A Review of the Nigerian Energy Industry

Reprieve for Shells over $1.5bn court case

21 December 2011, Sweetcrude, ABIUJA – Reprieve has come the way of the local Nigerian arm of the Royal Dutch Shell, Shell Petroleum Development Company of Nigeria (SPDC), over the judgment of a Nigerian Federal High Court, which ordered the multinational oil company to pay the Ijaw Aborigines of Bayelsa State the sum of $1.5 billion damages as compensation for environmental degradation.

The reprieve from the Supreme Court is, however, temporary.

A judgment by apex court last Friday, copy of which was obtained Wednesday, dismissed an appeal by the Ijaw Aborigines to compel Shell to deposit the judgment sum with the Central Bank of Nigeria in the name of the Chief Registrar of the Federal High Court.

The court, in dismissing the case, held that Shell may disintegrate if forced to cough out the judgment debt while the appeal filed by the oil giant was still pending.

In a unanimous judgment delivered by Justice Afolabi Fabiyi, five justices of the court held that the issues raised by Shell in its appeal were substantial points of law.

The court, while awarding the $1.5 billion damages against Shell had ordered that the sum be deposited with the CBN in the name of the Chief Registrar.

The court gave Shell only three days within which to pay the judgment debt.

The company found this order very onerous and applied to the court to vary the conditions. The trial court refused the application to vary the conditions.

Shell was dissatisfied and appealed to the Court of Appeal for a variation of the condition for the stay of execution of the high court judgment. Instead of an order that the judgment sum be paid into CBN in the name of the Chief Registrar, the company wanted an unconditional stay of execution of the judgment pending the final determination of the appeal filed by it.

The high court had granted Shell a stay of execution of the judgment but on the condition that Shell pay the judgment debt to CBN. Shell did not want any condition to be attached to the stay of execution.

After pleading the fact that it might go into extinction if forced to deposit the judgment sum with the CBN, the company’s argument found favour with the Appeal Court.

The Appeal Court consequently granted Shell an unconditional stay of execution. The Ijaw Aborigines were dissatisfied and filed the instant appeal at the Supreme Court.

In this article

Join the Conversation