Alleged $3.6m Contract Palaver: Court Strikes Out Spurious Criminal Charge Against Addax, Mayaki & Esan

Addax Petroleum Exploration Nigeria Limited (Addax), Mr. Tunji Mayaki, Addax’s Deputy Managing Director and Dr. Nike Esan, Addax’s Head, Dispute Resolution & Corporate Governance can now heave a sigh of relief as a spurious $3.6m criminal charge brought against them has been struck out by Hon. Justice A. Fadipe of the High Court of Lagos State, Ikeja Judicial Division.

The suit No. ID/16806C/202  filed by the Special Frauds Unit (SFU) of the Nigeria Police Force (NPF) was struck out by tthe court on Friday, March 11, 2023.

The SFU had on 28^th October 2021 charged Addax and its officials for the alleged offences of conspiracy to steal and stealing the sum of 3.6 million United State Dollars purportedly belonging to Peacegate Oil and Gas Limited (“Peacegate”) in 2010.

The charge was predicated on a petition submitted to the law enforcement agency on 6^th July 2021, by one Mr. Adedoyin Ayorinde, the Managing Director of Peacegate.

In response to the above charge, Addax and its officials, represented by the law firm of Babalakin & Co. led by Mr. Olawale Akoni SAN, filed a notice of preliminary objection, contending that the High Court of Lagos State lacked jurisdiction to hear the charge on the grounds that the charge was premised on a law unknown to Lagos State and significantly too that the proof of evidence did not disclose the commission of any crime as the issues between Peacegate and Addax was basically a civil  and contractual dispute, matters regarding which the Civil courts had already determined..

Addax’s legal representatives further pointed out to the court that Mr. Mayaki and Dr. Esan could not by any stretch of imagination, have conspired to steal or conspire to have stolen any money whatsoever belonging to Peacegate as Mr. Mayaki joined Addax in 2012, two years after the period of the alleged offence and Dr. Esan who was a legal officer without any approving or managerial authority at the relevant period, was never involved in the execution of the contract that led to the dispute.

Dr. Esan only worked on the court and arbitration cases alongside the external lawyers engaged by Addax to defend itself.

Our investigation in the above matter showed the following:

1. Addax had entered into a contract with Peacegate in October 2008 for the provision of three security vessels to carry out security patrol services for some of Addax’s operation for a duration of 9 months. Peacegate only delivered one of the vessels, MV Rescuer and put same to Addax’s use between 22^nd January 2009 and 5^th February 2009. However, on 5^th February 2009, militants attacked the MV Rescuer resulting in damage to the vessel which consequently became unavailable for Addax’s use.
2. Addax thus terminated the Contract and a dispute arose between the parties in this regard.   In consonance with the Parties’ contractual dispute resolution provision, Peacegate commenced arbitration proceedings against Addax claiming over $10 million for the damaged vessel and full day rate payment for the three vessels. Addax denied liability.
3. Upon Peacegate’s request, arbitration was suspended and National Petroleum Investment Management Services (NAPIMS), a division of The Nigerian National Petroleum Corporation (NNPC) waded into the mattee.  After series of meetings,  a settlement was eventually recommended by NAPIMS that apart from the sums already paid to Peacegate by Addax, the sum of $3.6million be paid to Peacegate by Addax. As is the practice in Production Sharing Contract arrangements, Addax sought and obtained NNPC Board’s approval in 2010 to pay the sum of $3.6 Million and N44 Million as full and final settlement of all Peacegate’s claims.
4. However, at a meeting convened to finalise the settlement,  Peacegate flatly rejected the settlement sum, and opted to continue with the ongoing arbitration proceedings, hoping to recover much more than the settlement sum. Mr. Ayorinde Adedoyin, the CEO of Peacegate and other parties who attended the settlement meeting signed the minutes of the meeting containing this position.
5. At the end of the arbitration proceedings, the arbitral panel issued its arbitral award on 8th July 2011, wherein it only awarded to Peacegate, the total sum of $420,250 and N162,500 as opposed to its over $10 Million arbitration claim.
6. Peacegate was dissatisfied with this award but rather than challenge the whole award, decided to pick and choose. It adopted an unlawful and inappropriate approach of seeking to enforce in suit No. (FHC/L/CS/401/2012), the favourable part of the award and at the same time seeking to set aside the unfavourable part. Peacegate sought to enforce the part of award granting it $420,250 and N162,500 and commenced enforcement proceedings against Addax. Addax eventually paid the arbitral award sums.
7. Peacegate also sought to set aside the part of the award not favourable to it in court by filing Suit No. FHC/L/Cs/981/2011 against Addax.  On 24^thApril 2014, the Federal High in its judgment in Suit No FHC/L/CS/981/2011 agreed with Peacegate and set aside the arbitral award without taking cognisance of the fact that the award had been enforced or making any order for a refund of arbitral award sums received by Peacegate. Addax appealed this judgment and the Court of Appeal in its judgment of 10th March 2017, reversed the Federal High Court’s decision and reinstated the Arbitral Award of 8^th July 2011. Peacegate has a pending appeal against this decision at the Supreme Court.
8. Despite the pendency of this appeal, Peacegate continued to go about town complaining to all who cared to listen that Addax and its officials conspired to steal and allegedly stole the sum of $3.6 Million and N44 Million which Peacegate rejected at the settlement meeting convened by NAPIMS.

Our findings at the Nigeria Police Force, confirm that, the authorities of the Nigeria Police Force authorized the SFU to withdraw the criminal charge; particularly as it sought and acted on the legal advice of Directorate of Public Prosecution (DPP) Federal Ministry of Justice with a view to prevent a pervasion and miscarriage of justice through malicious prosecution. It is instructive to note that the DPP advised that after thorough review of the issues, Addax and its Officers have not committed any crime and that parties should settle their differences by way of a civil action. It is on the strength of this instruction that Mr. Henry Obiazi, the police prosecutor applied to withdraw the charge and the court consequently struck it out and discharged Addax, Mr. Tunji Mayaki and Dr. Nike Esan.

Reacting to the news that the criminal charge has been struck out, Mr. Mayaki said “This is a welcome development for all of us at Addax, we are glad to put this needless distraction behind us. It is inconceivable that a charge could be brought against persons who were not in employment of the company at the time the alleged offence was committed and against persons who had no actual or ostensible authority regarding the relevant contracts at the material time. Peacegate, following failure to establish their case in the civil courts as they ought to, has dragged us to different law enforcement and regulatory agencies such as the Economic and Financial Crimes Commission (EFCC), the Inspector General of Police Monitoring Team, the and National Petroleum Investment Management Services (NAPIMS).

After investigation by these agencies, Addax and its officials were always cleared of any wrongdoing as it is obvious that the issue between the Peacegate and Addax is a civil and contractual matter with no criminal underpinnings. Once again, we have been exonerated from the spurious charges brought against us and parties can now focus attention on other matters .”