BANK SUES ALISON-MADUEKE, NNPC, OTHERS FOR N1.7 BILLION

A BUSINESS dispute between Zenith Bank Plc and Nigdel United Oil Company Limited over a N1.7 billion loan facility the bank granted the oil firm to acquire an oil bloc in 2006 has taken a legal dimension.

The bank has dragged the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and three others before a Federal High Court in Lagos claiming ownership of the oil bloc. 

Zenith Bank, in the case before Justice Okechuckwu Okeke, is praying the court for a perpetual injunction restraining the minister, her agents, servants, privies, or whosoever is acting on her behalf from recognising Nigdel oil, owned by popular businessman and Delta State politician, Prince Joseph Panawou, as the rightful owner of the OPL 233 oil bloc since same was paid for by the bank on behalf of the oil company which it has allegedly refused to pay back.

The bank also wants the court to make a declaration that by the agreement between it and Nigdel Oil contained in the letters dated August 14 and September 11, 2006, Zenith Bank is entitled to be assigned the oil company 100 per cent right interest in the said bloc.

Others joined in the suit are the Ministry of Petroleum Resources (2nd defendant), the Nigerian National Petroleum Corporation (3rd defendant) and Nigdel United Oil Company Limited (4th defendant).

Zenith Bank is also asking the court to grant a mandatory order compelling the oil company to execute an irrevocable mandate assigning her 100 per cent right in the bloc to the bank pursuant to the 4th defendant failure to pay back the signature bonus to the bank.

The plaintiff is also claiming the sum of N100 million against the 4th defendant being the legal cost incurred by it in instituting the action before the court.

According to a statement of claim attached to the suit by the bank, the plaintiff claimed that Nigdel United Oil Company Limited applied to the 1st, 2nd and 3rd defendants and won a bid for an Oil Bloc Prospecting License (PL 233) in the Nigerian 2006 mini round bidding for oil bloc and under the terms and conditions of the grant, the 4th defendant was to pay a signature bonus commitment of the sum of $11 million to the other defendants.

The plaintiff also maintained that in pursuance to the bank/customer relationship existing between it and Nigdel oil, the 4th defendant approached it for a credit facility in the said sum, which the bank granted in two instalment of $8,280,000 and $2,780,000.

Stating further that the terms of the agreement as contained in the offer letter that the facility shall be secured by the 4th defendant assigning 25 per cent of its interest in favour of the bank and that by the agreement the oil company was obligated to execute an irrevocable mandate assigning the percentage to the bank but it failed to do this.

Zenith Bank also alleged that following the terms of the credit facility advanced to the 4th defendant, the oil company prepared an irrevocable mandate assigning 100 per cent of its interest in the oil bloc to the bank to serve as security for the credit but the oil company refused to execute the mandate.

The plaintiff also claimed that since the maturity of the credit facility, the 4th defendant has willfully and persistently refused and failed to liquidate same and that from the onset, the oil company has the intention not to repay the facility and that is the reason why it failed to execute the mandate.

Zenith Bank also alleged that as at February 20, 2011, the sum of $15, 900, 089. 99 was outstanding in the account being the unpaid credit facility plus interest.

However, all the defendants are yet to file their counter affidavit to the suit.

Source: Compass