Nigerian Judiciary and Global Best Practice: Mobil Oil and it’s Litigation

Over the years, Mobil Producing Nigeria Limited, one of the biggest oil companies in the country, has sometimes been in the eye of the storm over its operations in Nigeria.

The multinational oil giant, continues to contend with court cases in various courts across the country. Reasons for this are not farfetched.

From Federal High Courts to States High Courts, from Court of Appeal to Supreme Court, various accusations such as oil spillage which has caused environmental pollution, shabby treatment of its Nigerian workers, as well as refusal to obey court orders, have been laid against the company by individuals and host communities.

In the league of other multinationals like Shell with several court cases against them, these complaints against Mobil and issues surrounding the conduct of its business in Nigeria, have resulted in several court cases filed by affected individuals and companies, some of which have been decided by the courts, and others, ongoing.

One of such cases is the one involving 860 staff of the company, who dragged the multinational before a Federal High Court, Uyo, over their employment status.

The staff, who were directly employed and paid as security personnel by the company in the 90s, after working for many years, were suddenly issued with letters by the company, indicating that their employment had been transferred to the Nigeria Police Force as Supernumerary (SPY) Police Personnel, and not actual staff. Thus, they were asked to claim their benefits and entitlements from the Police.

Such action by the company, did not sit well with the staff, on the ground that they were not employed by the Police and as such, could not work under the Police. They also accused Mobil of taking such a decision without carrying the employees along.

Organisations such as Amnesty International, Council of Chiefs in Akwa Ibom State and the Public Complaints Commission, waded into the matter, with no solution. Though the three interventionists recommended that Mobil accept the staff as theirs, yet the company refused to yield.

The matter came to a head when, in 2006, the Federal High Court, Uyo, ruled in favour of the affected staff. An appeal filed at the Court of Appeal, Calabar, Cross River State, also went in favour of the Complainants in a judgement delivered on May 21, 2009 by Justices Ngolika Orji-Abadua, Kumai Aka’ahs and Jean Omokri, which held that the Complainants could not be regarded as staff of the Nigeria Police, because “the circumstances, nature, procedure and methods of their employment were not in harmony with the provision of Sections 18, 19, 20 and 21 of the Nigeria Police Act.”

The court also barred Mobil from forcing the staff, who served as guards, “to sign the document entitled: ‘Mobil Producing Nigeria Status Agreement for Supernumerary Police Service Conditions’, as same sought to contravene or breach the provisions of Section 18 of the Nigeria Police Act.”

In spite of judgements of the two courts, Mobil has allegedly refused to comply with the courts’ directive.

Not satisfied with the Court of Appeal’s decision, Mobil proceeded to the Supreme Court in 2010. However, it is worrisome that to date, the Apex Court has not decided on the matter, as Mobil has resorted to the use of adjournments each time the matter comes up for hearing, in an attempt to frustrate the course of justice.

Another court case involving Mobil was the 2002 N10billion suit filed against it by one Chief M. Ajanaku and the fishing communities of Lagos, over oil spill, before a Federal High Court, Lagos.

The Complainants had accused Mobil of releasing about 40,000 barrels (approximately 6,000 tonnes) (7,637,280 litres) of light crude oil into the marine environment on January 12, 1998, through its ruptured pipeline.

The incident affected the fishing business of the Nigerian fishing communities, as the spillage spread throughout the country. The Claimants accused Mobil of failure to replace the 25year old pipeline, which resulted in the spill. Therefore, they urged the court to award N10billion in their favour, for damages done to their business by Mobil, for neglecting to replace the pipeline when due.

Justice Ibrahim Buba, in his judgement, granted all the claims of the Claimants, and awarded N10billon against the oil giant. The suit dragged for 14 years, before judgement was delivered.

Another ongoing legal battle is between (Mobil) and another oil giant (ASCON), and the family of one late Chief (Dr) Sunday Ogunyade. The legal dispute is in respect of a plot of land located along Gbagada-Oshodi expressway with a petrol station situated on it.

The Complainant, ASCON Oil Company, sued Mobil to court, for its (Mobil) refusal to handover the said property to them (ASCON) after the expiration of its lease agreement with the initial owners (Ogunyade).

Mobil had, on September 1, 1980, entered into a 10-year, renewable lease agreement with Chief Ogunyade, to operate a petrol station on the said property. The lease was due to expire on August 31, 2000.

At the expiration of the agreement, a disagreement occurred between both parties, which led to a court case. Terms of settlement were reached where parties agreed to another 10 years of lease which commenced on September 1, 2000 and ended on August 31, 2010.

One month before the expiration of the agreement, precisely July 2010, ASCON Oil was approached by the Ogunyade’s family through their lawyer, Chief Dele Awoniyi, to take over the lease of the property. According to the family, the decision was as a result of the ill-treatment meted out to them by Mobil throughout the duration of the earlier agreement.

A sum of N100million was paid by ASCON to the family at the yearly rent of N10million, with the company expected to take over the property after August 31, 2010. The family also said it notified Mobil of the new arrangement with ASCON.

According to court documents, ASCON wrote a letter dated June 23, 2010, to Mobil ‘specifically requesting for the handover of the land and station to our company, as the new tenants’ and requested for ‘a date and time for the handing over of the station land and premises after August 31, 2010’.

All hell was however let loose, when Mobil allegedly refused to hand over the property, prompting the family to institute a legal action at the Lagos High Court against their former tenants.

In view of the court case, ASCON Oil also insisted on supplementary lease agreement with the family, to the effect that its lease will only commence effectively after it has taken possession and started operating. This move made Mobil file a counterclaim seeking to stop the action.

While the case was ongoing, the family agreed to out-rightly sell the property to ASCON and a sum of N750 million was agreed.

To recover possession of the property from Mobil, ASCON filed another matter in court against the company in Suit LD/13/13.

Mobil however, did not file a defence, instead it filed a preliminary objection in suit LD/2052/12 against ASCON’s suit, claiming that they are still entitled to a lease over the property, even though its earlier agreement with the family had expired.

The trial judge, Justice Atinuke Ipaye dismissed the preliminary objection of Mobil and upheld that of ASCON. The judge also transferred the matter to Lagos State Multi-Door Court House (ADR) for settlement.

The matter was subsequently reassigned to Justice Lateef Lawal-Akapo of the Lagos High Court, Igbosere, in 2015. Mobil allegedly refused to show up for trial. Another effort to settle out of court, proposed by Mobil, also did not yield any positive result.

“We are preparing to go back to court since the appeal filed by Mobil was incompetent, because it was filed out of time, and no leave of court was initially sought to enlarge time to enable Mobil to properly appeal. Mobil clearly is determined to frustrate us from taking possession of a property we validly acquired for valuable consideration”, lamented ASCON.

While this matter is pending, Taiwo Ogunyade, a son of late Chief Sunday Ogunyade and spokesperson of the Ogunyade, family lamented that "We have made several efforts to resolve this matter amicably and get Mobil to relinquish our property, all to no avail.