Local Content: Court Dismisses ARCO's Suit against AGIP
The Nigerian Oil and Gas Industry Content Development Act, 2010 got its first major test in court yesterday as the Federal High Court sitting in Port Harcourt dismissed a suit filed by an indigenous company, Arco Group Plc, against the Nigeria Agip Oil Company (NAOC) and its joint venture partners over the implementation of the Local Content Act.
Arco had, in suit number FH/PH/ CS/02/2015, dragged Agip, Nigerian National Petroleum Corporation (NNPC), Conoco Philips Petroleum Nigeria Limited and the Nigeria Petroleum Investment Management Services (NAPIMS) before the court to determine whether in view of the provision of section 3 subsections (2) and (3) of the Nigerian Oil and Gas Industry Content Development Act, 2010, having demonstrated ownership of equipment, Nigerian personnel and capacity to execute the task of performing the contract for the maintenance service of rotating equipment at the Nigerian Agip Oil Company gas plants at OB/OB, Ebocha and Kwale, it is entitled, being a Nigerian company, to the exclusive right to be considered and granted such contract including any extension of its duration.
Arco also sought a declaration that the persistent and deliberate failure of NAOC to award the contract for the maintenance of the said plants, as well as grant an extension of the award by way of interim or stop gap contract, violated Section 3 (2, 3) of the Nigerian Oil and Gas Industry Content Development Act, 2010.
The court was to deliver judgment on six contentious issues including jurisdiction, motion on notice and contempt charges over maintenance of status quo as ordered by the court.
Delivering judgment in the suit yesterday, the presiding judge, Justice Abdullah Liman, dismissed the suit on the grounds that Agip did not violate the Act by not awarding the contract to Arco since other companies involved in the bid were also indigenous companies.
In the judgement which lasted for about two hours, Liman said his court had jurisdiction to hear the matter.
He however said Arco could not prove that it was the only Nigerian indigenous servicing company that bidded for the OB/OB, Ebocha and Okwale gas plant contract in line with the provisions of the Nigerian Oil and Gas Industry Content Development Act.
He said, "Question number one: The plaintiff, in virtue of Section 32 (3) of the Nigerian Oil and Gas Industry Content Development Act, lengthy although, has demonstrated ownership of equipment, Nigeria personnel and capacity to execute the task of performing the contract for the maintenance service of gas turbines/ rotating equipment and machines at the Nigerian Agip Oil Company plant at OB/OB, Ebocha and Okwale, being a Nigerian company.