U.S. court discharges NNPC of $2.7bn debt to ESSO

Posted by GRANDNEWS | 8 September 2019 | 369 times


NNPC Towers

Mother luck smiled on Nigeria escaping another huge debt to be paid to an offshore company again after the P&ID $9.6billion recently incurred as a U.S. Southern District Court of New York delivered judgment in favour of the Nigerian National Petroleum Corporation (NNPC) against ESSO Exploration and Production Nigeria Limited and Shell Nigerian Exploration and Production Company Limited (collectively ESSO) in a case involving $2.7bn debt.

TheNewsGuru reports that the Corporation disclosed this in a statement issued by Mr Ndu Ughamadu, the Spokesman for the corporation, on Sunday in Abuja.

It will be recalled that a court hearing was held on February 1, in the protracted litigation arising from the disputes between NNPC and ESSO regarding the implementation of the Production Sharing Contract dated May 21, 1993 covering OPL 209/OML 133.

ESSO referred its claims to arbitration in Nigeria and obtained an Arbitral Award of 1.799 billion dollars on Oct. 24, 2011, with annual interest running at LIBOR plus 4 per cent.

NNPC challenged the Award at the Federal High Court, Abuja, which in May 2012, ordered that the Arbitral Award be set aside.

Notwithstanding the decision of the Nigerian Court, ESSO applied to the United States District Court, Southern District of New York for recognition and enforcement of the Arbitral Award.

NNPC challenged ESSO’s Application on the ground that there was no Award, which the US Court could enforce as a competent Court in Nigeria had since set aside the Award.

NNPC also contended that there was no legal basis for the US Court to exercise jurisdiction over it as it had no presence in the United States, owned no property and does not conduct its businesses therein.

ESSO contended that NNPC is the alter ego of the Federal Government of Nigeria, owned assets in the USA including bank accounts and also conducts businesses in the USA


Source: GRANDNEWS

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