Nospetco Oil & Gas Ltd V. Olorunnimbe & Ors (2021)

LAWGLOBAL HUB Lead Judgment Report

AMINA ADAMU AUGIE, J.S.C. 

The Appellant is in the business of oil and gas, as its object clause. The first to fourteenth Respondents, and many others, entered into an agreement with it by way of “Memorandum of Understanding for Joint Venture (J.V.) Supplies of Industrial Fuels”, wherein they were referred to as Joint Venture Partners [JV Partners]. Each JV Partner paid N450, 000 for a slot with a monthly profit of N40, 000 per slot.

In May 2007, the Securities and Exchange Commission [SEC], published a Public Notice titled “Illegal Investment Scheme operated by Nospecto Oil and Gas Ltd”, and being the apex regulatory body in the Capital Market, it put a stop to the Company’s business activities and got the Company’s accounts in all the Commercial Banks frozen. Since 2007, the money invested by the JV Partners, which runs into Billions of Naira, has remained in the custody of Central Bank [CBN].

​The said Respondents made strenuous efforts to recover their money from the fifteenth [SEC] and sixteenth [CBN] Respondents, to no avail. Whereupon, they filed an Application at the Investment and Securities Tribunal [Tribunal], wherein they claimed as follows:

a. A Declaration that the Applicants are entitled to know the total amount frozen from the 3rd Respondent’s accounts in various Commercial Banks in Nigeria including but not limited to Zenith Bank, First Bank, Union Bank, UBA, Skye Bank, Intercontinental Bank and Oceanic Bank by the 1st Respondent, since May 2007.

b. A Declaration that the Applicants are entitled to know the total amount frozen from the 3rd Respondent’s accounts in various Commercial Banks in Nigeria by the 1st Respondent and kept with the 2nd Respondent.

c. A Declaration that the continued withholding of the amount so frozen from the accounts of the 3rd Respondent by the 2nd Respondent without releasing same to the Applicants on demand is unlawful and inimical to the over-riding interest of the Applicants.

d. A Declaration that the refusal, omission and/or failure of 1st Respondent to direct 2nd Respondent to release the salvaged fund to the Applicants on demand is contrary to its statutory duty to protect the interest of the Applicants as spelt out in Section 13(1) & (k) of Investments and Securities Act 2007, ​ and the Judgment of the Investment and Securities Tribunal holden in Abuja in Case No. IST/OA/19/07 between the 3rd Respondent as the Applicant and the 1st Respondent as also a Respondent whereby it is stated inter alia that: “The Respondent has the statutory duty to protect investors including those that invested though the Applicant”.

e. A Declaration that the continued refusal, omission and/or failure of the 2nd Respondent to release the money in its custody to the Applicants despite the repeated demand and numerous representations amounts to insensitivity to the plights of the Applicants, legally indefensible and morally wrong.

f. An Order of this Honourable Tribunal compelling the 1st and 2nd Respondents to release without further delay all the amount so frozen from the 3rd Respondent’s accounts in their custody to the Applicants for immediate disbursement forthwith.

g. An Order mandating the 2nd Respondent to disclose the total amount in its custody based on the directive of the 1st Respondent with accrued interest since 2007 up to date and release same to the Applicants.

h. An Order compelling both the 1st and 2nd Respondents to set up without further delay an ad-hoc committee comprising 1st and 2nd Respondents, the Applicants, the Legal Representative to the Applicants, the Office of the Auditor-General of the Federation and Nigeria Police Force from the Special Fraud Unit, Milverton, Ikoyi, Lagos, to disburse the amount so recovered to the Applicants pro rata.

i. An Order compelling the 3rd Respondents to stop forthwith its illegal, unlawful and fraudulent business and banking activities, which it has been relentlessly carrying on under cover and clandestinely since May 2007, after its operations were halted by the 1st Respondent, and refund the money invested by the Applicants accordingly.

j. An Order of this Honourable Tribunal awarding the sum of N2 Million as cost of instituting and prosecuting the Application, traveling expenses to Abuja by the Applicants and their Legal Representatives to plead, ask, request and demand for the release of their money in the custody of the 1st and 2nd Respondent. And any other relief(s) as the Tribunal deems fit.