 and 2013 Payments.”
“DPR should accept the advice of the Honourable Attorney-General and participate in the discussion on how to settle the case out of court”; iii) That conclusion is actually echoed by JPMC’s expert Justice Uwaifo (citing the same (Zebra) case) thus: “… the High Court erred in law by dismissing Malabu’s claim on the basis of [limitation], when it was bound by the Supreme Court’s decision in FGN v. Zebra Energy … In my opinion therefore, the 2006 Settlement Agreement involved Malabu giving up a valuable right, namely its appeal proceedings which it was likely to win. The 2006 Settlement Agreement was a valid and binding contract, supported by valuable consideration on the part of Malabu in the form of the withdrawal of Malabu’s appeal.”
“Notwithstanding that each licence called for payment of the signature bonus within 30 days, few, if any, awardees paid within the stipulated time and in no case did the FGN revoke an ICP licence for non timely payment or performance of any non-monetary obligation. The awardees were very often unable to fund the payment of the signature bonus from their own resources and relied upon their foreign technical partners for funds with which to pay the signature bonus. The FGN knew and indeed expected ICP awardees to pay signature bonuses from their foreign partner's resources.”
“there were points where I couldn’t pick up my phone because I was just getting calls from Mr Kifasi or Mr Adoke. They were – there were not happy at the delay”
"A builder and developer whom I had been acquainted with for a long time"
“You are also aware that even though ... you had charged our client with receiving gratification in the sum of N300m from Mr Aliyu Abubakar on account of OPL 245, your witnesses, including the EFCC investigator, later admitted in sister proceedings at the Federal High Court that the said N300m was not gratification from the Malabu transactions, but the refund of a loan taken by our client from Unity Bank to purchase a house from Mr Abubakar ... The evidence before the court is that Mr Abubakar later sold the same property to the Central Bank of Nigeria when our client could not pay the balance of N200m. Your witnesses even produced documents to prove the loan/mortgage transaction and further testified that the N300m refunded by Mr Abubakar had been used to repay the Bank loan and extinguish the mortgage.”
“‘Gross’ negligence is clearly intended to represent something more fundamental than failure to exercise proper skill and/or care constituting negligence. But, as a matter of ordinary language and general impression, the concept of gross negligence seems to me capable of embracing not only conduct undertaken with actual appreciation of the risks involved, but also serious disregard of or indifference to an obvious risk.”
“the two cannot be intended to have the same meaning” (Roth J in Winnetka), As Henshaw J said at [292] in Toucan “Gross negligence goes beyond mere lack of reasonable care”
“English lawyers have always had a healthy disrespect for the latter distinction. In Hinton v. Dibbin (1842) p 2Q.B. 646 Lord Denman C.J. doubted whether any intelligible distinction exists; while in Grill v. General Iron Screw Collier Co. (1866) L.R. 1 C.P. 600, 612 Willes J. famously observed that gross negligence is ordinary negligence with a vituperative epithet.”
“‘gross negligence’ is not the same as subjective recklessness, although it may come close to it”. ii) Khuller v First International Trustees Limited [2020] GCA 051 “the test of what is gross negligence can be characterised as ‘jaw-dropping’ negligence. The test applied by the Royal Court, as explained above, was less colourful in language but to similar effect: serious or flagrant negligence, which can embrace serious disregard of or indifference to an obvious risk.”
“what is mandatory is that the jury are assisted sufficiently to understand how to approach their task of identifying the line that separates even serious or very serious mistakes or lapses, from conduct which, to use the phrase from the above direction, was “truly exceptionally bad and was such a departure from that standard [of a reasonably competent doctor] that it consequently amounted to being criminal.”
“[Malabu’s] claims had held up the production for 13 years, and this is a way for the Nigerian government to move beyond that claim and allow the tax revenues, etc., to flow from the oil production.”
“According to documents (filed March 22, 2012) before the Supreme Court of the State of New York in the US, President Goodluck Jonathan discreetly approved the transfer of the sum of$1.1bn to Mr. Etete on April 29, 2011, two weeks after he was re-elected. The money was first paid to the Federal Government by two multinational oil companies: Nigeria Agip Exploration Limited (Agip) and Shell Nigeria Exploration and Production Company Limited (Shell) in respect of oil block OPL 245. But shortly after the funds were credited to the Federal Government's account, Mr. Jonathan ordered that it should be secretly transferred to a London account of Mr. Etete's company, Malabu Oil. It is not clear what deal Mr. Jonathan struck with Malabu, and on what basis the payment was made. President Jonathan's spokesperson, Reuben Abati did not answer or return calls seeking his comment for this story. He also did not respond to a text message sent to him for the same purpose.”
“The due diligence reports noted that Dan Etete [REDACTED] who was convicted and charged over corruption, is director and potential beneficial owner of [REDACTED]. The individual is also the subject of an alleged corrupt payment of$1.1 bn made by Shell and ENI through Nigerian government to one of his companies via JPMC Escrow account.”
“1-076 … until the right of avoidance is exercised, the contract is valid. … 1-078 Unenforceable contracts are valid in all respects except that one or both parties cannot be sued on the contract. … An unenforceable contract may be indirectly enforceable by means other than bringing an action. Thus a statute-barred debt may be recoverable indirectly if the creditor has a lien on goods of the debtor which are in his possession.”
“Under Nigerian law, if a contract is illegal, the consequence may be that the contract is void, or unenforceable by one or both parties, depending on the circumstances. Contracts expressly prohibited by statute or which on their face provide for conduct that is criminal or contrary to public policy will be ex-facie illegal, and therefore void. Contracts that are rendered illegal by their performance will not be ex-facie illegal, as the contract was not illegal when formed, but only became illegal because of the manner of its performance.”
“18-061 Where the object of a contract is the perpetration of a fraud, e.g. upon prospective shareholders in a company or upon the Government, or a trader the contract is illegal. Such frauds are usually criminal but the rule appears to be general; …Likewise it is against public policy to enforce an agreement where the purpose of both parties was to defeat the proper claims of the Commissioners of Inland Revenue or of a rating authority.”
“5.1 The duties and obligations of the Depository in respect of the Depository Cash shall be determined solely by the express provisions of this Agreement. The Depository has no knowledge of the terms and provisions of any separate agreement or any agreement relating to the Depositor’s Obligations, and shall have no responsibility for compliance by the Depositor with the terms of any other agreement, or for ensuring that the terms of any such agreement are reflected in this Agreement and shall have no duties to anyone other than the Depositor.” iii) Clause 22.11 provides: “22.11 This Depository Agreement may be enforced only by the Depository or any Depositor or such Depositor’s successors and permitted assigns.”
“Notwithstanding the foregoing provisions of this section, the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.”
“Clearly, there is a dispute here between the Government of the Federation and the Government of the littoral States. This dispute cannot by stretch of imagination be described as mere argument; it is a real dispute. And it affects the legal rights of the Federation and its constituent units as to the amount standing to the credit of each beneficiary of the Federation Account”
“By this section, once a dispute is between the Federation and a State or between the States themselves and the determination of the dispute requires resolution of any question, whether of fact or law in relation to the claim raised, this Court and no other would have judication over such matters. The section does not empower the apex Court to hear and determine disputes between the government of the federation and a state or the governments of the states inter se.” ii) Ngwuta JSC: “In my humble view, the Federal Republic of Nigeria is different and distinct from the Federal Government of Nigeria. … The dispute herein is not between the Federation and the plaintiff. It is between the plaintiff and the Federal Government of Nigeria… I think the Plaintiff had the mistaken idea that the Federal Government of Nigeria is synonymous with the Federation or Federal Republic of Nigeria.” iii) Fabyi JSC: “It is now beyond dispute that the Federation of Nigeria is distinct and separate from the Federal Government of Nigeria which often, is a product of election. On the other hand, the Federation of Nigeria remains intact for all times; all things being equal. The two are not synonymous at all.”
“… there is a clear difference between the "Federation" or "Federal Republic of Nigeria" on the one hand and "Government of the Federation" or "Federal Government." Whereas the Federation refers to the federating units comprising of all the States and the Federal Capital Territory, the Federal Government or Government of the Federation refers to the Executive arm of the Government which contrasts with the Legislative powers and judicial powers domiciled in the National Assembly and the judiciary respectively.”
“Notwithstanding the foregoing provisions of this section, the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.”
“The entire ownership and control of all petroleum in, under or upon any lands to which this section applies shall be vested in the State”. ii) The Preamble to the same Act, which appears immediately above section 1(1), which states that it is; “An Act to provide for the exploration of petroleum from the territorial waters and the continental shelf of Nigeria and to vest the ownership of, and all on- shore and off-shore revenue from petroleum resources derivable therefrom in the Federal Government and for all other matters incidental thereto.”
“In our opinion, the defence(s) available to NNPC and the Federal Government are essentially technical defence(s) like the one we have taken in this matter. If this technical defence is not upheld by the higher Courts, then NNPC and the Federal Government may be open to very substantial damage. We are particularly concerned that this defence may not be upheld having regard to the decision of the Supreme Court in FEDERAL GOVERNMENT OF NIGERIA V. ZEBRA ENERGY LTD [2002] 18 NWLR Part 798 at 162 where the Court stated in a matter with facts very similar to the Malabu case that the Public Officers Protection Act was not applicable to a matter involving inter alia ‘breaches of contract’. If the Government is mindful of settling this matter, this is the best time to do it. Currently, the Government has a good negotiating position. It has a lower court victory as an advantage.”
“K. FGN has decided to resolve its differences with SNUD amicably with respect to Block 24, L MALABU is willing to settle and waive any and all claims to any interest in OPL 245 in consideration of receiving compensation from the FGN. M. Pursuant to paragraphs K and L above, and with the full concurrence and agreement of MALABU, FGN is willing to reallocate Block 245 to Nigerian Agip Exploration Limited (“NAE”) AND Shell Nigeria Exploration and Production Company Limited (“SNEPCO”) in accordance with the terms of a reallocation agreement of even date to be entered into between FGN, SNUD, SNEPCO, NAE and NNPC (“Reallocation Agreement”)”
“c) Malabu can only re-allocate the Oil Block once they can establish payment of Signature Bonus being the entry fee charged for running the block- at best they have contractual rights defined by their PSC; d) Strictu Sensu, it can be contested that Malabu and SNUD did not pay any Signature Bonus to FGN as the said amounts were deposited in an Escrow account and held by a Foreign Bank.”
“the execution of the Reallocation Agreement and the faithful implementation by all the Parties will bring the lingering dispute and competing claims to an end and the FGN will be released from all pending liabilities on account of the allocation and revocation of Block 245…”
“Upon receipt by the Escrow Agent of the Escrow Completion Notice, in the form attached to this Escrow Agreement as Schedule 2, signed on behalf of NAE and SNEPCO (by the relevant individuals identified in Schedule 1) the Escrow Agent shall: i) release the Escrow Amount, and irrevocably transfer, in accordance with clause 2.5 of the Escrow terms and conditions, the Escrow Amount to the FGN Escrow Account as shall be indicated pursuant to Schedule 2; and ii) irrevocably transfer to NAE and SNEPCO, in accordance with clause 2.5 of the Escrow terms and conditions, the interest accrued on the Escrow Amount, if any, net of any applicable fees and charges not previously paid into the Escrow Account by NAE and SNEPCO.”
“My understanding of your requirements is that the Federal Government of Nigeria (‘FGN’) would like to open up an escrow account with J.P.Morgan [sic] (‘JPM’) in which there will be two parties, JPMC and the FGN. This escrow account will be in US dollars and will be used to make payment to a beneficiary to settle all any existing claims and issues on Block 245.”
“An escrow account is being set up as part of an out of court settlement agreement for an oil & gas asset in the Republic of Nigeria. An approximate amount of$1.1Bn will be placed in the account. JPMC is a counterparty to this account and will hold this cash in escrow until the outcome of the out of the court action is announced and payment is made to the FGN. We have had a long standing relationship with FGN since 2003. We have previously held an Escrow account for FGN for this same dispute. This was opened in 2003 and closed in April 2011.”
“1. Written instructions per the Release Notice enclosed in Schedule 2 2. Call backs to confirm written instruction received must be made to the designated persons in Schedule 1”
“1. Minister of Finance [sic]- Mr Olusegun Aganga 2. Minister of State for Finance Hajia Yabawa Lawan-Wabi 3. Director, Funds Mr Babayo Shehu”
“Telephone call-backs shall be made as are required pursuant to this Depository Agreement. All funds transfer instructions must include the signature of the person(s) authorising said funds transfer which must not be the same as the person confirming said transfer.”
“7.1 Any and all instructions from either the Depository to the Depository in connection with this Agreement shall be given by its Authorised Officer. Subject to clauses 7.2 and 7.3 and unless specified otherwise in this Agreement, the Depository shall act only on instructions given or purporting to be given by the Depository by facsimile transmission. “Authorised Officer” means the person or persons signing this Agreement on behalf of the Depository or those persons designated in Schedule 2 or any person from time to time nominated as an Authorised Officer by the Depository (as the case may be) by notice to the Depository, such notice to be accompanied by a certified copy of the signature of any such person so nominated. 7.2 Any instructions (regardless of the method of communication) given or purporting to be given by the Depositor, notwithstanding any error in transmission or that such instructions may prove not to be genuine, shall be conclusively deemed to be valid instructions from the Depositor to the Depository for the purpose of this Agreement if reasonably believed by the Depository to be genuine provided, however, that the Depository may decline to act on any such instructions where in the reasonable view of the Depository they are insufficient, incomplete, inconsistent as between the Depositor or are not received by the Depository in sufficient time to act thereon or in accordance therewith provided further that, other than by reason of the fraud, negligence or wilful default of the Depository, the Depositor shall be jointly and severally responsible for any loss, claim or expense incurred by the Depository for carrying out or attempting to carry out any instructions of the Depositor. The Depository shall be under no duty to enquire into or investigate the validity, accuracy or content of any instruction or other communication. The Depository and the Depositor may from time to time agree upon a security procedure to be followed by the Depositor upon the issuance of an instruction and/or by the Depository upon the receipt of an instruction, so as to enable the Depository to verify that such instruction is effective as that of the Parties. A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, call back procedures or similar security devices. It is understood that such security procedure is designed to verify the authenticity of, and not to detect errors in, instructions. The Depositor agrees to safeguard such security procedure and to make it available only to authorised persons. Any instruction, the authenticity of which has been verified through such security procedure, shall be effective as that of the Parties. An authenticated SWIFT message issued to the Depository in the name of the any of the Depositor shall be deemed to have been given by an Authorised Person. The Party shall be bound by and adhere to the security procedure advised to it in writing or electronically by the Depository, as may be revised from time to time upon notice to the Parties. The Depository is not obligated to confirm any instructions. If the Parties, other than with respect to security procedures, choose to confirm an instruction, any confirmation must be clearly marked as such, and, if there is any discrepancy between an instruction and a confirmation, the terms of the instruction shall prevail. The Depository may, at its option, use any means to confirm or clarify any request or instruction, even if any agreed security procedure appears to have been followed. If the Depository is not satisfied with any confirmation or clarification, it may decline to honour the instruction. … 7.4 The Depository need not act upon instructions which it reasonably believes to be contrary to law, regulation or market practice but is under no duty to investigate whether any instructions comply with any application law, regulation or market practice. ….”
“The position of Dan Etete as Minister of Petroleum at or in period leading up to award of OPL 245 creates suspicion that the payment of$1,092,040,000 is the ultimate proceeds of corruption from Sanni Abacha rule.”
“There is a lack of transparency around the beneficial owner(s) of Petrol, and JPMC has not been able to locate through its research and conversations with BSI AG, Lugano, sufficient information on the issue. However, research does suggest that the beneficial owner(s) of Petrol may have a connection to a former Nigerian PEP.”
“In a separate arrangement contained in a Legal Advisory Mandated dated1st December 2010 , between Malabu and the Advisor (Chief Bayo Ojo (SAN)), the Federal Ministry of Finance (FMOF) was requested to pay the sum of US$1,092,040,000.000 to Messrs. Petrol Service Company Limited for onward further transfer to Malabu. However, on June 17, 2011, Malabu forwarded a letter to Mr. president requesting that the Permanent Secretary Federal Ministry of Finance be directed to issue necessary instructions to JP Morgan Chase to wire transfer the funds …. Malabu had in the same letter of June 17, 2011 indicated that NAE had insisted that payment of the said sum of US$1,092,040,000.00 be routed through the account of Messrs. Petrol Service Company Limited to Malabu. However, upon further investigation, the Managing director of NAE confirmed that it never requested that payment of the sum of US$1,092,040,000.00 be lodged into the account of Messrs. Petrol Service Company Limited for onward transmission to Malabu, but had no objection to direct payment. Messrs. Petrol Service Company Limited is the company mentioned in Schedule 2 of the Legal Advisory Mandate between Malabu and the Advisor, dated1st December 2010 which provides for payment of the sum of US$1,092,040,000.00 into an Escrow Account in the name of Messrs Petrol Service Company Limited (for onward transmission to Malabu with a US$50 million to be paid as compensation for the services of the Advisor).”
“- Correspondence with Government official using Yahoo address - Use of mobile for call backs even after Bayo advised that we do not normally accept mobile numbers for call backs … - The KYC of Depository Agreement does not contain that payment will be made to a 3rd party to settle any existing claims and/ or issues over Block 245. Indication from review could be that funds are being returned to FGN. This detail may have led to further questions. … - In communications I have seen there does not appear to be any consideration as to whether we would wish to take on this business … - Use of Hilton hotel for fax from Nigerian Government - Throughout the 2nd Escrow and Depository Agreement the communications reflect a strong sense of urgency, was the rationale for that understood?”
“The Escrow team define that they are not required to identify the non depositors so do not need to know where funds go. This approach appears to mean we do not mitigate corruption risk. … My review of communications indicates that Bayo knew what depository agreement was all about, I do not think it translated into what was document on the KYC and I think that is why that process failed to identify potential risks of the transaction. I think there becomes a question whether Compliance should review the underlying escrow or depository agreements in their review. I think they should but there may be timing or practical reasons why that is not appropriate. … In regard of why a depository agreement was required the oil companies needed to transfer funds to a FGN account. There would be specific individuals that would want to control the funds and I would think they would wish to limit knowledge of people that knew about it (given a sensitive topic). That the oil companies would not want to transfer direct to Malabu would appear a driver. None of this is document anywhere so would be speculative. I think more visibility around Escrow 2 than Depository Agreement.”
“[Mr Ansari:] Was there an attachment with this? [Mr Osolake:] No [Mr Adewuyi:] Basically less the$70 mn? If so this smirks of desperation. [Mr Osolake:] Note that Dan Etete was copied on the e-mail from the Min. Of Finance. They are trying to get him off their backs. [Mr Adewuyi:] He should not just try to start talking to us” [Mr Osolake:] No [Mr Adewuyi:] He should not just try to start talking to us”
“The AG has been writing EP lawyers and he did not disclose to us! He has not been totally transparent – we are not going to pay Bayo.”
“I have to admit that I am troubled by this case. Even for a case before the Commercial Court, there are relatively large sums of money involved. There are features of this case which are, by my understanding, pretty unusual. An oil field licence was awarded to a former Minister of Petroleum when General Sani was President. He ceased to be a Minister in 1998. Regardless of who is right about the argument before me at the moment, the situation appears to be that the previous Government – the Government under - I have forgotten - who was in power until July this year – entered into an agreement with the former Minister of Petroleum to pay$1.1 billion for the surrender of the licence.… I remain uncertain what view the new Government of Nigeria would take and how well informed they are about the transaction and the disputes under it. … It may be that I’m being unduly sensitive about the dispute. I am concerned however by the large sum of money being paid, effectively to a former minister, into a bank account not in that State but in the Middle East. The whole exercise has been somewhat bedevilled by murky instructions. I am not sure what I should do about it. Maybe the parties can tell me, or provide assistance with regard to my concerns. I have seen some odd cases in this Court and am pretty familiar with transactions that don’t bear minute or any examination. But even by the standards of these experiences, this one is quite startling. I am troubled by whom I am involved with here and I’m troubled by whether the Government of Nigeria is aware.”
“The eye-catching feature of JP Morgan’s intervention in the proceedings was the emergence of instructions that had been coming to JP Morgan which they had either obeyed without success or refused to obey.” ii) At [7]: “Startlingly, whilst JP Morgan obeyed the instruction, the money was returned by the recipient bank – I cannot remember where the bank was – for “compliance reasons”.” iii) At [8] he noted that JPMC had instructed counsel to attend the15 July 2011 hearing in order to “seek clarification of where they stood.”
“Consent for the purposes of Part 7 POCA does not: • Oblige or mandate a report to undertake the proposed act • Imply SOCA approval of the proposed act • Provide a criminal defence against other criminal offences pertaining to the proposed act • Provide a derogation from professional duties of conduct or regulatory requirements • Override the private law rights of any person who may be entitled to the property specified in the disclosure.” • Oblige or mandate a report to undertake the proposed act • Imply SOCA approval of the proposed act • Provide a criminal defence against other criminal offences pertaining to the proposed act • Provide a derogation from professional duties of conduct or regulatory requirements • Override the private law rights of any person who may be entitled to the property specified in the disclosure.”
“Please refer to my note of 17th May and all the documents attached i.e. my letter to Global Witness and my letter to the Attorney General and EFCC. Please note the response of the Attorney General HAGF/HMF/2013/Vol.1/8 [i.e. the letter of20 May 2013 ] and handle”
“The attorney-general has rejected as “without basis” claims in the Nigerian press that much of the money the government paid to Malabu in the 2011 deal was “round-tripped” back to bank accounts controlled by public officials. But where that money did end up is shrouded in mystery. Of the$1.1 billion ,$800m was paid in two tranches into Malabu accounts. This was then transferred to five Nigerian companies that appear to be shells. One of these, Rocky Top Resources, received$336.5m , some of which seems to have been passed on to unknown “various persons”, according to the EFCC’s report. Some$60m went to an account controlled by Mr Etete, who has said that he received$250m in total for his role in the deal. … Among the listed owners of three of the recipient companies is Abubakar Aliyu, who is reported to have close business ties to a senior politican, Diepreiye Alamiesegha, the former governor of Bayelsa state. Mr Alamiesegha’s skills in escapology would impress Houdini. Detained in Britain on money-laundering charges in 2005, he jumped bail. After returning to Nigeria, he was sentenced in 2007 to two years for each of six corruption-related charges, though he served only a few hours in prison. In March 2013 he received a controversial pardon from Goodluck Jonathan.”
“By alleged order of Nigerian President Goodluck Jonathan, billions in proceeds from the sale of oil exploration rights were laundered from Nigerian Federal Government accounts. After an elaborate web of transfers between various shells companies and individuals, the funds ended up in the accounts of several cronies and business associates of Nigerian government officials. In light of Malabu’s reported connection to the alleged Nigerian corruption scheme, there would be great risk presented if JPMC continues to process wires involving Malabu. … According to investigators, through ‘conspiracy, forgery, uttering forged document, criminal misappropriation and money laundering,’ Mr. Etete and Malabu Oil have been involved in illegalities since its formation. … • In August 2011, the Nigerian Justice Minister, General Mohammed Adoke, and the Nigerian Minister of State for Finance, Yerima Ngama, allegedly at the behest of President Goodluck Jonathan, coordinated two payments from Federal Republic of Nigeria (‘FRN’) government accounts totaling approximately$800m to Malabu. • Malabu later transferred funds to various individuals and entities. The EFCC’s investigation of Malabu’s dealings showed that Malabu and additional shell companies (and subsidiaries of those companies) received some of the funds sent from the FRN accounts. It was reported that several of the above-cited shells and subsidiaries were merely fronts for several Nigerian politicians who ultimately received proceeds of the corruption scheme. In light of the stale nature of the transactions, a Watchlist entry is recommended for increased monitoring of any potential future wire activity involving Malabu that may be process by an of JPMC’s FCB customers.”
“Your Excellency, the beneficial approach I counsel in the circumstances is for the Federal Government to take advantage of the terms of the Agreement Under clauses 5 and 11 to acquire a stake in OPL 245 converting it to a Production Sharing Contract (PSC) between FGN/NNPC … 8. The idea of revisiting the settlement agreement which resulted in the sale of the oil field to SNUD, SNEPCO and NAE is not workable. It is important in this regard for His Excellency to note the following: 8(a). The Agreement was executed by the highest authority in Nigeria and remains sacrosanct unless it is eventually set aside by the decision of a competent court of law and denying the parties immediate benefit of reaping the fruit of their investments. The Agreement has its mechanism for compensation in the event any of the rights conferred to ENI or SHELL are challenged or violated. For the FGN to revisit the agreement, the consent of SHELL and ENI will be required. 8(b). It is very unlikely that the consent will easily be obtained but rather they would rely on the protection afforded in the contract, and any unilateral effort by FGN to vary the terms of the Agreement would probably open up a new bout of litigation, defer further investment, give rise to a claim for damages and payment of huge legal fees. Your Excellency may wish to note some of the FGN’s representations and assurances in the [sic] clauses 12, 13 and 17 of the Agreement […]. 9. The above commitments are binding on the FGN. ENI/SHELL legitimately expect that the FGN would respect the commitments. Failure by the FGN to respect them would cast Nigeria in a very bad light internationally and negatively impact the FGN’s quest for foreign investments. Clearly, potential investors will not have the confidence to invest in Nigeria if the government of the country is perceived as one which does not honour its commitments (captured in agreement signed by three of its Ministers). 10. ENI/SHELL claim to have invested in excess of $US2.5 billion in OPL 245 from 2011 to date and as such would seek the protection of international law, including applicable investment treaties which prohibit the unreasonable, unfair and inequitable treatment of their investments and could expose the FGN to international arbitration involving multi-billion dollars claims.”