Pan Petroleum AJE Ltd v Yinka Folawiyo Petroleum Co Ltd & Ors, Court of Appeal - Commercial Court, May 12, 2017, [2017] EWHC 1102 (Comm)

Issuing Organization:Commercial Court
Actores:Pan Petroleum AJE Ltd v Yinka Folawiyo Petroleum Co Ltd & Ors
Resolution Date:May 12, 2017
 
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Case No: CL-2016-000745

Neutral Citation Number: [2017] EWHC 1102 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 12/05/2017

Before :

MR JUSTICE KNOWLES CBE

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Between :

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David Joseph QC and Adam Board (instructed by Mildwaters Consulting LLP) for the Claimant

Rhodri Davies QC and Abra Bompas (instructed by Clyde & Co LLP) for the Defendants

Hearing date: 12/04/2017

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JudgmentMR JUSTICE KNOWLES :

  1. The parties are concerned with an Oil Mining Lease (No 113) offshore from the Federal Republic of Nigeria. Their relations are governed in particular by a Joint Operating Agreement dated 21 September 2007. Operations in the field are said currently to be loss making, with corresponding pressures for the parties.

  2. Wells Aje-4 and Aje-5 are operational. The parties are in dispute over whether development of wells Aje-6 and Aje-7 has been properly approved. Development of those wells will involve more cash calls on the parties.

  3. On the afternoon of Friday 20 January 2017 at a hearing at which all parties were represented by Leading Counsel and Solicitors, an interim injunction was continued against the Defendants, on the application of the Claimant and in support of arbitration proceedings which were then close by. I was the judge making the order that continued the injunction. My concern, expressly, was to hold the ring for a short period. I required substantial security for the cross undertaking in damages from the Claimant.

  4. The injunction was in these terms (so far as material), using wording proposed by the Claimant:

    ``2. Up to and including [a specified date] the Defendants must not exercise or purport to exercise (by written notice or otherwise) in respect of the Aje-6 or Aje-7 development wells:

    2.1 any of the rights and/or remedies in Article 8.4 of the Joint Operating Agreement to vest, deem to vest, transfer, or deem to transfer for its own benefit or otherwise the Claimant's Entitlement and/or Participating Interest in the Joint Operating Agreement or Oil Mining Lease 113;

    2.2 any of the rights and/or remedies in Article 8.2 of the Joint Operating Agreement to exclude the Claimant from participating in, or voting at, meetings of the Operating Committee;

    2.3 any right of termination at law or other remedy which would deprive the Claimant of its Entitlement and/or Participating Interests in the Joint Operating Agreement or Oil Mining Lease 113.''

  5. Under Article 8.1 of the Joint Operating Agreement a default notice will issue to a defaulting party if there is default in the payment of cash calls. Article 8.2 is in these terms (so far as immediately material):

    ``Operating Committee Meetings and Data

    Beginning five (5) Business Days from the date of the Default Notice, and thereafter while the Defaulting Party remains in default, the Defaulting Party shall not be entitled to attend Operating Committee or subcommittee meetings or to vote on any matter coming before the Operating Committee or any sub...

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