22 June 2022
TEMPLARS Advised JPMorgan Chase Bank (“JPMC”) as JPMC Won its Landmark $1.7 Billion Dispute Against the Federal Republic of Nigeria (“FRN”). The dispute arose from JPMC’s role as banker to the FRN in the Oil Prospecting License (“OPL”) 245 settlement transaction. Specifically, the FRN sued JPMC for breach of its Quincecare duty, claiming over $1.7 billion in damages over its role in the disputed 2011 Malabu oil settlement agreement. The FRN’s case was that JPMC was entitled to refuse payment as long as it had reasonable grounds to believe its customer was being defrauded.
Quincecare is a legal precedent whereby a bank should refuse to pay out, despite receiving instructions, if it believes its client will be defrauded by making such payment.
The civil suit, which was filed at the British courts in 2017, involves the $1.3 billion acquisition of OPL 245, by International Oil Companies, Shell and ENI both of which were at the centre of legal battles in Milan and the United Kingdom.
In a judgement delivered on Monday, 13 June 2022, by Mrs. Justice Cockerill of the High Court of Justice of England and Wales, the Judge held that :
(i) there was insufficient evidence that the payment instructions were a fraud on the FRN; and
(ii) JPMC did not breach its Quincecare duty to the FRN (i.e. it was not grossly negligent) in either 2011 or 2013.
Accordingly, the FRN’s claim for the sum of $1.7 billion against JPMC therefore failed.
TEMPLARS acted as Nigerian counsel to JPMC, providing Nigerian Law advise amongst other legal services and worked with International Law firm, Freshfields Bruckhaus Deringer.
The TEMPLARS team was led by Disputes Partner, Godwin Omoaka, SAN, FCIArb and Finance Partner, Chike Obianwu. Other team members included Olufemi Oyewole, Stanley U. Nweke-Eze, Collins Ogbu, Olusola Odunsi, Lawal Kazeem, ACIArb and Francis Jarigo.