jp morgan chase

Nigeria loses $1.7b suits against JP Morgan

The Nigerian government’s $1.7b claims against JP Morgan Chase Bank for the transfer of proceeds from Malabu Oil and Gas Limited’s sale of OPL 245 in 2011 have been dismissed.

What was the ruling?
The Business and Property Courts of England and Wales Commercial Court ruled yesterday that there was no evidence that Nigeria was defrauded in the transaction. The bank had argued against Nigeria’s claims, insisting that all proper procedures were followed and money laundering checks were completed and that the allegations of fraud surfaced only after a new administration assumed power in Nigeria.

What was Nigeria’s claim in the suit?
Shell and ENI paid $1.3b to Nigeria’s JP Morgan account, with $801m going to Malabu, the original OPL 245 allottees, and $210m to the FG as a signature bonus. The FG’s suit against JP Morgan was on the basis of “Quincecare duty,” arguing that the bank “ought to have known” that the transaction, in which Malabu sold its whole ownership in OPL 245 to Shell and ENI for $1.1b, was corrupt and fraudulent.

What evidence did the government present?
Nigeria argued that JP Morgan shouldn’t have proceeded with the transaction since there were many “red flags.” But while noting that the bank was “on notice of a risk” of fraud, Sara Cockerill, in the ruling, said; “There was a risk – but it was, on the evidence, no more than a possibility based on a slim foundation”.

Nigeria’s previous attempts to prove that the OPL 245 contract was tainted with corruption all failed. In March 2021, an Italian court dropped all claims of corruption in the transaction, acquitting and discharging all defendants, including Shell, ENI, Malabu, and Dan Etete.

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