An oil exploration and production company in Nigeria, Oriental Energy Resources Limited, and 13 banks has been restrained from withdrawing, transferring, removing any funds, properties, or assets, outside the jurisdiction of Nigeria or encumbering any funds in the account of the Company with the banks except for payments of normal salaries.
The restraining order was granted by Justice Chukwujekwu Aneke of a Federal High Court sitting in Ikoyi, Lagos State, Nigeria, who further directed that such payment must also be duly granted by the court upon request, pending the hearing and determination of the Motion on Notice.
The judge further issued an order restraining Oriental Energy Resource Limited, either acting alone or in concert with the Central Bank of Nigeria (CBN) and Nigeria Petroleum Development Company (NNPD) from exporting, transferring, or removing from the jurisdiction of the court any asset, Crude Oil or Gas due to the company from Ebok Marginal field or any other Oil block and/or transferring or diverting the proceeds therefrom to any bank account outside the jurisdiction of the court, pending the hearing and determination of the motion on notice.
Justice Aneke also granted an interim order, attaching and taking legal possession of all funds, deposits, credit, and receivables belonging to or due to the company with or in the custody of the 13 banks listed before the court, and directing each aforesaid bank listed, as affected parties, to within 7 days from the day of service of these orders, file an affidavit disclosing the respective balances, funds, deposits, credit, and receivables, held in or the account of the company at the date of the order supported by a certified print out of the statements of accounts covering three months, pending the hearing and determination of the motion on notice.
The judge arrived at the decision sequel to an application filed and argued before the court by a Lagos-based lawyer, and Senior Advocate of Nigeria, Uchechukwu Obi, on behalf of Uniterm Nigeria Limited who alleged that Oriental Energy Resources Nigeria Limited is owning it the sum of $1,453,356, 76 (One million four hundred and fifty-three Thousand, Three Hundred and Fifty-six Dollars Seventy-six Cent.
In a 63-paragraph affidavit in support of the application sworn to by the General Manager, Finance of Uniterm Nigeria Limited Company, Adekunle Okunnowo, and argued before the court by Mr. Obi, it was alleged that Oriental Energy Resources Limited, was desirous of engaging a consortium comprising a local and foreign contractor, to provide it with a Rig, specialized Drilling Unit, local and foreign personnel and catering services required in the well drilling project for Ebok Field located within OML 67.
In the light of the above, Oriental Energy Resources Limited contacted Borr International Operations Incorporated, a company engaged in the business of providing drilling services and one existing under the laws of Marshall Island and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, and the Petitioner Uniterm Nigeria Limited as a consortium of foreign and local contractors for the project.
The petitioner was to provide local personnel and catering and incidental services on the rig location; while Borr was to provide the Rig, Drilling unit, and expatriate personnel for the project included in the contract.
The petitioner, Borr, and the Respondent as separate juristic entities fully aware of their roles, rights, and obligations, entered into a business relationship in May 2021.
The petitioner in association with Borr (simply described as the “Contractor”) and same was for the provision of Jack up Drilling unit “NATT” Drilling Rig, local and foreign personnel supply and Catering Services for Drilling Program Offshore Nigeria in the Respondent’s Ebok Field in OML 67 aforesaid.
Although the said contract referred to the petitioner and Borr as “the contractor”; it was understood by the parties that the contract was to be executed by them in such a way that each of Borr and the petitioner named as a contractor in the contract, was to provide its individual and distinct services to Oriental Energy Resources Company and to invoice and get paid separately for the services rendered by each of them.
The drilling operations and other contractual services commenced in May 2021 and ended in October 2021. The Petitioner had submitted a total number of 61 invoices totaling US $2,232,638.67 and N104,120,896.20. All of these duly issued invoices were sent directly by the petitioner to the respondent in accordance with the ordering and invoicing process and most of them were received and honoured by the respondent.
The respondent, however, failed to pay 6 outstanding invoices all of which amount to US $1, 453, 356.76 VAT inclusive.
Sometime in October 2021, the respondent had alleged that Borr supplied Borr Natt Rig’ had malfunctioned thereby leading to a temporary stoppage of work within the period resulting in non-productive time (NPT) and consequential spread cost losses.
In light of this, the respondent sent a letter to Borr on October 14, 2021, informing Borr that they were disputing the service rates on Borr’s specific invoices, given the non-productive time (NPT) and spread cost losses. The letter was addressed to Borr which was simply copied to the petitioner.
However, the respondent did not dispute the invoices submitted by the petitioner for the local personnel supply and catering services rendered by it or queried any aspect of the services rendered by the petitioner in accordance with the ordering and invoicing process.
The respondent had struggled throughout the contract tenure to comply with the contractual payment terms of 30 days from final invoices submission dates as agreed, instead payments were mostly delayed and irregular and some remained outstanding to date. In each case, the respondent complained of its liquidity problems urging the petitioner to exercise more patience.
Due to the alleged persistent refusal of the respondent to make payments to the petitioner, on the six (6) outstanding invoices, the petitioner wrote a letter to the respondent dated March 14, 2022, and April 5, 2022, demanding payment of the outstanding debt of US $1, 453, 356.76 (One Million Four Hundred and Fifty-Three Thousand, Three Hundred and Fifty – Six Dollars, Seventy-Six Cents) Vat Inclusive.
By the terms of the contract, the petitioner is also entitled to interests on the invoices as provided for in the contract. This is because the 30-day period stipulated in the contract has elapsed since the invoices were raised and submitted.
The respondent’s claims and contentions against Borr which it now uses as an alleged ploy to refuse to liquidate the petitioner’s invoices are wrongful, baseless, and insupportable under the existing contract executed by the parties.
All the services provided by the petitioner were specifically requested by the respondent. Also, the petitioner had as far back as October 14, 2021, been sending emails and letters to the respondent, notifying it of the outstanding invoices. It is therefore described as unfair, that the respondent is trying to assert its purported claim against Borr International Operations Incorporated as a ground to withhold the petitioner’s funds under the invoices.
The petitioner is said to be entitled to the sum of US $1, 453, 356.76 (One Million Four Hundred and Fifty-Three Thousand, Three Hundred and Fifty – Six Dollars, Seventy-Six Cents) VAT Inclusive, interest at the current rate.
The petitioner, according to the documents before the court has performed all of its obligations under the agreement, but the respondent has allegedly woefully failed to discharge its obligation under the contract by its refusal to honour invoices forwarded to it by the petitioner.
Owing to the alleged repeated failure of the respondent to honour its commitments, as a result of which the business of the petitioner was put in jeopardy and near total collapse, the petitioner, in compliance with the provisions of Sections 571 (d) and 572 (a) of the Companies and Allied Matters Act, 2020 issued a statutory demand notice on the respondent on April 13, 2022, requesting the respondent to pay the debt within three weeks from the date of receipt or face the consequence of winding up.
Although it received the letter on April 14, 2022, the respondent has failed to make the payments for the outstanding invoices to date thereby daring the machinery of the law.
The petitioner is a struggling Nigerian service company grappling with high operational costs and overdue commitments with its lenders, employees, and other stakeholders and this delay in settlement of the invoices has occasioned undue hardship on its operations requesting the court’s intervention to protect its rights as an unpaid creditor under the law.
According to the processes before the court, it was argued that the respondent has become insolvent and unable to pay its debts to the petitioner and there is a need to protect the petitioner and other body of creditors of the respondent from the wrongful and predatory action of the respondent.
By its alleged shifty and evasive conduct, the respondent who has funds in Nigerian Banks including those listed before the court as affected parties would most likely transfer its funds and excess stocks of crude oil and gas out of those accounts or otherwise encumber them outside Nigeria and divert their proceeds to offshore bank accounts outside the jurisdiction of the court, with a view to frustrating the instant winding up petition and render its outcome nugatory.
The respondent is said to have assets within the jurisdiction of the Court, but might deal with them so that they will not be available or traceable when judgment is given against it or otherwise frustrate the petitioner from reaping the reward of the judgment.
Given the obvious funding challenges purportedly facing the respondent who may be owing other creditors, the available funds and receivables in its bank accounts due to it, receivables, and stocks of crude oil and gas should be preserved towards the satisfaction of its indebtedness to the petitioner.
The banks listed hold cash deposits of the respondent and the respondent had received transferred funds in settlement of its past invoices from those banks at the instruction of the respondent.
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