United Kingdom (UK) high court has ruled in favour Guaranty Trust Bank, Zenith Bank Shell, among others in the $2 billion Aiteo loans controversy.
Other parties in the verdict include African Finance Corporation (AFC), Ecobank Nigeria Limited, Fidelity Bank Plc, First Bank of Nigeria Limited, Sterling Bank plc and Union Bank of Nigeria Plc.
Aiteo is said to owe the parties in question about $2 billion which was used to purchase Nigerian Oil Assets including Shell’s OPL 29.
The loans date back to 2014 most of which came from the AFC and Nigerian Banks (75%). Shell put up the rest via a vendor facility.
Premium Times report citing court documents, said the court approved a “final anti-suit injunction” which was delivered on the first of April 2022.
Reports say Aiteo planned to take its lenders to court seeking to block an interim anti-suit injunction pushed by the lenders restraining Aiteo from a legal action that will affect an ensuing arbitration.
The banks had in 2019 requested that Aiteo repay the loans within 7 days. However, Aiteo declined, stating it was not liable to repay the loan.
Aiteo then took the lenders to court pleading for the court to declare that it was not liable to the demands of the lenders.
Aiteo had wanted a Nigerian High Court to declare a non-liability stopping the lenders from seeking arbitration in London over the debts.
Aiteo was basing its arguments on a Force Majeure which had forced it to restructure the facility but that the lenders did not agree to honour its request. And that since the lenders did not agree to restructure the facility then there was no default.
Subsequently, it got an injunction from a Federal High Court restraining the banks from taking legal action. The banks appealed but did not get a reprieve from a local court mostly due to Covid-19 induced delays to proceedings,
After protracted negotiations and legal actions failed to resolve the matter, the lenders proceeded to arbitration.
Ruling on the matter, the judge noted that the suit by Aiteo seeking a declaration that it was not liable was a breach of the arbitration agreement in the Onshore Facility Agreement.
The judge also said continuing the proceeding amounted to a breach of the arbitration agreement in the Offshore Facility Agreement.
The judge who also noted that the appellate court in Nigeria had dismissed Aiteo’s application seeking a restraining order on the lenders from commencing the arbitration suit said “That dismissal sits unhappily with the suggestion that the Lender’s Notice of Appeal had caused the Lenders to have lost their right to arbitrate.”
The court noted that since the right to arbitrate had not been waived regarding the Offshore Facility Agreement, the decision is binding on Aiteo which means it remained in breach of the arbitration agreement in the Offshore Facility Agreement in December 2020.
Consequently, the judge declared that “Thus, there is in the present case a clear case of a breach of the agreements to arbitrate. The court will in such a case grant an anti-suit injunction unless there are strong reasons for not doing so,”
On April 1, the high court in England granted the final anti-suit injunction sought by the claimants who are the lenders, meaning that Aiteo has been restrained by the court from taking any legal action against the lenders pending the determination of the suit against Aiteo