Court Unfreezes Petralon’s Accounts Over Material Facts Suppression By Eurafic Energy

Court Unfreezes Petralon’s Accounts Over Material Facts Suppression By Eurafic Energy

Following the discovery of material facts suppression and deliberate falsehood by Eurafric Energy, a Lagos Federal High Court, on Friday, vacated and discharged an order it granted freezing the bank accounts belonging to an oil company and its Parent; Petralon 54 Limited and its parent company, Petralon Energy Limited, the freeze encompassed their accounts wherever domiciled in 18 banks across the country. 

Delivering a ruling in a motion filed by the company, praying the Court to unfreeze the unjustly frozen accounts, the presiding judge, Justice Daniel Osiagor held that the court was misled to grant an order freezing the company’s accounts, which it subsequently reversed to lift the order thereby unfreezing the bank accounts and cancelling the Post No Debit order already in effect across all the restrained banks.  Specifically, consideration of Petralon 54’s Affidavit in response to Eurafric’s Counter Affidavit deposed to on October 12, 2022 and the Reply Address in support of the Motion to Set Aside the Exparte Orders, revealed to the court that Eurafric had grossly misinformed it and caused the institution of justice to act in error.  
Eurafric Energy had approached the court, praying it to bar operations and transactions on the bank accounts belonging to Petralon 54 its parent company, Petralon Energy, and an unrelated company Tako E&P Solution, on the ground that the three oil companies did not declare the total quantity of crude sold, the amount it was sold and the royalty paid to the government in a Federal Government Agency transaction.

 However, in a Motion filed by Petralon 54, it prayed the court to lift the order banning operation of its account, arguing that the defendants, particularly Eurafric Energy ‘suppressed and deliberately’ hid material facts concerning the case from the court. 
 Justice Osiagor in his consolidated judgment ruled that Exhibit Volte Face F exhibited in the Plaintiff’s Counter Affidavit and Exhibit G exhibited in the Defendant’s Counter clearly indicated that the Plaintiff (Eurafric Energy) gave consent for a loan of $2. 2 million USD, to be obtained thereby making it a party to the debt repayment efforts to the holding bank which the funds it sought to freeze pertained to, but this fact was not disclosed to the Court before the restraining Order on the Defendant’s accounts.  
Accordingly, the Court held that upon consideration of Petralon 54’s Affidavit in response to Eurafric’s Counter Affidavit deposed to on October12, 2022 and the Reply Address in support of the Motion to Set Aside the Ex parte Orders, Eurafric had grossly misinformed the court and caused the institution of justice to act in error. 
 The banks affected by the order of court are Access Bank Plc, Ecobank Bank Plc, First Bank of Nigeria Plc; First City Monument Bank Plc; Guaranty Trust Bank Plc; Jaiz Bank Plc; Keystone Bank Plc; Polaris Bank Plc, Stanbic Ibtc Bank Plc, Zenith Bank Plc; Globus Bank Plc; Titan Bank Plc; Providus Bank Plc, Fidelity Bank Plc, Standard Chartered Bank Plc; Sterling Bank Plc; Union Bank of Nigeria Plc and United Bank for Africa Plc. 

 Findings revealed that until June 28, 2022 when Petralon 54 became the sole operator of the Dawes Island Field having being granted Petroleum Prospecting License No. 259 (PPL 259) by the Federal Government of Nigeria in accordance with the Petroleum Industry Act, 2021, the plaintiff (Eurafric Energy), Petralon 54, and Tako E&P Solutions were joint venture (JV) partners.   

The JV arrangement covered operation at the Dawes Island Marginal Field initially awarded to the Plaintiff (Eurafric Energy), which was revoked on the grounds of operational ineptitude, poor management and asset abandonment for more than fourteen years, resulting in loss of revenue to the Federal Government of Nigeria and being inimical / adversely impacting the development of Okrika communities, River State, where the asset is situated.   
Earlier in the transaction, the JV had secured a loan of $2.2 million from Access Bank for operational activities, with crude sale proceeds domiciliation agreement with the Bank to offset the JV indebtedness. In its alleged misleading presentations to the Court, Eurafric Energy was accused of concealing the knowledge of the loan, which exhibit Volte Face F in its own Counter Affidavit and Defendant’s exhibit ‘G’ in its Counter process, proved beyond reasonable doubt.      

Reviewing the process, an industry and legal analyst, Ibrahim Ajila asserted that “Eurafric Energy hoodwinked the Court into granting an ex-parte mareva, this is indeed a highly reprehensible conduct that could bring the judiciary into disrepute, cause significant economic losses and reputational damage, not only to the defendant, but to the financial institutions involved in the transaction, because conscious denial of continuing indebtedness to a  bank, just to procure a restraining Order, could injure our financial system and put depositors funds in jeopardy as a result of none repayment, or servicing of the loan.”    

“This is an abuse of our judicial process, a premeditated malicious and gross intent to destroy the operations and reputation of another corporate entity through propagation of falsehood, which obviously is designed to pitch the entity against investors, and impair its capacity to continue receive funding from international capital sources”, added Ajila. 

“With our prevailing economic situation, any action – either by an individual or corporate entity, that will impact FDI inflows to Nigeria or cast Nigeria in a bad light is beyond economic sabotage. Such actually qualifies as economic terrorism, and using the instrument of the state – the country’s judicial system to execute this type of scandalous and atrocious deed, should not go unpunished”, he concluded.