Appeal Court upholds NorthWest Petroleum & Gas Company Limited’s 69.6% equity stake in Ede Marginal Field   

In a judgment delivered on Friday, January 24, 2025, the Appeal Court upheld the appeal filed by NorthWest Petroleum against Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited (first and second respondents) as well as the Minister of Petroleum Resources.

The appeal arose from a ruling by the Federal High Court, Abuja Judicial Division, delivered on August 29, 2022, by Justice Emeka Nwite, which partly dismissed NorthWest Petroleum’s preliminary objection challenging the competence of the case against its equity stake in Ede Marginal Field.

NorthWest Petroleum 69.6% equity stake

Naijaonpoint exclusively gathered that by a letter dated March 1, 2021, the DPR notified the first and second respondents and others of their winning bids over different equity stakes in Ede Marginal Field, OML 67.

As per the bid guidelines, the first and second respondents were informed that their respective potential equity stakes were subject to the full payment of a signature bonus within 45 days of receiving their notification as potential awardees.

The letter outlined that failure to comply within this period would result in the expiration of their status and participation in the bid round.

Naijaonpoint gathered that both the first and second respondents failed to pay the full signature bonus within the stipulated 45-day period, only making partial payments.

They requested an extension to complete the payment, but the DPR did not respond to their request.

After the expiration of the 45-day deadline, the Minister of Petroleum Resources withdrew the portion of the Ede Marginal Field proportional to the part payments made by the first and second respondents.

Subsequently, the DPR awarded NorthWest Petroleum a 69.6% equity stake in Ede Marginal Field, which included the equity purportedly carved out from the first and second respondents’ allocation due to their failure to complete the required payments.

Following the award, the DPR directed the awardees to form an incorporated Special Purpose Vehicle (SPV) based on their percentage equity allocation.

However, the first and second respondents rejected the SPV arrangement, arguing that the directive was arbitrary and unlawful.

As a result, they refused to participate in the formation of the SPV.

In response, the Minister of Petroleum Resources issued notices stating that the awards to the first and second respondents would be withdrawn if they failed to comply with the stipulated terms within 60 days.

Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited maintained, in their court processes seen by Naijaonpoint, that the allocation of 69.6% to NorthWest Petroleum was arbitrary and unlawful.

Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited maintained, in their court processes seen by Naijaonpoint, that the allocation of 69.6% to NorthWest Petroleum was arbitrary and unlawful.

Their legal team argued that the Marginal Field Guidelines do not provide for the reduction of a potential awardee’s equity stake.

Developments at the Trial Court  

Justice Okong Abang of the Appeal Court noted that the appellant relied on Section 2(a) of the Public Officers Protection Act, which stipulates that suits filed against public officers beyond the prescribed three-month period are statute-barred, and courts must decline jurisdiction.

The first and second respondents argued that when a suit discloses evidence of illegality and abuse of power, public officers lose the protection of the Public Officers Protection Act, allowing legal action beyond the three-month window.

However, Abang held that when a suit is filed outside the prescribed three-month period, it remains statute-barred, and the court must decline jurisdiction.

“No reason was offered as to why the suit was not filed within the prescribed three-month period,” Abang said.   

“The trial court used a faulty premise to conclude that the first and second respondents’ suit disclosed illegality and abuse of power,” he added.   

Abang further stated that the appellant presented material evidence in its affidavit confirming its participation in the bid round and full payment of the signature bonus for its allocated equity stake.

“Incidentally, the first and second respondents did not deny this fact in their counter-affidavit opposing the appellant’s preliminary objection,” he noted.   

He criticized the trial court for failing to consider the appellant’s material submissions, particularly regarding its participation in the bidding process, which was crucial to determining whether the award was illegal.

Abang concluded that the allegations of illegality raised by the first and second respondents were merely a “sham”.

He also found that the trial court’s failure to consider the appellant’s evidence amounted to a denial of fair hearing, leading to a miscarriage of justice.

“The first and second respondents did not dispute that their equity stake in the marginal field was subject to full payment of the signature bonus.   

“They have not disputed the fact that they failed to pay the signature bonus in full.   

“In my view, the Minister of Petroleum Resources’ decision to reduce their potential equity stake due to delayed payment and reallocate it to another party that had fulfilled the payment requirements and even commenced production cannot be considered an act of bad faith or abuse of office,” Abang said. 

The Appeal Court subsequently declared the suit against NorthWest Petroleum “statute-barred” and struck it out for being incompetent.

It also discharged the ex-parte order and interim injunction issued by the trial court, stating that they were granted in a suit that lacked jurisdiction due to its statute-barred status.

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