BY VIVIAN MICHAEL
A High Court of the Federal Capital Territory (FCT), Abuja, has nullified arbitration proceedings initiated at the International Chamber of Commerce (ICC), London, in connection with the acquisition of Oil Mining Lease (OML) 29 by Aiteo Eastern E&P Company Limited.
The ruling followed an application by minority stakeholder Tempo Energy Nigeria Ltd., which accused major lenders—including Shell, the African Finance Corporation (AFC), and several Nigerian banks—of violating subsisting court orders by pursuing the arbitration despite an injunction issued in January 2021.
Justice S.B. Belgore, presiding over the matter, ruled that the arbitration proceedings—conducted between 2021 and 2024—were in flagrant disregard of the court’s binding orders and declared them null and void. He also described objections raised by the defendants’ counsel against the court’s jurisdiction as “incompetent” and “an abuse of court process.”
The legal tussle stems from Aiteo’s 2014 acquisition of OML 29 and the Nembe Creek Trunk Line (NCTL) from Shell in a $3.01 billion deal, one of Nigeria’s largest oil asset transactions. The purchase was financed through a complex web of equity and debt financing, led by billionaire Benedict Peters, who personally contributed nearly $1 billion in equity and closing costs. Tempo Energy and other smaller investors provided additional capital totalling $136 million.
Despite the deal’s completion, disputes soon arose over the performance and condition of the acquired assets. In a separate but related matter, Aiteo sued Shell for $2.5 billion, accusing the oil major of fraud, misrepresentation, and failure to disclose the true state of the oilfields.
According to court filings, several financial institutions—among them AFC, Ecobank Nigeria, First Bank, GTBank, Fidelity Bank, and Zenith Bank—initiated parallel legal and arbitration proceedings in the UK without involving Tempo Energy, one of the equity contributors.
In response, Tempo Energy approached the FCT High Court on January 14, 2021, seeking injunctive relief to halt the foreign proceedings. The court granted interim orders on January 22, 2021, barring the defendants from further actions in the ICC or the English courts pending full hearings.
Nevertheless, the ICC arbitration continued for three years, prompting Tempo to seek redress through a contempt and restorative application. Justice Belgore reaffirmed the validity of the 2021 injunctions, ruling that all actions taken in defiance of those orders—including the arbitration—were void.
Earlier in April 2025, the Court of Appeal in Abuja unanimously upheld the interim orders, dismissed the appeal filed by the defendants as an abuse of process, and awarded N1.5 million in costs against them. The appellate court also warned that willful defiance of valid court orders could not be excused and mandated an accelerated hearing of the substantive suit.
At the resumed High Court hearing in May 2025, Tempo’s counsel, Kehinde Ogunwumiju, SAN, pressed for a formal nullification of the arbitration. Justice Belgore agreed, ordering all parties to desist from further contemptuous actions and awarding an additional N500,000 in costs to Tempo.
The matter has been adjourned to September 29, 2025, for hearing of consolidated interlocutory applications.
Documents in the suit show that approximately $2 billion was raised in debt from local and international lenders to fund Aiteo’s acquisition: Zenith Bank – $323 million; First Bank of Nigeria – $200 million; Guaranty Trust Bank (GTBank) – $200 million; Fidelity Bank – $175 million; AFC – $125 million; Ecobank Nigeria – $100 million; Union Bank – $100 million; Sterling Bank – $60 million; Shell Western Supply & Trading – $512 million
Benedict Peters’ equity commitment included over $898 million in cash plus an additional $257 million in ancillary and closing costs.
The judgment represents a significant pushback against the tendency of powerful commercial interests to bypass domestic courts through foreign arbitration—even in cases under Nigerian jurisdiction. With key financial players now restrained from further pursuing the ICC process, attention will shift back to Abuja, where the consolidated suits may determine the future of one of Nigeria’s most contested energy assets.