A Review of the Nigerian Energy Industry

British court blocks Shell Nigeria oil deal


12 October 2014, Lagos – The High Court in London has blocked an agreement between the oil giant Shell Petroleum Development Company and a UK law firm, CW Law, in relation to thousands of residents of Bodo community in Rivers State, which the firm claimed it represented in a dispute over oil spills.

The President of the Technical and Construction Court, Justice Robert Akenhead, blocked the deal and upheld an injunction against CW Law, which prevents them, or anyone representing them, to make contact with the people of Bodo in furtherance of the settlement agreement.

The judge stated that Leigh Day (the original legal representative of the Niger Delta residents) would proceed with the case for trial in the High Court in May 2015 and that many thousands of claimants were entitled to damages under the Oil Pipelines Act, which could be substantial.

In the verdict given on Thursday by the court, the judge said there might have already been a breach of an existing interim order against CW Law.

According to the judge, Leigh Day had strong evidence that representatives of CW Law had breached the order by continuing to seek to sign up claimants, while the order was in place.

CW Law was accused, by the law firm, Leigh Day, of unlawfully entering into settlement talks with SPDC on behalf of many villagers of Bodo in the Niger Delta, who they did not represent and who were not clients of the firm.

The settlement agreement between CW Law and Shell, given as evidence in court, sought to settle the claims for £150 each with an additional £390 per claimant going into a “trust.” The agreement also included an incentivised costs structure for CW Law which would see them paid more, by Shell, the more claimants it signed up to the scheme.

Speaking after the judgment, the Senior Partner of Leigh Day, Martyn Day, said, “We are very pleased that the judge agreed to block the deal between Shell and CW Law, as far as our clients are concerned.”

With a population of 14,000 adults, the great majority of the villagers are represented by London-based law firm, Leigh Day, in one of the largest environmental legal cases in history, following two massive oil spills in 2008 from pipelines operated by Shell.

In June this year, the Bodo community had rejected an offer of up to $51m from Shell for two oil spills in 2008 depriving the residents of their livelihood.

Shell had accepted responsibility for paying compensation and cleaning up spills caused by its own failures.

“Shell had consistently sought to underestimate the damage, while paying only lip service to an apology. These spills, which are some of the largest oil spills in history, have devastated a community of many thousands of people and ravaged the environment,” Day had said in a statement.

In a preliminary hearing ahead of a trial which will take place in May 2015, the London high court ruled that Shell’s Nigerian subsidiary could be liable if it were proven that it did not take reasonable steps to protect and maintain the pipeline from thefts which have plagued the key African oil.


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