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Nigerian authorities seize First Bank’s assets over Shell’s $479m judgement debt

*First Bank of Nigeria will not honour their guarantee because they, at their own peril, failed to get a cash backing from Shell before they issued the guarantee, and community wants assets belonging to Shell and First Bank to be confiscated and sold to settle the judgment debt, says lawyer

*Federal authorities’ intervention was unlawful and unjustified as the community wants to sell bank properties to satisfy Shell debt ─First Bank

Alexander Davis | ConsumerConnect

For the financial institution’s purported failure to redeem its earlier commitment to guarantee damages the Anglo-Dutch oil company Shell owed to a local community in the country, the Nigerian authorities have confiscated the assets of First Bank of Nigeria Limited in order to recoup the decade-long judgement debt.

It was learnt the Federal court officials and Police visited the main branch of the commercial bank in the southern oil hub of Port Harcourt, Rivers State capital, Tuesday, January 12 to enforce an order to seize its property, Bloomberg report stated.

However, in reaction to the incident, First Bank, adjudged the third-biggest lender  in the country in an e-mailed statement Wednesday, said the government’s action, which resulted in unspecified properties being seized, was “unjustified, illegal and a reckless misuse of the machinery of justice.”

Oil pollution in the Niger Delta, South-South Nigeria

Report noted the authorities’ intervention resulted from the bank’s initial decision to guarantee damages a judge ordered Shell Nigeria to pay 10 years ago with interest accrued.

A Nigerian court said last year said more the accumulation sum was than N183 billion naira ($479 million).

Shell is said to be involved in a long-running legal battle with the Ejama-Ebubu community, which in 2010 successfully sued the multinational oil company for millions of Dollars in damages for polluting its land.

The community has defeated several appeals filed by Shell, most recently at the Supreme Court in November 2020.

Report further stated at Shell’s request eight years ago, First Bank of Nigeria provided a guarantee to the community for the original N17 billion award.

Nonetheless, Shell contests the community’s valuation of the size of the debt.

Lucius Nwosu, a lawyer for the community, said January 13 was quoted to have said that the Supreme Court verdict last year means the “coast is clear for enforcement of the judgment of 2010.

“First Bank will not honour their guarantee because they, at their own peril, failed to get a cash backing from Shell before they issued the guarantee.”

According to the bank’s statement, the seizure by the authorities ignored an interim court ruling obtained by Shell in December that restrains First Bank from paying out any money toward the judgement debt and prevents the community from taking steps to compel the bank to do so.

Though First Bank has stated it filed a pending motion seeking to cancel the decision permitting the confiscation of its property, the Nwosu maintained that neither of those cases can take precedence over the Supreme Court ruling.

The community wants assets belonging to Shell and First Bank to be confiscated and sold to help settle the judgment debt.

It is noted that the origin of the community’s grievance against Shell is a rupture in one of the firm’s pipelines 50 years ago.

Shell doesn’t accept responsibility for the spill, which it blames on “third parties” during Nigeria’s Civil War that lasted from 1967 to 1970, and says the affected sites have been cleaned up.

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