Case Commentary/Press Report
Background
The Federal Republic of Nigeria (FRN) claimed damages of $875,740,000.03, in contract and tort, in respect of money paid out of a “Depository Account” by the JP Morgan Bank (JPMC). These payments were made in August 2011 (in the sum of c.$800m) and August 2013 (in the sum of c.$75m). The Payments were made by JPMC to an entity called “Malabu”. This was in respect of an oil prospecting licence called “OPL 245”. Nigeria’s case is that those sums were paid in furtherance of a fraudulent and corrupt scheme. The FRN was therefore, the victim of this scheme.
JPMC presented several technical defences. These include the so called ‘No Quincecare Duty’ because– that duty was excluded by contract. It was also asserted that JPM’s role under the Depository Agreement was intended to be, “largely automatic or mechanical”. As leading counsel for JPM put it in oral submissions, the bank’s role was “to act like an ATM machine or a robot”.
The judgment did not find fraud and, the FRN’s case failed. Cockerill J however, highlighted the presence of very unattractive features in the transactions and an association with past corruption. Yet the judge concluded that this were not enough to trigger the duty in relation to a specific fraud in 2011 (see para [347] of the judgment). Cockerill J maintains a highly artificial distinction between significant features of a transaction which highlight high risks that are relevant for Anti Money Laundering procedures on one hand and other general financial crimes and wider corruption on the other hand. The Court concludes that JPMC was not ‘on notice’ of a fraud in relation to the 2011 payment. Even though JPMC was on notice for the 2013 payment, the test for gross negligence was not met. The judgment will be studied by banking law experts for years to come.
Vindicates Fat cats and money bags
This case has put a smile on the faces of banking fat cats. As a result of its narrow interpretations it may also have jeorpardised international anticorruption work. There are many ramifications of this unsatisfactory judgment. The effects it has on the fight against grandcorruption in Nigeria is particularly deserving of analysis. More specifically it may have negatively impacted ongoing and future prosecutions relating to the notorious Oil Prospecting License 245 scandal. The effects on the legal attempts to bring the former Attorney General of the Federation, Mohammed Bello Adoke to book deserves special attention.
The London judgment has brought sheer disappointment to anticorruption campaigners both in Nigeria and abroad. This is particularly true for those seeking to expose Adoke’s role in Nigeria’s most scandal ridden oil deal. It appears that to exonerate JPMC from ultimate liability for Nigeria’s losses the judge arguably had to whitewash Adoke’s failings. The court’s reasoning curiously rendered a most artificial and favorable view of Adoke’s official as well as personal actions and activities. For JPMC to avoid liability a scandalized Nigerian official facing multijurisdictional censure is now near completely exonerated in the eyes of British law.
It is important to discuss this unsatisfactory outcome because of the effects this judgment will have on anticorruption and transparency law and practice in Nigeria. The judgment may also have implications on a couple of ongoing criminal and civil actions in Nigeria against this former law chief. Mr Adoke has of course, seized on this recent judgment in a London Commercial Court as exonerating him of any wrongdoing related to the controversial sale of the OPL 245 oil licence to multinationals Shell and Eni, which resulted in over a billion dollars being paid to Malabu Oil & Gas, a company owned by Dan Etete who had effectively awarded the licence to himself when he was an oil minister during the notorious military regime of Ibrahim Abacha.
The deal was alleged by the Nigerian government to be corrupt and fraudulent. The FRN sued JP Morgan Chase bank for negligence in its handling of the funds from the deal. Nigeria identifies three masterminds of the scheme. They are Mr Dan Etete (1998), Mr Bayo Ojo (2006) and Mr Mohammed Adoke (2011). The judge in the London case controversially concludes that Adoke acted honestly in negotiating the deal. The judgement nonetheless describes the whole deal as an “unattractive” transaction with a “murky” past mired in corruption.
The judgment has apparently taken a very liberal view of several actions and situations involving Adoke. There are significant instances where the court admits that the fact ‘looks sinister’. Nevertheless through various contortions of logic it excused things away. The learned Mrs Justice Cockerill apparently does not fully understand the complexities and nuances of Nigeria’s grave problems with grand-corruption.
Much of the evidence on the corruption of Nigerian officials rested on matters and issues the Judge really would have been able to take judicial notice of if the court was familiar with the terrain of grand corruption in Nigeria. Indeed the judgment appears to confess to a sheer lack of familiarity with financial realities of Nigerian life. For instance, as the FRN alleged between 2011 and 2013 Mr Adoke as Attorney General was making property deals for himself running into millions of dollars. Mr Adoke received over $2 million into his account in cash. Yet the judgment concluded that the mere fact of the house being bought cannot be enough without more to conclude that Mr Adoke was living above his income. A Nigerian judge will of course be in a better position to understand the types of sums that suggest a Nigerian official leaving above his means.
Adoke’s spin on the judgment is thus in a sense understandable, even as it may be opportunistic. This is because he is facing three sets of charges in Nigeria for corruption and other offences related to the OPL 245 deal. However, on an impartial reading, the judgment fails to provide Adoke with a safe habour. On the contrary, it provides grounds for new charges being brought against the former Attorney General. It also may have complicated his defences in a defamation claim that has been lodged by against him. This suit is brought by Olanrewaju Suraju, chair of the reputable Human and Environmental Development Agenda (HEDA).
Adoke’s “erroneous or false” denials
To take the defamation case first. Adoke is alleged to have defamed Suraju by accusing him of forging a taped press interview and an email. These were presented in evidence during the Milan trial of Eni, Shell and others for corruption relating to the OPL 245 deal. The companies and other defendants were acquitted by the Milan Court of First Instance – a judgment that is currently being appealed.
The London judgment despite its shortcomings is scathing about Adoke’s version of events. The judge accepted that the tape recording, said to be between Adoke and an Italian journalist, was genuine. The judgment stated
“Mr Adoke’s (apparently erroneous or false) denial of the interview is again not to his credit; but one can easily see that his denial might well result from embarrassment”.
The judge’s hypothesis is that Adoke’s denial might result from embarrassment. This finding is bad and it remains one of the curious conclusions reached in this case. On sheer semantics alone it is clear that the denial might well result from other reasons other than embarrassment. At any rate embarrassment is not a legal defence to making false statements before courts of law. Furthermore, paragraph 289 of the judgment, refers to the former Attorney General’s conducts in “misplaced flirtation and conveyance of gossip flirtatious banter” with a female journalist. The court noted that this “certainly portrays Mr Adoke in a not very creditable light”.
Needless to mention that these are hardly ringing endorsements of Adoke’s character. Apparently therefore, Adoke’s allegations against Olanrewaju Suraju may be no more than a frame up. This will be in furtherance of his covering up the inconvenience of ‘embarrassment’. Embarrassment however,does not provide a legal basis for bringing the false allegations for forgery against Mr Lanre Suraju. These areas would certainly be ripe for interpretation before the Nigerian courts dealing with the on ongoing disputes. The implications of the sort of vexatious litigation and official harassment brought against anticorruption campaigners by Adoke are dire. It is certain to produce deleterious outcomes in Nigeria. It will also negatively impact the push for anticorruption and transparency advocacy and the rule of law in developing states.
The judge also ruled as a fact that the disputed email, which was signed by a Mohammed Bello Adoke and sent to JP Morgan Chase bank from an email address associated with a company owned by Aliyu Abubakar, was indeed sent by Adoke (despite his denials). Moreover, the court accepted that it was sent when Adoke was no longer in office as Attorney General. The judge accepted that, on the face of it, “this looks sinister” but offered an alternative interpretation. This was namely that it could be viewed as the action of “a responsible ex (and future) minister attempting to manage business which ex hypothesis is in the country’s interests in a constructive and efficient manner”.
To begin with the actions are clearly illegal under Nigerian law and Adoke knew that. Indeed, on his own admission, he was at the time “a private citizen” and it would have been (in his lawyer’s words) “inconceivable” for him to have acted in an official capacity when he was not an officer of the government. The London court found that he did pursue the matter in exactly the capacity of a private citizen. We note with satisfaction that Mrs Justice Cockerill’s ruling arguably, places Adoke in a potentially precarious position. At the very least, this goes towards the mental element of the possible offences. This may crucially be established after a thorough revisit of the matter and prompt investigations by the requisite Nigerian authorities.
“Demonstrably wrong in some particulars”
The London judge also suggested that Adoke had used his autobiography “to improve on the facts or sanitize aspects of his past of which his public might not approve”. Again, hardly a ringing endorsement of his character. Critically, the judge ruled that Adoke’s account of the OPL 245 deal was “demonstrably wrong in some particulars” – and that his account of a property transaction that is alleged to have been a vehicle for an OPL 245-related bribe was “not compelling – indeed it is not entirely comprehensible”.
Nonetheless, given the evidence before her, the Judge concludes that “on the balance of probabilities” Adoke “was not bribed”.
The key words here are “given the evidence before her” and “on the balance of probabilities”. Unlike the judges in Milan, Cockerill J does not rule that there was no case to be answered. On the contrary, she found that the material supporting a conclusion that there was fraud “was quite as strong” as the material consistent with a conclusion that there was no fraud. In what she perceived to be such finely balanced circumstances the judge appeared to give herself no option but to rule in the manner she did. The English judicial instinct is not to find for fraud unless there are compelling reasons and facts to do so. It is important to note that the facts took place in a jurisdiction that the judge is not familiar with. Furthermore, the passage of time and changes in government make evidence more difficult to adduce.
Which takes us to the evidence before the London court. Mrs Justice Cockerill complained that no witnesses had been called by the Government of Nigeria to substantiate its corruption allegations. She claimed therefore, to be unable to test the “oddities and question marks” surrounding corruption aspects of the case.
This highlights the imperatives for continued vigour in Nigerian criminal and civil proceedings relating to the OPL 245 deal. Nigerian courts will not be placed at this disadvantage in the OPL 245-related proceedings bought by the EFCC against Adoke. There is likely an abundance of evidence in the defamation case bought by Olanrewaju Suraju. Indeed a range of witnesses are expected to be called. Unlike in London, key witness will be subject to cross examination. Their evidence and credibility will be tested before the courts.
Milan versus London: Did Adoke Benefit?
The lack of witnesses and the documentary evidence put before the London court may also explain why it reached a different conclusion from the judges in Milan on whether or not Adoke received a benefit from the OPL 245 deal.
Mrs Justice Cockerill found that the evidence that monies flowed to Adoke “is not so clear”. In particular, she ruled that there was a “complete lack of a documentary link” between cash payments made to Adoke and the payments arising from the OPL 245 deal to companies belonging to Aliyu Abubakar. By contrast, the Milan judges, who had the advantage of witness testimony from the EFCC’s chief investigator, ruled as a fact that Adoke “received a benefit deriving directly from the funds flowing from the OPL245 transaction” amounting to “several million dollars”.
The Milan judges posited that this payment might have been for legal services provided by Adoke to Etete. Thus, introducing a reasonable degree of doubt over any illegality in the payments. However, this does not help Adoke. His solicitors in London have denied that he ever acted as counsel to Dan Etete or had a client/solicitor relationship with him.
The 1998 Award was fraudulent and corrupt – so why did Adoke settle?
The London judge ruled that the 2011 OPL 245 deal was legitimate. Yet she left no doubt that the original award of the OPL 245 license to Malabu was corrupt. She also ruled that Etete had a substantial beneficial interest in Malabu from 1998 until at least after the payments were made to Malabu in 2011. She also found that Etete benefitted financially from those payments. Moreover, the judge found that knowledge of Etete’s ownership of Malabu and his self-grant of the OPL 245 license “appears to have been common currency”.
This raises the question: why did Adoke, as Attorney General, not prosecute Etete and strip him of the license? Instead a deal emerged whereby Etete benefited from his corruption? An internal Shell email dated 1 December 2010 records that, when Adoke learned that Sani Abacha was claiming ownership of Malabu, he had told Abacha that “any such move will result in forfeiture . . . as ‘fruits of corruption'”. So why did the same not apply to Etete?
Even if forfeiture was not an option, a settlement based on Etete surrendering the licence in return for not being prosecuted was open to the Government. The London judge makes this clear. Would the Court have taken such a liberal view of such actions by the UK Attorney General? Does this aspect of the judgment not smirk of relativism of morals and transparency standards? The answers to these questions reveal the inconclusiveness of judicial reasoning in this case.
Nigeria must stand firm
Citing the London and Milan judgments, Adoke has called on the current Attorney General to discontinue the cases against him. He suggests a “refrain from wasting Nigeria’s hard-earned foreign exchange by way of legal fees on local and foreign counsel in a bid to prove the existence of a fraud that never was”.
Nigeria should resist this siren, self-serving plea. Firstly, because many of the charges against Adoke do not relate to fraud but hang on other alleged criminal offences. For example, there are issues concerning unlawfully granting tax and other benefits to Shell and Eni. Secondly, the evidence before the Nigerian courts including witness evidence are wider than that before the courts in London and Milan.
Justice in Nigeria is not to be allowed to rest on rulings outside of Nigeria. It must be contested in Nigeria under Nigerian law and the scrutiny of the Nigerian courts. The London judgment will for a long time stand as further evidence of an imperialistic and relativistic English justice. This is more especially revealed in international commercial matters and in relation to African and other developing states. This is what makes it imperative for Nigeria to pursue a sovereign redeeming jurisprudence as an independent country. The imperatives are clear, charges against Adoke and the other accused persons must be pursued. The rule of law demands nothing less.
Gbenga Oduntan and Akalemwa Ngenda
Coordinating Attorneys
World Anti-Corruption Research Network (WARN)
Centre for Critical International Law, UNIKENT.
Endnotes
- “Malabu Scandal: Anti-corruption group sues Adoke for defamation, demands N100 million” Premium Times July 5, 2021, available at https://www.premiumtimesng.com/news/more-news/471806-malabu-scandal-anti-corruption-group-sues-adoke-for-defamation-demands-n100-million.html accessed 08/07 22.
- Evelyn Usman, “Alleged forgery: FG files charges against HEDA’s boss” Vanguard October 11, 2021, available at https://www.vanguardngr.com/2021/10/alleged-forgery-fg-files-charges-against-hedas-boss-2/ accessed 08/07 22.
- FRN v. Mohammed Adoke FHC/ABJ/CR/39/201. available at https://shellandenitrial.org/wp-content/uploads/2018/08/1-Adoke-etc-Nigeria-charges-scanned.pdf accessed 08/07/22.
- Gbenga Oduntan and Iris Boussiakou, Fixing Illicit Financial Flows: A Critical Review of UK and UAE policies, laws and Practices in Financial and Non-Financial Institutions – Background Information available at https://hedang.org/blog/fixing-illicit-financial-flows-a-critical-review-of-uk-and-uae-policies-laws-and-practices-in-financial-and-non-financial-institutions-background-information/ accessed 08/07 22.
- Global Witness, Shell Knew Report April 10, 2017, https://www.globalwitness.org/en/campaigns/oil-gas-and-mining/shell-knew/ accessed 09/07/22.
- In The Federal High Court of Nigeria in The Lagos Judicial Division Holden at Lagos In The Matter Of An Application By Incorporated Trustees Of Heda Resource Centre For Judicial Review In The Form Of An Order For Mandamus. Suit No: …Between Incorporated Trustees of Heda Resource Centre … Applicant and Attorney General of Federation … Respondent available at https://shellandenitrial.org/wp-content/uploads/2018/07/ORIGINATING-MOTION-HEDA-V-AGF-040418-FINAL.pdf accessed 08/07/22.
- Olalekan Adetayo, “OPL 245: I’ve been vindicated again, says ex-AGF Adoke” The Punch 15th June 2022 available at https://punchng.com/opl-245-ive-been-vindicated-again-says-ex-agf-adoke/ visited 08/07/22.
- The Federal Republic of Nigeria v JPMorgan Chase Bank, N.A [2022] EWHC 1447 (Comm) (FRN v JPMC).