A Review of the Nigerian Energy Industry

Court to rule on jurisdiction in $3.8bn Egina project June 3

Court-law-justice18 April 2014, Lagos – Justice Chukwujekwe Aneke of the Federal High Court in Lagos will on June 3 rule on the issue of jurisdiction in the case filed by Lagos Deep Offshore Logistics (LADOL) and Samsung Heavy Industries of Korea and Total over the $3.8billion Egina Deepwater Project.

LADOL is asking for a declaration that the contract awarded by Total to Samsung on March 15, 2013, is subject to the Nigerian Oil and Gas Industry Content Development Act 2010.

In his submission at the resumed hearing of the case, counsel to LADOL, Prof. Fidelis Oditah (SAN), noted that since the Nigerian Content Act 2010 was enacted for the benefit of all Nigerians, his client, being a Nigerian entity, had the right to sue for local content breaches, wherein the relevant government agency fails to do so.

LADOL, according to him, is a local content partner to Samsung based on the contractual relationship his client had with Samsung to construct Egina FPSO platform for Total in 2014.

He stated that the contract also involved the construction of a training school at LADOL base for the training of Nigerian engineers and a fabrication yard, which would provide up to 30,000 or 50,000 jobs.
He stressed that after Total had awarded the contract to Samsung, the company decided to take the project to Korea, thereby denying LADOL of the benefits of the project

Oditah was responding to an earlier submission by the counsel to the first defendant (Samsung), Chief Wole Olanipekun (SAN), that LADOL being a ‘contractual beneficiary’ in the contentious project, lacked the locus standi to sue for alleged local content breaches.

Olanipekun’s position was also supported by counsel to the second defendant (Total), Adewole Atake (SAN), who on his part, urged the court to strike out his client from the suit, saying: “Total was not a party to 18 different contracts signed between the plaintiff and the first defendant.”

On the issue of jurisdiction, Oditah further buttressed his claims that LADOL, being an entity, recognised and licenced by Nigerian Exports Processing Zones (NEPZA) Act, which is self autonomous, is qualified to sue for breaches.

The presiding judge however adjourned ruling on the objections to June 3.
Speaking with journalists after the hearing, counsel to LADOL, Oditah, said the case at hand was an attempt for the first time, to test the efficacy of the Nigerian Local Content Act 2010, as it relates to its enforcement in the nation’s oil and gas industry.

“The proceedings are designed to test the efficacy of the Nigerian Local Content Act,” he said.
“The contention of my client ,LADOL, is that having been used by Samsung as the local content vehicle to win this major contract of $4billion, it is not open to Samsung to say that our client is no longer the local content partner.

“What is even more perplexing in a case is that the contract allocated the sum of $214 million for the construction of facilities at LADOL.  This $214 million is part of what Samsung is trying to put in the pocket and sabotage the Nigerian economy by doing so. What we are saying is that the court should not allow them to do so,” he added.


– Ejiofor Alike, This Day

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