Malabu Scandal – Nigeria Loses Bid to Postpone London Trial

The Nigerian government on Monday lost a bid to postpone a massive claim against oil giants, Eni and Shell, in a London court.

Royal Dutch Shell and Eni’s bid to block a $1.1 billion civil claim over corruption allegations in Nigeria will go ahead next month, Mark Pelling, a judge in a London court ruled on Monday.

The court ruled that it should not wait for a connected Italian ruling.

Nigeria wanted the April court date postponed until January 2021, when a connected criminal case in Milan will have concluded.

The oil companies and former and current executives face corruption charges linked to the Malabu scandal, a 2011 deal involving a Nigerian oil block known as OPL 245.

Officials affected in the scandal have denied wrongdoing.

Scandal

The controversial Malabu deal was struck in 2011 under former President Goodluck Jonathan. The arrangement saw the Nigerian government stand as a negotiator in the controversial sale of the oil block in offshore Nigerian waters.

Two international oil firms, Shell and Eni, paid out about $1.1 billion to Nigerian government accounts in the UK which then transferred most of the money to Malabu, a company then controlled by Nigeria’s former petroleum minister, Dan Etete.

It was Mr Etete’s Malabu that transferred the over $500 million to accounts controlled by Abubakar Aiyu, who is also being prosecuted in Nigeria for his role in the scandal.

The payout immediately became a subject of cross-border investigation spanning over six countries. Several Nigerian government officials were believed to have received several millions of dollars in bribes for the enabling roles they played.

A larger trial including Shell, Eni and 13 other defendants is ongoing in Italy.

Those on trial include Eni’s current CEO, Claudio Descalzi; former CEO Paolo Scaroni, and Chief Operations and Technology Officer Roberto Casula alongside four former Royal Dutch Shell staff members including Malcolm Brinded, former Executive Director for Shell’s Upstream International operations, and two former MI6 agents employed by Shell.

Since 2012 when it first denied all allegations to PREMIUM TIMES, Shell had insisted that it only paid the Nigerian government for the OPL 245 oil block and did not know Mr Etete was the recipient or that he was an ex-convict.

But in 2017, Shell admitted to The Times that it negotiated with Mr Etete who as petroleum minister in 1998 awarded the OPL 245 oil block to Malabu, a company he partly owned.

The case against Eni and Shell brought by the Milan public prosecutor alleges that $520 million from the deal was converted into cash and intended to be paid to Mr Jonathan, members of the government and other Nigerian officials.

The prosecutors further allege that part of the money was also channelled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s Roberto Casula.

Brickwall

On Monday, the Nigerian government met a brick wall in its demand at the Londoncourt.

The case involving the oil firms had been due to finish around now, but delays mean an oral ruling is not expected until July, and a written decision is not due until October.

Any verdict is likely be subject to appeals which could take years to conclude.

Nigeria has “victim status” in the Italian proceedings and could potentially claim billions of dollars in damages if the companies are found guilty of bribery.

The British judge ruled that the London hearing should proceed in April, adding that it would be wrong if the defendants were delayed in hearing their fates due to a case-management decision in Italy.

He said: “It’s frankly deplorable the notion that a jurisdictional challenge should take two years to resolve,” he said.

The London claim centers on the licensing rights for OPL 245 block, for which the oil majors purchased extraction rights in 2011. It is alleged that of the $1.1 billion the companies paid for the block, only $210 million ended up in Nigerian government coffers, while the rest was used for bribes and kickbacks to government officials.

Reports said Shell had been happy for the London hearing to be postponed, but Eni was keen for it to go ahead. The oil companies are expected to argue that the London courts have no jurisdiction over the claim.

PREMIUM TIMES gathered that the hearing, expected to last five days, will start on April 21.

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