Nigeria is m seeaking frantic efforts to stop Enron Nigeria Power Holding (ENPH) from enforcing a $22 million arbitration award that could risk the country’s assets in the US, The Cable can report.

 

ENPH, an incorporation of the defunct Enron International, is seeking a turnover of Nigeria’s claim to proceeds from an $80 million mega yacht that was sold in the US.

In 2019, a US federal court had given Nigeria approval to sell the yacht, named “Galactica Star”, as part of an ongoing corruption case against Kola Aluko, Nigerian businessman who allegedly acquired it with diverted profits from oil sales  in Nigeria.

 

The yacht has been sold for $37 million and ENPH is trying to lay claim to part of the proceeds in enforcing its $22 million arbitration award.

 

Abubakar Malami, attorney-general of the federation (AGF) and minister of justice, is now seeking approval from President Muhammadu Buhari to negotiate the award to protect the country’s assets, TheCable can report.  Hetold the  president that ENPH could further target the country’s assets in California, New York and other states in America.

 

On December 6, 1999, ENPH had entered a power purchase agreement (PPA) with the Lagos state government, guaranteed by the federal government through the now- defunct National Electric Power Authority (NEPA), later named Power Holding Company of Nigeria (PHCN). ENPH was to build, arrange, finance and run electricity generating plants and natural gas pipelines in Lagos state. NEPA suspended the PPA on December 15, 1999 for renegotiation.

However, construction continued on the different phases of

the porject. By September 30, 2000, phases one and three of the contract were completed while negotiation for phase two of the construction failed.

At the time, Enron International had gone bankrupt, but it wrote to the federal government that this would not affect ENPH, the Nigeria arm, in carrying out its own part under the contract.

After several failed attempts at negotiating, ENPH commenced an arbitration against Nigeria on June 13, 2006  att international chambers of commerce court of arbitration in London, accusing the government of breach of contractual agreement.

Six years later, on November 12, 2012, a final award (“Quantum”) was given against Nigeria in the sum of $11.22 million, with 2 per cent interest from June 13, 2006, and also expenses for legal services.

Attempts by the Nigerian government to negotiate the settlement failed.

On July 19, 2013, ENPH, under the convention on the recognition and enforcement of foreign arbitral awards which Nigeria is also a signatory, approached the US court in the southern district of Texas to seek enforcement of the. award

The court granted ENPH the motion for confirmation of the award on October 16, 2015, prompting Nigeria government to appeal the judgement at the US district of Columbia circuit.

ENPH had also argued that Nigeria, following the contract, had waived its rights to challenge the award. Nigeria’s appeal was subsequently dismissed, and the court affirmed the order to confirm the award.

In an interesting approach, ENPH also sought from the court a writ of garnishment to be issued against the JP Morgan Chase Bank on the ground that it has in its possession commercial assets belonging to Nigeria which could be garnished in satisfaction of the judgement in favour of ENPH.

The company’s prayer was, however, denied. And in a fresh move on March 9, 2020, ENPH filed an amended application and this time asking the court for the turnover on the Galactica Star Nigerian assets.

The US department of justice (DoJ) and counsel to the Nigerian government again challenged the application, and on May 21, 2020, the court denied ENPH’s request. ENPH, however, secured another order on July 15, 2020 to  filean appeal.

In a letter dated July 28, 2020, Malami sought Buhari’s approval to negotiate the arbitration award against Nigeria in the failed power project.

Without a settlement, the AGF said, ENPH will continue to cause problems for Nigeria with different litigation which may put the Galactica case at risk.

“Without conceding, should ENPH succeed in attaching the USA v Galactica funds by deducting $22 million all that will be left for FGN will be about $5.4 million which may be less after deduction of the 3% success fee accruable to BCR,” Malami wrote in a letter seen by TheCable.

“The resultant implication would mean FGN will lose an asset it is rightfully entitled to, loss of revenue to FGN, loss of revenue as regards the huge litigation cost that has been paid to FGN counsel (disbursement and retainership fees) etc.

“In other to avoid unwarranted delay and ENPH further intervention,, it has been advised that is is in FRN’s interest to deal expeditiously with the intrusion of an unrelated issue (ENPH issue) in the repatriation of funds in the ongoing USA v Galactica case.”

Malami said without a settlement, ENPH will definitely hold up the earlier repatriation of the Galactica funds for a year or more.

The AGF asked the president to approve for Berliner Corcoran & Rowe (BCR), Nigeria’s counsel, in collaboration with the ministry of justice designated officers to proceed to engage in negotiation and settlement meeting with ENPH.

He argued that a negotiation may halt ENPH’s consideration of further action. He also added that it may reduce the present amount being claimed by the company.

Ibrahim Gambari, chief of staff to the president, in another letter dated August 13, 2020, directed Saleh Mamman, minister of power, and Zainab Ahmed, minister of finance,  to review the matter and revert with “considered views to inform Mr President’s further directives”.

The development comes at a time government is also trying to get an upturn over the $9.6 billion awarded P&ID Ltd, an Irish firm, in arbitration against Nigeria.

 

Edo Government says the ongoing Modular Refinery project at Ologbo in Ikpoba-Okha Local Government Area of the state, will on completion, drive the state’s industrial revolution quest.

Mr. Crusoe Osagie, Special Adviser to Gov. Godwin Obaseki on Media and Communication Strategy, made this known in a statement made available to the News Agency of Nigeria (NAN) in Benin on Sunday.

He said the Edo Modular and Refinery Company Ltd. and AIPCC Energy, were on the verge of completing the 5,500bpd Edo Modular Refinery, now at 70 per cent completion stage. “This is a key legacy project by the Gov. Godwin Obaseki-led

administration to recalibrate the state’s industrial base, birthed through a Memorandum of Understanding (MoU).

“The project, sited at Ologbo in Ikpoba Okha Local Government Area, would produce from its feedstock 50 per  centof diesel (500,000 litres), 25 per cent of naphtha (300,000 litres) and 20 per cent of fuel oil (200,000) litres. “The crude is to be sourced from the Nigerian Petroleum Development Company’s (NPDC) facility – oil mining lease (OML) 111, near Benin City.

“The Chinese consortium handling the construction of the modular refinery is made up of Peiyang Chemical Equipment Company of China (PCC), Sinopec International Petroleum  ServiceCorporation (SIPS) and African Infrastructure Partners (AIP),” he said.

Osaigie said the modular refinery project was among the growing list of ongoing legacy projects through MoU with local and international private investors, which included the 55MW  CCTECOssiomo Power Plant, which had been completed and ready for use.

“The Benin Enterprise and Industrial Park, which development  isongoing and the Benin River Port, for which preliminary  worksare ongoing,” he said. He said the governor was committed to resetting the economy of the state for prosperity and industrial growth. 

According to him, the local content component of the refinery  projectensures that Edo citizens are trained in welding, refinery operation and fabrication works to enable them participate in the construction of the refinery as well as its, operation post-commissioning.

“The refinery is at 70 per cent completion and we are very sure that it will soon be ready for commissioning,” Osagie said. He added that the actualisation of the project was premised on the governor’s smart thinking and financial savviness from which he mobilised funds and resources to initiate and execute the project.

“Recall that the Edo State EXCO approved the release of N700 million as redeemable preference shares (investment) in the Edo Refinery and Petrochemical Company Ltd.

“The venture is expected to create legitimate employment opportunities, thereby reducing poverty, provide job opportunities for teeming youths in the communities. “To facilitate the establishment of a fabrication yard as proposed by the promoters and create basis for expertise, professionalism and further training in the oil and gas industry.

“The take-off of the Edo Refinery and Petrochemicals Company benefits from a series of groundwork by the Obaseki-led administration that led to the setting up of Edo Investment Scheme Ltd.

 

“A Special Purpose Vehicle (SPV) to hold N2 billion investment funds in which the Ministry of Finance Incorporation (MOFI) and the Edo State Oil and Gas Producing Areas Development Commission (EDSOGPADEC) are to hold shares of 20 percent and 80 per cent respectively,” he said.

Osaigienoted that the project would facilitate the state’s investment in various initiatives across the oil and gas sector, petroleum exploration, drilling and filling stations, sales and supply of gas, agro-allied products, petroleum and petrochemical products and other related businesses