Mkpoikana Udoma
Port Harcourt — In a ruling that has sparked renewed fears over judicial fairness for indigenous contractors and local content, a Port Harcourt High Court has dismissed a N5.74 billion breach-of-contract suit filed by Macobarb International Limited against the Nigeria LNG Limited.
The judge, Justice Chinwendu Nwogu, ruled in favour of the gas giant, rejecting all claims by Macobarb in a judgment delivered on Wednesday in the case with suit number PHC/2013/CS/2022, centered on an alleged breach of terms in a contract awarded to Macobarb for access control works at the NLNG plant on Bonny Island, Rivers State.
Reacting outside the courtroom, Shedrack Ogboru, the Chief Executive Officer, CEO, of Macobarb, decried the ruling and declared it a “death knell” for indigenous contractors seeking justice against international oil companies, IOCs, in Nigerian courts.
Showing frustration, Ogboru said he felt he presented tight case to the court to show that the NLNG breached terms of payments and that the breaches caused slowdown of the execution of the contract, but regretted that the judge did not agree with any of his arguments.
According to him, many indigenous contractors have died as a result of injustices in the hands of the oil majors, noting that it was only in abroad do communities and local contractors get some form of justice, never in Nigeria.
Justice Nwogu had ruled that the NLNG did not breach its contract with the contractor and that the gas company did not unlawfully deny Macobarb payments.
The judge said work executed by Macobarb did not amount to ‘work done’ as stated in the contract terms except the NLNG approved it as so, and that the provision mandating the person recognized as ‘contract holder’ nominated by the NLNG as the one to authorize any dealings with the contractor did not mean that he alone could act for the NLNG as relied upon by the contractor. The judge ruled that the ‘contract holder’ was a mere day to day overseer of the project, and that any official mandated by the NLNG can terminate the contract.
The judge also ruled that the contract did not provide for ‘stand down payment’ and that the NLNG did not cause delays in the execution of the contract as claimed by the contractor.
The judge also ruled that the payment failures by the NLNG that the contractor claimed affected the contract did not amount to an offence or breach of the contract but that the contractor misused the loan he obtained from banks.
In the end, the judge ruled in favour of all the grounds submitted by the NLNG and none on the grounds by the contractor, and even tongue-lashed the contractor in most of his rulings.
Reacting, Ogboru said: “My case is presented 100 per cent, the NLNG’s case is zero; but surprisingly, the NLNG has rather been upheld, and Macobarb denied. I pity indigenous contractors in Nigerian courts. We are doomed.”
Crux of the matter
Macobarb International Limited, an indigenous contractor, had dragged the NLNG to court claiming over N1Bn (later amended to N5.74Bn) for alleged breaches to a contract (B130142PPI, Access Control) in the NLNG plant area with three years duration.
The suit said the contract provided that Macobarb be paid bit by bit progressively based on the value of verified work done.
Macobarb in its claims said the contract also forbade delay of any kind in the project and provided for penalty on whoever caused the delay. It also provided for alert system should anything want to cause a delay.
Macobarb said it activated the alert clauses when payment delays began to happen but that nothing was done to rectify the delays until the contract was terminated.
He argued that the wrong person unknown to the contract signed the contract letter and that payment denials amounted to breach of the contract.
