Nigeria at a court in London lost its $1.7 billion damage claim against JP Morgan Chase & Co for their participation in transferring $875 million to a company owned by Dan Etete, a former Nigerian minister of Petroleum convicted of money laundering, between 2011 and 2013.
Four years ago, Nigeria filed a legal action against an American bank, JP Morgan Chase & Co, for the bank’s role in the 2011 Malabu oil deal worth $875 million.
- The lawsuit filed by the federal government in 2017 is in relation to an ongoing legal fracas between Milan, Italy and the United Kingdom for a $1.3 billion worth of oil block prospecting license, OPL 245 by two oil giants, Shell and Eni.
- The Nigerian government claimed damages of $1.7 billion following the negligence of JPMorgan Chase & Co to properly investigate the benefactor of the funds.
- Nigeria said the funds paid by Shell and Eni were to be sent to the government’s account instead of a company’s escrow account; a fact the American bank would have uncovered if it had carried out due diligence.
- The Nigerian government argued that the American bank should have suspected foul play in a deal that saw Malabu sell 100% in OPL 245 to Shell and Eni. Nigeria further sued the American bank, JP Morgan Chase & Co, on the ground of “Quincecare duty”.
- On the other hand, the bank claimed that the company in question followed due process and completed all the checks and as there wasn’t any need for suspicion.
The court’s ruling
The presiding judge at London’s High Court, Sara Cockerill, ruled that Nigeria didn’t prove that it was defrauded. She said “with the benefit of hindsight JPMorgan would have done things differently. But again, none of these things individually or collectively amount to triggering and then breaching” its duty of care to its client. “
What you should know
- The trial that saw the American bank vindicated from the $1.7 billion damage claim by the federal government lasted for six weeks.
- Nigeria claimed damage of $1.7 billion although the oil deal is worth $875 million with the rest regarded as interest.