PUC Records Another Remarkable Victory at The Federal High Court for Dangote Group

Paul Usoro and Co (“PUC”) reaffirmed its place as the foremost commercial litigation firm after successfully representing and securing a remarkable victory for Dangote Industries Limited & Dangote Cement Plc (“Dangote Group”) at the Federal High Court, Benin Judicial Division in a twin decision delivered on 10 January 2022 in the Suit No.: FHC/B/CS/7/2016:BUA INTERNATIONAL LIMITED & ANOR v. HONOURABLE MINISTER OF MINES & STEEL DEVELOPMENT & ORS (“BUA Group Suit”) and  Suit No. FHC/B/CS/74/2016 between DANGOTE INDUSTRIES LIMITED & ANOR V BUA INTERNATIONAL LIMITED & ORS (“Dangote Group Suit”).  Beyond the recondite issues of law canvassed by our Firm, this precedent-setting decision prevented what would have become a near-catastrophic tsunami in the Nigerian mining industry. Had PUC’s arguments been rejected, the outcome would have been the nullification of all mining leases issued by the Mining Cadastre Office (“MCO”) since 2008 when the agency was created, and this would have thrown the entire mining sector into a turmoil.

The legal tussle started in 2016 following the Suit filed by the BUA Group to challenge the Dangote Group’s right over the Mining Lease No. 2541ML located at the border town between Okpella in Edo State and Okene in Kogi State. The BUA Group also sought to enforce their rights over the Mining Lease Nos. 18912 and 18913 which they claim were granted to them. The Dangote Group counter sued the BUA Group to challenge the latter’s  acts of trespass, wrongful and illegal exploitation of the claim  over the mining area covered by  2541ML which was historically granted on February 01, 2008 by the Mining Cadastre Office (“MCO”)and the Honourable Minister of Mines and Steel Development pursuant to the provisions of the Nigerian Minerals and Mining Act, 2007 (‘Mining Act) to Ado Ibrahim & Company Limited (“AICO”) and subsequently transferred to the Dangote Group in 2014.

The BUA Group Suit

In relation to the BUA Group Suit, PUC on behalf of the Dangote Group had filed a Preliminary Objection challenging the jurisdiction of the Court to entertain and hear the case on the ground that the BUA Group had lost their locus standi to continue to maintain the Suit as the Mining Lease Nos. 18912 and 18913 which they sought to enforce had long expired in 2018 and their applications for renewal were outrightly rejected. There were also other objections raised by the MCO who was sued as the 2nd Defendant in the Suit and there was a consolidated Ruling in respect of the MCO objections and the PUC Objection.

In the Preliminary Objection filed by PUC, we had amongst other things argued that the refusal of the Mining Cadastre Office to renew the applications made by the BUA Group automatically extinguishes their rights over the Mining Lease Nos. 18912 and 18913. We also argued that the reliance by the BUA Group on section 148 of the Mining Act, 2007 is totally misplaced. The said section provides that “Where the holder of a mineral title applies during the pendency of his title for a renewal of the Mineral title, the current Mineral title shall remain in force until the date of the renewal of the Mineral title or the refusal of the application.”

PUC’s contention on behalf of the Dangote Group was that the said provision contemplates the existence of a pending application to renew a mining lease and where as in this case, we have shown that there are no existing applications to renew, the BUA Group cannot rely on that section.

The Court in its ruling agreed totally with PUC’s arguments and rejected the arguments of the BUA Group that their mining leases remain subsisting during the pendency of their application for renewal and the Court went further to hold that section 148 of the Mining Act, 2007 does not apply or assist the BUA Group’s case as their application for renewal has been refused by the Mining Cadastre Office. In the final analysis, the Court struck out the BUA Suit and effectively affirmed our arguments that the BUA Group Mining Lease Nos. 18912 and 18913 have become invalid, expired and ineffective.

The Dangote Group Suit

Whilst PUC’s Preliminary Objection against the BUA Group Suit and their Mining Lease Nos. 18912 and 18913 was decided in our favour, the Court in another Ruling also affirmed our arguments in opposition to the BUA Group Preliminary Objections against the Dangote Group Suit. As we noted above, the Dangote Group had in the same year 2016 counter-sued the BUA Group in Suit No. FHC/B/CS/74/2016. The BUA Group had in response filed two separate Preliminary Objections seeking to snuff life out of the Dangote Group Suit. The Preliminary Objections which were premised on multiple grounds were targeted at nullifying the Mining Lease No. 2541ML belonging to the Dangote Group by urging the Court to decline jurisdiction to entertain and determine the Dangote Group Suit.

PUC on behalf of the Dangote Group, mounted a very robust opposition to the Objections and advanced convincing arguments against all the points, legs and grounds of the Objections. In its Ruling dismissing the BUA Group Objections, the Court resolved all the issues against the BUA Group. One of the fundamental points canvassed by PUC on behalf of the Dangote Group is on the interpretation of section 5 of the Mining Act, 2007 and section 65 of the same Act in relation to the powers of the Minister of Mines and the Director General of the Mining Cadastre Office over the grant of mining lease. The BUA Group had argued that it is only the Minister of Mines who has the power to grant and issue mining leases and that the Mining Lease No. 2541ML owned by the Dangote Group which was earlier granted and issued to the AICO Ado Ibrahim & Co Ltd (“AICO“) in 2008 by the MCO was invalid as it was not issued by the proper authority. The implication of the arguments of the BUA Group and the devastating effect on the Mining Industry need to be appreciated beyond this Suit. If the said arguments were to be upheld, it would mean that all the mining leases issued by the Director General of the MCO since 2008 when the MCO was created would become invalid and void. One can only imagine the tsunamic impact that would have on the Nigerian Mining Sector. Relying on the letters of the law, PUC had argued that section 5 of the Mining Act, 2007 expressly empowers the MCO to amongst other functions, issue mineral title. We argued that section 164 of the Mining Act, 2007 defines “mineral title” as follows: “Mineral title” means Reconnaissance Permit, Exploration Licence, Small Scale Mining Lease, Mining Lease, Water Use Permit, or Quarry Lease or any one of these titles, consistent with the context in which the term “Mineral title” is used.

It was also PUC’s argument that the power of the Minister of Mines under section 65 of the Act was made subject to the power of the MCO under section 5 of the same Act in view of the introductory provision of the former section which reads “Subject to the provisions of this Act…” In agreeing with PUC, the Court first of all affirmed the validity of the 2541ML granted to the AICO in 2008 and subsequently transferred to the Dangote Group in 2014.The Court thereafter  held  that the MCO has the power under section 5 of Mining Act, 2007 to issue mining lease and that the power of the MCO under the said section 5 is not whittled down however by the powers of the Minister under section 65 of the Mining Act, 2007. The Court further affirmed the PUC arguments that the intention of the law makers is never to make the Minister the sole authority for granting mining leases in Nigeria in view of the express provision of section 5 of the Mining Act, 2007. Other ancillary issues raised in the BUA Group Objections were also resolved against them, and accordingly dismissed.

Indeed, the arguments of PUC leading to this epoch decision have contributed immensely to the development of the Nigerian Mining sector as well as the advancement of Nigerian jurisprudence on the principles of mining laws in Nigeria. This Ruling has also given the holders of the mining leases issued by the Mining Cadastre Office (MCO) in Nigeria the comfort and assurances that their leases are validly issued under the law. Lastly, the decision has settled the seeming confusion in relation to the issue of whether the Minister of Mines is the sole authority to grant and issue mining lease in Nigeria by affirming the powers of the Mining Cadastre Office in this regard.

Leave a Reply

Your email address will not be published. Required fields are marked *