Court Orders Seplat To Pay $2,112,500m Debt To Service Providing Firm
An Ikeja High Court of Lagos State, has ordered one of the foremost oil and gas exploration company in Nigeria, Seplat Petroleum Development Company Plc, to pay an outstanding indebtedness of $2,112,500 million USD, an equivalent of N1,499,875,000 billion, to an oil servicing company, ABM Global Resources Limited.
Justice Owolabi Alls Dabiri who presided over the court, made the order, while delivering judgement in a debt recovery suit instituted by ABM Resources Limited against Seplat Petroleum Development Company Plc in a suit numbered LD/2457GCMW/2016
ABM Resources Limited in a bid to recover the money owed her by the judgment debtor, SEPLAT Petroleum Development Company Plc for materials supplied to the oil prospecting company, had in 2016 through her lawyer, Mr Ade Oyebanji (SAN), instituted a debt recovery suit at the Lagos State High Court Ikeja.
The claimant, ABM Resources Limited in its an amended statement of claim dated November 23, 2020 and filed by its lawyer, Mr. Oyebanji (SAN), stated that sometimes between 2012 and 2014, Seplat Petroleum Development Company Plc secured it’s service to supply 9-5/8 N80 VAM Top Casing Pipes and 2-7/8 N80 HCS Tubing, within the space of three years. Adding that it supplied the defendant (Seplat) with all the numbers of 2-7/8 N80 HCS Tubing Pipes which were received by the defendant.
The claimant further averred that in fulfilment of the terms of contract for the supply of them materials and in adherence to the purchase order of the defendant, it made several supplies. And in fulfilling part of it’s obligations in accordance with the contract term, SEPLAT made an upfront payment of $3,640 million USD, being 80 percent of the total cost of the 50,000 feet of 9-5/8 N80 VAM Top Casing Pipes supplied leaving a balance sum of $910,000.00 and $227,500.00 as Value Added Tax totaling $1,137,500 million USD.
The oil servicing firm said it supplied the products requested by the defendant satisfactorily through it PO number 013537 and the defendant issued Work Completion Certificate for the job. It adds that it issued invoice number ABM /MD/SEPLAT/14/Vol. 4/892 dated November 17, 2014 to the defendant in respect of the balance sum of $1,137,500 million USD, due on the supply, but the defendant has refused and failed to settle the outstanding invoice.
The claimant further contended that the defendant also requested for the supply of 120,000 feet of 2-7/8 N80 HCS pipes and made an upfront payment of $3,120,000.00 being 80% of the total cost of the 120,000 feet of 2-7/8 N80 HCS Pipe in accordance with the terms of contract, leaving a balance sum of $780, 000.00 and $195,000.00, (Value Added Tax), totaling $975,000 USD. And that all the goods were supplied, with Seplat issuing a Work Completion Certificate, but that the defendant has refused to settle the outstanding debt despite repeated demands, hence the resort to litigation.
Consequently, the plaintiff is claiming from the defendant the sum of $1, 137, 500 million USD and another $ 975, 000. USD, being cost of the unpaid materials supplied to the defendant.
However, during trial both parties call one witness each and tendered documentary evidence in support of their case.
While the claimant call it’s only witness, Chioma Kelechukwu, a Business Development Officer, in its firm, who identified her statement on Oath and was later cross-examined by the defence counsel.
The defendant, also called it’s lone witness, Igbi Oghenerume, the Lead Inventory Manager in it’s firm, who also identify his statement on Oath and was cross-examined by the claimant’s counsel, Mr. Oyebanji (SAN).
During cross examination, the claimant’s witness told the court that she was aware of the defendants’ indebtedness to employer and that she was part of the meeting of September 16, 2016, where the issue tabled and discussed by the parties, adding that she did not accept the claim of a shortfall of 17,842.02 feet of pipes as alleged by the defendant.
Chioma, in her testimony admitted that she was aware of a shortfall of 10, 000 feet pipes in 2012, but added that the shortfall was a different transaction from the current claim of the claimant, adding that the current claim was in respect of good supplied in 2014.
On the part of the defence witness, who identified several purchase orders and emails of his company, he admitted that the defendant was not denying owing the claimant, but denied knowing to what extent.
Oghenerume also told the court that the former COO of Seplat, one Mr Stuart Connal, sometimes in 2014 proposed a 50/50 payment proposal to the claimant in an email, but added that the 50 percent proposal was not paid to the claimant.
Justice Dabiri while legally evaluating the documentary evidence placed before the court and counsel submissions, said that by the defence own documents and oral testimony there was no disputes that the defendant issued Work Completion Certificate to the claimant after delivery of materials which pre- supposes the satisfactory completion of certain job or activities.
The trial judge added that the sanctity of contract or agreement is to ensure that a party who voluntarily entered into a contract is bound by it, no matter how unfavourable it may turn out to be as long as he entered into the contract fully conscious of what he was doing and had willingly signed same and the subject matter of the contract is lawful.
On the issue of shortfall of 17,842.02 feet of pipes as alleged by the defendant, Justice Dabiri said the defendant conducted an in-house reconciliation exercise and came up with a shortfall in the specifications of the items supplied to it by the claimant in 2012. The claimant rejected the reconciliation exercise, and rightly so, a reconciliation exercise conducted without the active participation of the other party in dispute is one sided.
The judge added that to say the least, there was no sufficient materials placed before the court to prove that there was any shortfall in the supply. “The court was not furnished with any official report detailing the shortage, rather an internal memo was tendered before the court, a communication between departments within the same organisation.
“The defendant could have been more circumspect and more discerning to invite the claimant for the verification and both parties to acknowledge, consent or reject, but this is a one man show considering the colossal amount involved.”
Justice Dabiri in the judgment held that; “I have listened to the submissions of counsel on both sides, and having perused the array of processes and documents before me, the court hereby make the following orders and this is the judgement of the court.
“That the claimant is entitled to the unpaid and outstanding balance sum of $1, 137,500 million USD, for the supply of 9-5/8 N80 VAM Top Casing Pipes and 9-5/8 HCS Tubing Pipes
“That the sum of $1,137,500 million USD is the sum due to the claimant from the outstanding balance of the defendant for the supply of 9-5 N80 VAM Top Casing Pipe and 9-5N80 HCS Tubing Pipe.
“The payment of interest on the said sum of $1,137,500 million USD from of February 18, 2014 at the rate of 6 percent per annum until judgement is delivered and thereafter at the rate of 6 percent per annum until full liquidation.
“That the claimant is entitled to to the the unpaid outstanding balance of $975, 000 USD, due for the supply of 2-7/8 N80 HCS Pipe.
“The the sum of $975,000 USD, only is the sum due to the claimant for the supply of 2-7/8 N80 HCS Pipe and payment of interest on the said sum of $975, 000 USD, from February 18, 2014 at the rate of 10 percent par annum until judgment is delivered and thereafter at the rate of 6 percent per annum until full liquidation.”
Justice Dabiri also awarded N500,000 in favour of the claimant.
Concluding, Justice Dabiri said: “It is unfortunate that in a country where the business environment is already harsh, unfriendly and riddles with stings of bottlenecks primed to make business owners fail, companies and individuals also constitute hindrances to the smooth running of business by refusing and neglecting to make remittance for services rendered. Such attitude should be condemned in it’s entirety. Truly this is a simple case of contract, a business gone awry,” he said.
Meanwhile, the defendant has appealed the judgement of the Ikaja High Court.
According to the Notice of Appeal dated December 13, 2021 and filed by the legal firm of Olaniwun Ajayi LP, the appellant in the notice of appeal raised ten grounds for adjudication.
However, no date has been fixed for hearing of the appeal.
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