Energy Venture Partners Ltd v Malabu Oil and Gas Ltd, Court of Appeal - Commercial Court, July 17, 2013, [2013] EWHC 2118 (Comm)

Issuing Organization:Commercial Court
Actores:Energy Venture Partners Ltd v Malabu Oil and Gas Ltd
Resolution Date:July 17, 2013
 
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Case No: 2011 FOLIO 792

Neutral Citation Number: [2013] EWHC 2118 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 17/07/2013

Before :

LADY JUSTICE GLOSTER

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Between :

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Mark Howard Esq, QC, Fionn Pilbrow Esq and Edward Harrison Esq (instructed by McGuireWoods London LLP) for the Claimant

Charles Graham esq, QC and Andrew Lodder Esq (instructed by Edwards Wildman Palmer LLP) for the Defendant

Hearing dates: 27th - 29th November 2012; 3rd - 5th December 2012; 10th - 14th December 2012; 17th and 20th December 2012

Additional written submissions: 21st December 2012; 10th January 2013; 11th March 2013; 14th March 2013

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JudgmentLady Justice Gloster:

Introduction

1. In this claim, the Claimant, Energy Venture Partners Ltd (``EVP'' or ``the Claimant''), a company registered under the laws of the British Virgin Islands, seeks payment of fees allegedly due to it from the Defendant, Malabu Oil and Gas Ltd (``Malabu'' or ``the Defendant''), a company registered under the laws of Nigeria, in relation to the sale of Malabu's 100% ownership interest in an oil prospecting licence for Block 245, an oil field located in the Eastern Niger Delta in the offshore territorial waters of Nigeria (``OPL245'' or ``the OPL Assets'').

2. EVP's primary case is that, pursuant to an oral variation to a written agreement concluded between EVP and Malabu in or about January 2010 (``the EVP Exclusivity Agreement''), Malabu agreed to pay a minimum figure of US$ (``$'') 200 million to EVP in respect of its fees for services provided in connection with the sale of the OPL Assets. In the alternative to its primary case, EVP claims a fee of $200 million, or ``... such other sum as shall seem to the Court to be just and reasonable'', (a) pursuant to an implied contract arising out of the parties conduct in their performance of the EVP Exclusivity Agreement, to the effect that EVP would be paid a reasonable sum for its services, alternatively pursuant to an implied term to similar effect; (b) as a quantum meruit pursuant to a restitutionary claim on unjust enrichment grounds for the services provided by EVP (see paragraph 55 of the Amended Particulars of Claim).

3. Malabu denies that it ever agreed to pay the alleged fees, or that, in the events which happened, any fees are due, whether on a contractual or on a restitutionary basis. In particular, Malabu contends, amongst its myriad of defences, that the EVP Exclusivity Agreement was a forgery, a sham, or part of a fraudulent scheme to deceive Malabu, was never concluded on ad idem terms, or was terminated, or abandoned; that there was never any oral agreement to pay $200 million or any sum; that, even if there were, such oral variation was precluded by an ``Entire Agreement'' clause; and that any contractual or restitutionary claim was fatally barred by a corrupt agreement, entered into between EVP and a third party (``the Secret Commission Agreement'') which constituted a breach of EVP's fiduciary duties to Malabu. Malabu also contends that the transaction or transactions by which Malabu ultimately disposed of the OPL Assets in April 2011 did not entitle EVP to commission under the terms of the EVP Exclusivity Agreement.

4. I shall have to analyse and examine these defences in due course. I comment at this stage, however, that they shifted and expanded over time, particularly during the course of the trial, principally to reflect the ever-changing nature of Chief Etete's evidence on the critical issues. This did nothing to enhance their credibility.

The Parties

5. EVP, which was incorporated on 30 August 2007, was set up to identify and to develop transaction and exploration opportunities within the global oil and gas industry. Its initial focus had been to do so in Nigeria. EVP's sole director and shareholder is Zubelum Chukwuemeka Obi, who is known as Emeka Obi (``Mr. Obi''). Mr. Obi is the sole director and shareholder of EVP. According to his own evidence, which I accept in this respect:

i) he was from one of Nigeria's most prominent and respected families;

ii) he had been well-educated at schools and university in the UK, obtaining an economics degree from SOAS at London University, and holding both UK and Nigerian citizenship;

iii) he had a well-grounded professional background; he was a former investment banker with, in addition, many years of experience acting for and advising the Federal Government of Nigeria, in particular in relation to, and in connection with, a number of privatisation transactions; he was well-connected both in Nigeria and on the international oil and gas scene;

iv) since 2007, he has acted, through his own corporate vehicles, identifying, developing and participating in merger and acquisition opportunities in Nigeria (in particular) across a range of industries, including in particular the oil and gas sector.

6. Mr. Obi dealt personally with all aspects of the transaction which is the subject matter of these proceedings on behalf of EVP. Mr. Obi was the principal witness at trial called on behalf of EVP. By a hearsay notice dated 22 November 2012, EVP also sought to rely on certain evidence given by a Mr. Ednan Agaev (``Mr. Agaev''), a Russian consultant, both in various emails and in certain arbitration proceedings between Mr. Agaev's company, International Legal Consulting Limited (``ILC'') and Malabu, (``the ILC Arbitration''). The subject of the ILC Arbitration is a claim by ILC for commission allegedly due from Malabu in respect of services provided by ILC in connection with the sale of the OPL Assets.

7. Malabu's principal witness was Chief Dauzia Loyal Etete, otherwise known as Dan Etete (``Chief Etete''). He was the Minister for Petroleum Resources from 1995-1998 in the government of the notorious Nigerian military dictator, General Sani Abacha, who died in June 1998, and who was president of Nigeria from 1993-1998. President Abacha's regime was subject to widespread allegations of corruption and human rights abuses. On or about 29 April 1998, at a time when Chief Etete was the Minister of Petroleum Resources, or shortly thereafter, the Federal Government of Nigeria (``the FGN'') awarded Malabu a 100% interest in the licence for the OPL Assets, subject to a liability to make payment to the FGN of a signature bonus of $20 million. It was not in dispute that at all material times Chief Etete was a consultant to Malabu, with authority to negotiate in connection with the sale of the OPL Assets and was the sole point of contact at Malabu for EVP in its dealings with Malabu in connection with the proposed sale, transfer or disposal of Malabu's interest in the OPL Assets. However the precise extent of his authority as such consultant was in dispute. EVP also contends that Chief Etete was at all material times a, and latterly the, substantial beneficial owner of Malabu. Malabu and Chief Etete deny this contention, asserting that the Chief had merely, and subsequent to the grant of the licence, been appointed as a consultant to Malabu.

8. In 2007 Chief Etete was convicted of money laundering in France. That conviction was upheld by the French Court of Appeal in 2009. The case is currently the subject of an application by Chief Etete to the European Court of Human Rights. The conviction related to the deployment in France of funds allegedly received by Chief Etete by way of corrupt payments or bribes from representatives of the company, Addax. Chief Etete was also widely reported to have been involved in the high profile Halliburton bribery scandal (in which it was alleged that substantial bribes were paid to Nigerian ministers, in order to procure substantial contracts). Chief Etete was alleged to have been paid $2.5 million in bribes between 1996 and 1998 when he was Petroleum Minister.

9. In January 2009, Chief Etete was refused entry clearance into the UK under s320 (7A) of the then Immigration Rules: ``using deception by failing to disclose a material fact'', it appeared that this fact was a document relating to his conviction in France. At the time of trial before this Court, Chief Etete was the subject of a UK visa ban, having been informed that, because of the earlier deception, any future visa applications would be automatically refused for ten years. For that reason his evidence was taken by the court on commission in Paris.

10. Malabu's other factual witness was a Mr. Rasky Gbinigie (``Mr. Gbinigie''), Malabu's company secretary, a role he has performed since Malabu's incorporation.

The course of the trial

11. Mr. Mark Howard QC, Mr. Fionn Pilbrow and Mr. Edward Harrison, instructed by McGuireWoods London LLP, appeared on behalf of EVP. Mr. Charles Graham QC and Mr. Andrew Lodder, instructed by Edwards Wildman Palmer LLP, appeared on behalf of Malabu.

12. The trial lasted 13 days in court, between 27 November and 20 December 2012. Because of Chief Etete's inability to enter the UK, the court took his evidence in Paris on 10-13 December 2012. The court had the benefit of extensive written closing submissions from both sides, before resuming for oral closing submissions on 20 December 2012. Following the oral closings, further written submissions were received from EVP on 21 December 2012, pursuant to a request from the court for assistance on specific questions. On 10 January 2013, Malabu served a Re-re-Amended Defence and Counterclaim, which was said to give effect to:

``... the amendments to its defence foreshadowed in its oral closing submissions and reflecting the case in its written closing submissions at paragraph 542 subject to the portion of that paragraph withdrawn during oral closing submissions.''

In fact, the amendments pleaded yet a further new case in forgery against EVP with which I shall deal in the appropriate passage of this judgment below....

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