Trailblazing PUC: The Case of Mobil Producing Nigeria Unlimited & Exxon Mobil Corporation v. Registered Trustees of Mineral Resources Awareness Initiative of Akwa Ibom State & Anor.

Click here to read the CTC of the judgement.

Just within days of preventing a calamitous upset in the Nigerian Mining sector by securing a court victory in what is arguably Nigeria’s biggest mining legal tussle, Paul Usoro & Co (“PUC”) made another profound statement on Friday 14 January 2022 by recording a second tumultuous courtroom win, the echoes of which this time around, reverberated well beyond the shores of Nigeria right up to the offices of international oil giant, Exxon Mobil Corporation, in the United States of America.

In a Suit commenced by a Writ of Summons, Statement of Claim and other accompanying Processes dated 12 May 2017 (“Originating Processes”) and based on a  fiat issued to them by the Attorney General of Akwa Ibom State, the Registered Trustees of Mineral Resources Awareness Initiative of Akwa Ibom State and one other instituted Suit No: FHC/UY/CS/67/2017; Registered Trustees Of Mineral Resources Awareness Initiative Of Akwa Ibom State & Anor V. Mobil Producing Nigeria Unlimited & Anor at the Federal High Court, Uyo Judicial Division against Mobil Producing Nigeria Unlimited (the 1st Defendant or MPNU) and Exxon Mobil Corporation, a foreign corporation resident in the United States of America (the 2nd Defendant or EMC). The 1st Plaintiff, a non-governmental organization claiming to act for the people of Akwa Ibom State was seeking an assortment of declaratory, executory and monetary reliefs, principal amongst which was for an order of Court compelling MPNU to relocate its head office from Lagos State to Akwa Ibom State. The Plaintiffs anchored this interesting relief on a document called the Standard of Business Conduct document published on EMC’s website which the Plaintiffs claim constitutes a contract between them on the one hand and MPNU and EMC on the other. The Plaintiffs assert that by the said standard of Business Conduct issued by the parent company EMC and binding on the subsidiary, MPNU, the said MPNU was obligated to locate its headquarters in Akwa Ibom State as against Lagos State because MPNU’s operations are in Akwa Ibom State.

The Plaintiffs also made a claim for the payment/remittance of accrued tax from 1987 till the date of Judgment for sums running into billions of dollars.

Upon service of the Originating Processes on MPNU and EMC, PUC was briefed to represent both companies and upon a review of the 91 paragraphed Statement of Claim and the bundle of accompanying process documents, we carefully and methodically evolved a comprehensive strategy for mounting the best possible defence for our clients. In this wise, PUC immediately filed a joint Notice of Preliminary Objection challenging the jurisdiction of the Federal High Court to entertain the Suit on the following grounds:

  1. The cause of action in the Suit is indubitably statute-barred and completely extinguished by virtue of the clear and unequivocal provisions of Section 16 of the Laws of Akwa Ibom State of Nigeria; alternatively
  2. The Court lacks the requisite jurisdiction to entertain the claims against EMC, a company domiciled outside the territorial jurisdiction of the Court, to wit, the territory of the Federal Republic of Nigeria, and not having any presence or business whatsoever in Nigeria.
  3. The name of EMC be struck out from the Suit as the Plaintiffs’ Originating Processes disclose no reasonable cause of action whatsoever and howsoever against the EMC.

The Federal High Court took arguments for and against the said joint Preliminary Objection and on 25 May 2018 delivered its Ruling wherein it held that it had the requisite jurisdiction to entertain the Respondents’ claims and consequently refused all the reliefs sought by the MPNU and EMC on the grounds, inter alia, that “the continued presence/extraction of oil minerals in the affected areas of Akwa Ibom State” took the action outside the scope of Section 16 of the Limitation Law of Akwa Ibom State. Not being satisfied with the Federal High Court’s Ruling, PUC on behalf of the Companies appealed the decision.

Upon appeal to the Court of Appeal sitting at the Calabar Judicial Division, Cross Rivers State, PUC re-presented its arguments made before the Lower Court and significantly urged the Court to disregard the Respondents attempt to rewrite their claims using their Brief of Arguments. The Court in adopting the issues raised by PUC in determination of the Appeal per the Lead Judgment of Muhammed L. Shuaibu, J.C.A, found that the Suit before the Lower Court was rooted in an alleged contract created by the Standard of Business Conduct document and that by the Respondents’ own showing, they became aware of that document in November 2011. The Court also found that since the Respondents did not plead duty of care owed to them by MPNU and EMC or the breach of such duty as well as the injury suffered arising from the breach, the Respondents’ Suit was clearly rooted in contract and had nothing at all to do with negligence as argued by them and erroneously relied upon by the Lower Court. The Court went on to find that since the Suit was filed on 12 may 2017 outside the 5year period prescribed by Section 16 of the Limitation Law of Akwa Ibom State for actions rooted in contract, it was caught up by the Limitation Law and invariably statute barred. The Court of Appeal held that Section 16 of the Limitation Law of Akwa Ibom State applied to deprive the lower Court of jurisdiction because the action is deemed not to exist and thereby incompetent.

In line with PUC’s submissions, the Court of Appeal also held that generally, a subsidiary company has its own separate legal personality, and the act of a subsidiary company cannot be imputed to the parent company and vice versa as each is capable of suing or being sued in its own name. On the nexus between the Respondents’ claim and EMC, the Court of Appeal held that the Federal High Court was wrong to have held that the Respondents’ claim disclosed a reasonable cause of action against EMC in the absence of a prima facie case or issue. The decision of the Federal High Court was set aside and the Suit before it struck out for lack of jurisdiction.

PUC’s contentions in this matter gave the Court of Appeal a beautiful opportunity to, by its decision, reaffirm the hallowed principles of law on Limitation of Actions and the principle of a distinct corporate legal personality by companies and transfer of liabilities amongst companies with parent subsidiary relationship that was evolved in the celebrated case of Salomon vs Salomon, well over 100 years ago.  PUC remains a bastion of knowledge and a repository of some of sharpest legal minds in the country.


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