ALSCON and the unending legal tussle

Surprisingly, seven years after the judgment of Nigeria’s apex court in 2012 on the privatisation of Aluminium Smelter Company of Nigeria (ALSCON), located in Ikot-Abasi, Akwa Ibom state, copious reasons inform the need to re-examine the unending legal tussles that have ensued, especially as they pertain to challenging the finality of Supreme Court decisions, due processes, and compliance with orders of the court.

From the records, the first attempt to privatise ALSCON was in 2002, but the transaction failed because of bottlenecks in the formation agreements and the Articles of Association. This led to the termination of the agreements in the late December 2003 and early 2004.

ALSCON was later reorganized, with the federal government acquiring 92.50% shares and Ferrostaal, 7.5%. In 2004, moves to privatise ALSCON by way of core investor sale were initiated, with RUSAL and BFI Group prequalified to bid. BFIG won, having bided USD 410 million.

BFIG’s failure to pay according to the letter of offer dated June 17, 2006 by which it was required to pay 10% of the bid price within 15 working days of the receipt of the letter prompted the re-appraisal of the transaction, with this reserve UC RUSAL invited to take up their bid. BPE saw reasons into the matter; hence former President Olusegun Obasanjo directed the Ministry of Mines and Steel Development to address it. The negotiations were completed and the Share Sale/Purchase Agreement (SPA) with RUSAL was executed. The facility was handed over to RUSAL on 27 February, 2007.

BFI Group went to court to halt BPE from cashing the mandatory bid bond of US$1million and to prevent BPE from negotiating the sale of ALSCON with any other entity. It based its case on the agreements it signed at the end of a prebid conference on 20th May, 2004, which sought to affirm that it would pay BPE 10% of the bid price within 15 working days of signing the share purchase agreement. BFIG wanted the court to compel BPE to execute an agreement with it, but lost at the Federal High Court and Appeal Court.

BFIG appealed to the Supreme Court, which on July 6, 2012, ordered BPE to provide the mutual agreed Share/Purchase Agreement for execution by the parties to enable BFIG pay 10% of the accepted bid price of US$410m within 15 working days from the date of execution of SPA in accordance with the agreement dated May 20, 2004, and 70% bid price be paid within 90 calendar days. It also ordered BPE to accept payment of the 10% of the bid price from the appellant within 15 days from the date of signing the Share Purchase Agreement; and also perpetual injunction restraining the BPE or its agents from inviting any further bidding for the acquisition of ALSCON in violation of the contract between the plaintiff and the defendant and, or from negotiating to sell, transfer or otherwise handing over ALSCON to any person or persons in violation of the contract between the plaintiff and the defendant.

BPE complied with the ruling via a letter dated 7th September, 2012, reinstating BFIG as the preferred bidder of ALSCON. It also forwarded the draft Share Sale/Purchase Agreement to BFIG for review via a letter dated October 8, 2012. This was acknowledged by BFIG through an email dated October 11, 2012, where it further requested for the audited financial statements of ALSCON and some other documents, which

BPE on October 16, 2012 forwarded to it.

On January 29, 2013 BPE via a letter offered 77.5% shares in ALSCON to BFIG. And, in another letter dated February 1, 2013, BPE advised BFIG to disregard any other agreement aside the SPA reflecting the terms of the sale at $410 as ordered by the Supreme Court. BFIG in an email dated February 2, 2013 rejected the offer.

When the time the Supreme Court allocated for the agreement to be executed expired, and after due notices to BFIG, BPE activated the relevant clause of non-compliance against BFIG. Again, BFIG returned to the Supreme Court, which on December 3, 2013, struck out the case on the ground of non-compliance.

Thereafter, a fresh suit was instituted by BFIG in Suit No. FHC/ABJ/CS/901/2013 at the Federal High Court, Abuja, seeking an interpretation of the unambiguous judgement of the Supreme Court. This is very strange and curious. The court delivered judgment on 30th September, 2014, in favour of BFIG. Dissatisfied, BPE proceeded to the Appeal Court, which in January 2019 set aside the Federal High Court judgment and held that Justice Abdu Kafarati only ended up giving a barrage of orders which tend to amend and adjust the judgment of the Supreme Court thereby exceeding his jurisdiction.

The Court of Appeal then directed BPE to provide the mutual agreed Share Purchase Agreement which is Exhibit BPE1 for execution by the parties to enable BFI Group Corporation pay the agreed 10% US$410m within 15 working days from the date of the execution of the Share Purchase Agreement in accordance with the agreement dated May 20, 2004, and the 90% balance of the bid price be paid within 90 calendar days as ordered by the Supreme Court in 2012.

BPE complied with the order of the court, with both parties implementing the agreed SPA. Investigations reveal that the judgment of the Supreme Court is unequivocal, unambiguous, and in tandem with the agreement dated May 20, 2004. The annexure sought to be part of the SPA were not in the contemplation of the BPE EXH 1 which is the mutually agreed SPA. The only annexure referred to in that agreement is the BFIG’s Post Acquisition Plan which was referred to as Schedule A to the SPA.

Now, if a few questions may be raised in seeking to unravel this rather curious situation:Why is the BFIG not willing to obey the orders of the Supreme Court? Why are the lower courts entertaining this clear aberration of justice? What is the import of a committal proceeding on the commercial transaction of the sale of ALSCON? Does BFIG have the funds to pay for this asset or does it want it for free. If it does have the money, why not pay the sum of $410m in compliance with the Supreme Court judgement?

What are the facts behind that rather curious judgement given by Justice Chikere on the committal of someone who was not party to the initial agreements and who apparently complied with the judgement of the highest court of the land?

It is my candid view that courts abide by the decisions of superior courts in Nigeria to preserve and protect the temple of justice and portray the judiciary as objective, impartial custodian of equity, justice and fairness. To pursue committal of innocent persons amounts to travesty of justice.

Sunday Jolasinmi wrote from Sabon Gari, Zaria.