Nigeria National Petroleum Corporation V. Famfa Oil Ltd & Anor (2009)

LAWGLOBAL HUB Lead Judgment Report

A. FABIYI, J.S.C.

C.: (Delivering the Leading Judgment): The 1st respondent felt unhappy with the manner in which the 2nd respondent acquired 50% of its interest in Oil Mining lease (OML) 127. After serving the appropriate notice of intention to commence legal proceedings on the 2nd respondent, the 1st respondent filed an Originating Summon at the Federal High Court in which it sought for the determination of the following questions:-

“1. A declaration that the President, Vice-President or Officers in the Public Service of the Federation CANNOT grant any Oil Prospecting Licence (OPL) or any interest whatsoever in respect of any ‘mineral oils and natural gas in, under or upon the territorial waters and Executive Economic Zone of Nigeria’ to any person or persons except under and in accordance with the provisions of the Petroleum Act CAP P. 10 of the laws of the Federal Republic of Nigeria, more especially 2 section 2 (1) (a) (b) and (c ) as well as section 2 (3).

2. A declaration that by virtue of paragraph 8 of the First Schedule to the Petroleum Act, the first respondent cannot grant an Oil Mining Lease to any other person or persons. EXCEPT THE HOLDER OF AN OIL PROSPECTING LICENSE.
3. A declaration that the President, Vice President or Officers in the Public Service of the Federation CANNOT acquire any interest in an Oil Prospecting Licence (OPL) or Oil Mining Lease (OML) except under and in accordance with the provisions of:-

(a) Paragraph 35 of the first schedule to the Petroleum Act;

(b) Section 44 (1) of the Constitution of the Federal Republic of Nigeria.

4. A declaration that the purported acquisition of 50% of the applicant’s interest or any interest whatsoever in OML 127 in as much as it was not done in compliance with the provisions of the law and the constitution as stated above is illegal, unconstitutional, null and void and cannot confer any interest whatsoever in OML 127 in the second respondent (that is due process of the law must be followed).
5. A perpetual injunction restraining the second respondent, its assigns, servants privies, subsidiaries, whomsoever, howsoever, whensoever, from exercising any right in the said OML 127 or any part or portion thereof.”

The learned trial judge heard the matter and in his reserved judgment handed out on 31st May, 2006, the suit was dismissed. The 1st respondent herein felt irked with the poise of the learned trial judge. It appealed to the Court of Appeal, herein referred to as the Court below.

The Court below heard the appeal and in its own reserved judgment, handed out on 10th December, 2007 the trial court’s decision was set aside. Consequently, the following orders were made:-

“1. The compulsory and arbitrary acquisition of the interest of the appellant by the 2nd respondent as outlined in letters or acquisition dated 27th January, 2005 and 19th April, 2005 is hereby declared illegal, unlawful, wrongful, unconstitutional and thus null and void.

2. It is hereby declared that the purported acquisition of 50% of the appellant’s interest in OML 127 in as much as it was not done in compliance with the provisions of the law, paragraph 35 of Cap 10 of the LFN 2004 and the Constitution is illegal, unconstitutional, null and void and cannot confer any interest whatsoever in OML 127 in the 2nd respondent, without due process of the law.
3. An order is hereby made directing the 2nd respondent to return to the appellant all his interest in OML illegally acquired.
4. An injunction is hereby granted restraining the 2nd respondent, its assigns, servants, privies, subsidiaries, whomsoever from interfering with the rights of the appellant in the said OML 127.

The appellant is awarded costs in the sum of =N=50,000.00 against the two respondents.”

In a ding-dong fashion, the 2nd defendant at the trial court-Nigeria National Petroleum Corporation, appealed against the decision of the court below. Since the appeal has been entered in this court and no further proceedings could be entertained by the court below, the appellant filed a motion on notice dated 10th September, 2008 on 17th September, 2008 praying for the following:-

“1. An order granting stay of execution of judgment of the Court of Appeal delivered on 10th December, 2007 in appeal No. CA/A/173/2006 pending the determination of the appeal filed by the appellant/applicant before this Honourable Court.

2. And for such further order or other orders as this Honourable Court may deem fit to make in the circumstances of this case.”

Let me stress the point here, for avoidance of doubt, that this ruling is only sequel to arguments canvassed in respect of this application for stay of execution and not more than that. The issues to be determined in the main appeal should not be considered, even remotely. For if same is done, nothing will be left for consideration at the end of the day.

The application for stay of execution was supported by an affidavit of 37 paragraphs. A host of exhibits were attached. As well, a further affidavit of 44 paragraphs was filed. On behalf of the 1st respondent, a counter affidavit which contains 15 paragraphs was filed in opposing the application.

On 23rd of March, 2009 when the application for stay of execution was taken, O. Soyebo, SAN on behalf of the applicant relied on facts deposed in the main affidavit as well as the further affidavit to fortify the application.