President Muhammadu Buhari, GCFR

Nigeria absolved from liability in $1.5bn oil field claim 22 years after

*Family of deceased Italian businessman had sought damages in case file against Federal Government

Isola Moses | ConsumerConnect

In relation to a family’s allegation against the Federal Government that it helped their father’s employee to illegally seize control of his company after his death in 1998, Nigeria has won a long-running arbitration battle over an oil field by avoiding the award of $1.5 billion in damages.

ConsumerConnect learnt that a tribunal at the Washington, D.C.-based International Center for Settlement of Investment Disputes has dismissed claims filed by the family of Vittorio Fabbri, a deceased Italian businessman.

The family had purported that the Nigeria‘s government helped their father’s employee illegally seize control of his company after his death in 1998.

Mr. Abubakar Malami, Nigeria’s Attorney-General and Minister for Justice, in a statement Wednesday, said the tribunal’s decision “absolves the Federal Government of Nigeria from any liability.”

Interocean Oil Development Co. and Interocean Oil Exploration Co., two Delaware-registered entities controlled by the Fabbri family, filed their case against Africa’s largest crude producer in 2013.

The company at the heart of the conflict, Pan Ocean Oil Corp., was the operator of an onshore oil block from the 1970s until last year, when the Ministry of Petroleum Resources revoked the permit due to unpaid taxes.

The Nigerian Government took over all assets belonging to tycoon Festus Fadeyi, including Pan Ocean, in July.

The government insisted that Fadeyi owed N240 billion ($625 million) in debts.

The Fabbri family used to own Pan Ocean through the Interocean companies.

While the tribunal accepted that Fabbri’s family was deprived of its ownership of Pan Ocean when Fadeyi took over the company, it didn’t conclude, as was alleged, that the Nigerian Government was complicit in achieving that outcome or responsible for any losses they suffered, according to a copy of the award  Bloomberg sighted.

Instead, it ordered the Interocean companies to pay costs of $660,000 to Nigeria.

Pan Ocean produced an average of 3,400 barrels of crude per day from its license, known as Oil Mining Lease 98, in 2018, according to government data.

Nigeria is also seeking to overturn an arbitration award currently worth $10 billion that was issued in favor of Process & Industrial Development Ltd. in 2017 and upheld by a U.K. court last year.

In September 2020, a British judge granted the government’s request to take the British Virgin Islands-registered company to a fraud trial.
Nigeria claims evidence of corruption perpetrated by P&ID has only recently been discovered.

But, P&ID denied all allegations of wrongdoing and accused Nigeria of evading its legal obligation to pay the company, said the report.

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