RE: REQUEST FOR INTERVENTION FOR NEGOTIATED SETTLEMENT FOR THE TOTAL CLAIMS FOR DAMAGES/WASTED EXPENSES ON FAILED GLOBAL GAS/SPDC GAS PROCESSING PROJECT – REQUEST FOR THE URGENT NEED TO ADDRESS THIS INJUSTICE AND UNFAIR TREATMENT OF A REPUTABLE NIGERIAN GAS PROCESSING COMPANY BY SHELL (SPDC) IN REGARD TO A GAS FAILED PROJECT IN NIGERIA
April 30, 2021 | News
As advocates of social justice and equity, especially as pertaining to issues concerning the oil and gas exploration and production activities in the Niger Delta region of Nigeria, we strongly believe that Contracts, particularly ‘Contractual Agreements’ at any level and zone of the Royal Dutch Shell global operations (in this case - Shell Petroleum Development Company of Nigeria Ltd -SPDC) ,
RE: ICC ARBITRATION CASE 20331/TO AND NO:10/1910CGM/2017 GLOBAL GAS & REFINING LTD (GGRL) Vs. SHELL PETROLEUM DEVELOPMENT COMPANY NIGERIA LTD (SPDC)
RE: REQUEST FOR INTERVENTION FOR NEGOTIATED SETTLEMENT FOR THE TOTAL CLAIMS FOR DAMAGES/WASTED EXPENSES ON FAILED GLOBAL GAS/SPDC GAS PROCESSING PROJECT – REQUEST FOR THE URGENT NEED TO ADDRESS THIS INJUSTICE AND UNFAIR TREATMENT OF A REPUTABLE NIGERIAN GAS PROCESSING COMPANY BY SHELL (SPDC) IN REGARD TO A GAS FAILED PROJECT IN NIGERIA
As advocates of social justice and equity, especially as pertaining to issues concerning the oil and gas exploration and production activities in the Niger Delta region of Nigeria, we strongly believe that Contracts, particularly ‘Contractual Agreements’ at any level and zone of the Royal Dutch Shell global operations (in this case - Shell Petroleum Development Company of Nigeria Ltd -SPDC) , should never be allowed to create problems and undue issues between the Global Oil and Gas Giant, and its engaged Contractors at any level.
As a well-established global oil and gas multinational, Shell (SPDC) should always be seen to act professionally with consideration, fairness, and justice when in any business dealings with its Contractors/Stakeholders. Aside from the fact that this is aimed at protecting and projecting the ‘public image’ of Shell (SPDC) in a good light in Nigeria, it is also aimed at securing the company’s global image and reputation for posterity. It is in this light, that we consider it necessary to join voices with Global Gas & Refining Ltd (GGRL) to reiterate the longstanding subject petition and complaint, and request that it be urgently addressed promptly in the interest of all parties concerned.
The summary and synopsis of the subject matter as earlier buttressed by Global Gas & Refining Ltd (GGRL) is explained thus:
1. BACKGROUND
1.1 On 20 March 1998, after feasibility studies and Front-End Engineering & Design etc., Global Gas & Refining Ltd put together an international consortium to construct and manage a gas processing plant facility in Cawthorne channel in Rivers State, Nigeria, based on a signed gas sale and purchase agreement with Shell (SPDC) for over 160mmscf of gas per day.
1.2 Prior to the signing of the GSPA, the Federal Government of Nigeria approved and authorized the transaction between the Parties as a strategic Project towards the development/harnessing of the Nation’s wasting gas potentials and natural resources.
1.3 After Global had made SUBSTANTIAL FINANCIAL COMMITMENTS to the project but before the completion of the construction of the gas processing plant, Shell (SPDC) subsequently sought to renege on the gas supply contract it had with Global, leading to arbitration between Global & SPDC in 2000, in which late Chief Gani Fawehinmi was Global’s counsel. (the First arbitration)
2. SETTLEMENT OF FIRST ARBITRATION AND RENEGOTIATED GAS AGREEMENT
2.1 Shell (SPDC) offered Global a substantial settlement to give up its contractual rights under the first gas supply contract, which Global declined and instead, negotiated a reduced quantity of gas of 80mmscf per day, which is the volume stipulated in the present agreement dated March 15th., 2002, that was entered into with Shell (SPDC). This is the agreement in dispute between Global and Shell (SPDC) that was the subject matter of the Second arbitration proceedings that culminated in the Arbitration Award that was set aside on February 25th. 2020, by the High Court of Lagos.
Global thereafter performed all its obligations under the new agreement signed by Global and Shell (SPDC), including completion of the construction of the gas processing plant, procurement, and mooring of an FPSO and the construction of a 24km pipeline at a total receipted cost well in excess of $400m (Four Hundred Million US Dollars).
2.3 THE ISSUE BETWEEN GLOBAL AND SHELL (SPDC) AROSE WHEN SHELL (SPDC) FAILED/NEGLECTED TO MEET ITS OWN CONTRACTUAL GAS SUPPLY OBLIGATIONS TO GLOBAL between 2005.... and..... 2010 during which period the project remained in a “pre-commissioning-testing phase” because Shell (SPDC) failed/neglected to supply the contractual quantum of gas to Global to enable commissioning, as per the new agreement.
3. SECOND ARBITRATION
3.1 On 7 April 2014, Global gave Shell (SPDC) Notice of Arbitration under the auspices of the ICC Court of Arbitration in accordance with the new gas supply and processing agreement it had with Shell (SPDC) WHEN IT BECAME CLEAR THAT SHELL (SPDC) HAD NO INTENTION OF FULFILLING ITS GAS SUPPLY OBLIGATIONS UNDER THE CONTRACT. Shell (SPDC) thereupon, purported to terminate the Gas Supply and processing agreement in respect of which they had never fulfilled their contractual gas supply obligations to enable the commissioning of the project. Global’s claim was for $303m (Three Hundred & Three Million US Dollars), representing only a part of its total expenditure on the project that was supported by receipts of expenditure. No claim whatsoever was made for loss of profit in respect of SPDC’s continuous and deliberate breach that was proved by the evidence.
3.2 Prior to the hearing in the Arbitration, the Parties [Shell (SPDC) and GGRL] made attempts to amicably resolve the dispute. By letters, Shell (SPDC) confirmed that it “is not averse to an amicable settlement of this dispute,” but required its (SPDC) Partners “consent to the settlement discussions and their mandate for any offer to be made.”
3.3 Global, had by a letter dated 7th October 2015 in response to SPDC’s request for a settlement figure, OFFERED TO SETTLE THE ARBITRATION PROCEEDINGS FOR THE SUM OF US$280M (TWO HUNDRED & EIGHTY MILLION US DOLLARS) IN FULL AND FINAL SETTLEMENT OF ALL ITS CLAIMS FOR RECEIPTED WASTED EXPENDITURE AND COSTS INCURRED as a result of the Global’s reliance on SPDC’s contractual commitments under the GPA to supply the agreed quantity and quality of Gas.
3.4 The Arbitration proceedings were heard by a panel of three arbitrators. In the course of the Arbitration proceedings, Global independently learned of and objected to the non-disclosure by two of the three arbitrators, namely the Shell (SPDC) appointed Arbitrator and the Tribunal Chairman, of a professional relationship between them both and SPDC’s lead counsel in the arbitration, who had invited them during the pendency of the proceedings to join a new arbitration body of which he was President! This allegation of non-disclosure was not denied by either of the affected arbitrators or by the Shell (SPDC) lead counsel.
3.5 The ICC Court of Arbitration to whom the objection was made, notwithstanding its very strict rules of disclosure by arbitrators, dismissed Global’s objection and consequent request that the two affected arbitrators be removed, even though the ICC Court also ruled that the acceptance of their appointment by the two arbitrators was inappropriate and ordered them to immediately step down from the appointments during the continuation of the proceedings.
3.6 On May 30th, 2017, after multiple unexplained adjournments, to deliver its Award beyond the stipulated period for an Award to be delivered from the conclusion of the proceedings, the Arbitration tribunal delivered an Award in favor of Shell (SPDC) and dismissed Global’s claim entirely. The Award was signed by the same two Arbitrators whom Global had previously asked to disqualify themselves on account of the likelihood of their bias arising from the deliberate non-disclosure of their relationship with the Shell (SPDC) lead counsel.
3.7 The third Arbitrator however signed a compelling dissenting Award, (the Dissenting Award) based on the evidence and eloquently HIGHLIGHTED THE NUMEROUS BLATANT FACTUAL ERRORS IN THE MAJORITY AWARD SIGNED BY THE SPDC APPOINTED ARBITRATOR AND THE CHAIRMAN OF THE TRIBUNAL. The third Arbitrator awarded Global the sum of $245,433,583.88 (Two Hundred & Forty-Five Million, Four Hundred & Thirty-Three Thousand, Five Hundred & Eighty-Three US Dollars and Eighty-Eight Cent) on the merits of its claim based on verified and documented receipted expenses that were not contested.
3.8 In an unprecedented twist, the Award signed by the Shell (SPDC) appointed Arbitrator and the Chairman was written as a reply or response to the Dissenting Award, seeking to answer each and every point raised by the dissenting Award as if the dissenting Award had preceded the Award and MAKING IT CLEAR THAT THE MAJORITY AWARD HAD BEEN IRREGULARLY REVISED AND REWRITTEN AFTER RECEIPT OF THE DISSENTING AWARD. The norm is for the dissenting Award to highlight its disagreement with the Award and give reasons for its dissent.
4. BIAS OF ARBITRATORS AND SETTING ASIDE THE AWARD
4.1 Thereafter, it also came to Global’s knowledge that the Chairman of the Arbitration Tribunal had also not disclosed his important role as an expert witness in prior Court proceedings in the UK where he was based, between the parent company of Shell (SPDC) and a local community in Rivers State, which he ought to have disclosed as an indirect association with Shell (SPDC) through its parent company.
4.2 Global immediately applied to the High Court of Lagos to set aside the Arbitration Award and included this second non-disclosure as a further ground to set aside the Arbitration Award amongst other relevant grounds.
4.3 On 25th February 2020, THE HIGH COURT OF LAGOS STATE SET ASIDE THE AWARD on the basis of the failure of the Chairman of the Tribunal to disclose his role as an expert witness in the prior Court proceedings in the UK and his consequent indirect association with Shell (SPDC) that ought to have been disclosed at the inception to give Global the opportunity to object to his nomination as Chairman of the Tribunal. Global and Shell are thus back to status quo with no Award.
5. APPEAL BY SPDC TO COURT OF APPEAL
5.1 On 18th May 2020, Shell (SPDC) appealed against the Ruling of the High Court of Lagos setting aside the Arbitration Award.
6. PROPOSED OUT OF COURT SETTLEMENT
6.1 GLOBAL HAS SUFFERED UNQUANTIFIABLE DAMAGE AND LOSS AS A DIRECT CONSEQUENCE OF SPDC’S UNJUSTIFIED CONDUCT IN DELIBERATELY FRUSTRATING GLOBAL FOR OVER SIX YEARS BY FAILING TO HONOR ITS EXPRESS CONTRACTUAL OBLIGATIONS TO SUPPLY A SPECIFIED QUANTITY AND QUALITY OF GAS UNDER ITS CONTRACT WITH GLOBAL. In the meantime, the Plant has been destroyed through vandalism and the FPSO repossessed with claims pending against Global.
6.2 GLOBAL NOW SEEKS TO REACH AN AMICABLE SETTLEMENT OF THIS LONGSTANDING DISPUTE WITH SHELL (SPDC) IN ORDER TO BE ABLE TO CLOSE THIS MATTER AND FOCUS ON THE EXECUTION OF OTHER GAS DEVELOPMENT OPPORTUNITIES IN NIGERIA AND AVOID PROTRACTED LITIGATION TO THE FURTHER DETRIMENT OF GLOBAL AND THE NATION.
This is a clear case of Shell, as Global Oil Giant, oppressing a reputable Nigerian Gas Company, which has committed millions of US Dollars in trying to execute a Gas Processing Agreement it had with Shell (SPDC), only to abandoned halfway to bear unredeemable losses. And that to us, is very unjust and unfair.
We, therefore, appeal that relevant authorities of the Royal Dutch Shell in The Hague, should intervene and have relevant Shell (SPDC) Management authorities concerned, directed/instructed to promptly do the needful, by initiating the process for the amicable settlement of this longstanding dispute between Shell (SPDC) and Global Gas & Refining Ltd, for the unquantifiable financial loss/damage, emotional and psychological trauma and precious time wasted and suffered by the latter, on account of this avoidable dispute. We believe that Shell (SPDC) should grow and learn from its past unpleasant experiences in Nigeria, by instituting the process in finding an amicable way to address this issue in the interest of all. That is the way we see it.
Zik Gbemre.
April 30, 2021
We Mobilize Others To Fight For Individual Causes As If Those Were Our Causes
RE: ICC ARBITRATION CASE 20331/TO AND NO:10/1910CGM/2017 GLOBAL GAS & REFINING LTD (GGRL) Vs. SHELL PETROLEUM DEVELOPMENT COMPANY NIGERIA LTD (SPDC)
RE: REQUEST FOR INTERVENTION FOR NEGOTIATED SETTLEMENT FOR THE TOTAL CLAIMS FOR DAMAGES/WASTED EXPENSES ON FAILED GLOBAL GAS/SPDC GAS PROCESSING PROJECT – REQUEST FOR THE URGENT NEED TO ADDRESS THIS INJUSTICE AND UNFAIR TREATMENT OF A REPUTABLE NIGERIAN GAS PROCESSING COMPANY BY SHELL (SPDC) IN REGARD TO A GAS FAILED PROJECT IN NIGERIA
As advocates of social justice and equity, especially as pertaining to issues concerning the oil and gas exploration and production activities in the Niger Delta region of Nigeria, we strongly believe that Contracts, particularly ‘Contractual Agreements’ at any level and zone of the Royal Dutch Shell global operations (in this case - Shell Petroleum Development Company of Nigeria Ltd -SPDC) , should never be allowed to create problems and undue issues between the Global Oil and Gas Giant, and its engaged Contractors at any level.
As a well-established global oil and gas multinational, Shell (SPDC) should always be seen to act professionally with consideration, fairness, and justice when in any business dealings with its Contractors/Stakeholders. Aside from the fact that this is aimed at protecting and projecting the ‘public image’ of Shell (SPDC) in a good light in Nigeria, it is also aimed at securing the company’s global image and reputation for posterity. It is in this light, that we consider it necessary to join voices with Global Gas & Refining Ltd (GGRL) to reiterate the longstanding subject petition and complaint, and request that it be urgently addressed promptly in the interest of all parties concerned.
The summary and synopsis of the subject matter as earlier buttressed by Global Gas & Refining Ltd (GGRL) is explained thus:
1. BACKGROUND
1.1 On 20 March 1998, after feasibility studies and Front-End Engineering & Design etc., Global Gas & Refining Ltd put together an international consortium to construct and manage a gas processing plant facility in Cawthorne channel in Rivers State, Nigeria, based on a signed gas sale and purchase agreement with Shell (SPDC) for over 160mmscf of gas per day.
1.2 Prior to the signing of the GSPA, the Federal Government of Nigeria approved and authorized the transaction between the Parties as a strategic Project towards the development/harnessing of the Nation’s wasting gas potentials and natural resources.
1.3 After Global had made SUBSTANTIAL FINANCIAL COMMITMENTS to the project but before the completion of the construction of the gas processing plant, Shell (SPDC) subsequently sought to renege on the gas supply contract it had with Global, leading to arbitration between Global & SPDC in 2000, in which late Chief Gani Fawehinmi was Global’s counsel. (the First arbitration)
2. SETTLEMENT OF FIRST ARBITRATION AND RENEGOTIATED GAS AGREEMENT
2.1 Shell (SPDC) offered Global a substantial settlement to give up its contractual rights under the first gas supply contract, which Global declined and instead, negotiated a reduced quantity of gas of 80mmscf per day, which is the volume stipulated in the present agreement dated March 15th., 2002, that was entered into with Shell (SPDC). This is the agreement in dispute between Global and Shell (SPDC) that was the subject matter of the Second arbitration proceedings that culminated in the Arbitration Award that was set aside on February 25th. 2020, by the High Court of Lagos.
Global thereafter performed all its obligations under the new agreement signed by Global and Shell (SPDC), including completion of the construction of the gas processing plant, procurement, and mooring of an FPSO and the construction of a 24km pipeline at a total receipted cost well in excess of $400m (Four Hundred Million US Dollars).
2.3 THE ISSUE BETWEEN GLOBAL AND SHELL (SPDC) AROSE WHEN SHELL (SPDC) FAILED/NEGLECTED TO MEET ITS OWN CONTRACTUAL GAS SUPPLY OBLIGATIONS TO GLOBAL between 2005.... and..... 2010 during which period the project remained in a “pre-commissioning-testing phase” because Shell (SPDC) failed/neglected to supply the contractual quantum of gas to Global to enable commissioning, as per the new agreement.
3. SECOND ARBITRATION
3.1 On 7 April 2014, Global gave Shell (SPDC) Notice of Arbitration under the auspices of the ICC Court of Arbitration in accordance with the new gas supply and processing agreement it had with Shell (SPDC) WHEN IT BECAME CLEAR THAT SHELL (SPDC) HAD NO INTENTION OF FULFILLING ITS GAS SUPPLY OBLIGATIONS UNDER THE CONTRACT. Shell (SPDC) thereupon, purported to terminate the Gas Supply and processing agreement in respect of which they had never fulfilled their contractual gas supply obligations to enable the commissioning of the project. Global’s claim was for $303m (Three Hundred & Three Million US Dollars), representing only a part of its total expenditure on the project that was supported by receipts of expenditure. No claim whatsoever was made for loss of profit in respect of SPDC’s continuous and deliberate breach that was proved by the evidence.
3.2 Prior to the hearing in the Arbitration, the Parties [Shell (SPDC) and GGRL] made attempts to amicably resolve the dispute. By letters, Shell (SPDC) confirmed that it “is not averse to an amicable settlement of this dispute,” but required its (SPDC) Partners “consent to the settlement discussions and their mandate for any offer to be made.”
3.3 Global, had by a letter dated 7th October 2015 in response to SPDC’s request for a settlement figure, OFFERED TO SETTLE THE ARBITRATION PROCEEDINGS FOR THE SUM OF US$280M (TWO HUNDRED & EIGHTY MILLION US DOLLARS) IN FULL AND FINAL SETTLEMENT OF ALL ITS CLAIMS FOR RECEIPTED WASTED EXPENDITURE AND COSTS INCURRED as a result of the Global’s reliance on SPDC’s contractual commitments under the GPA to supply the agreed quantity and quality of Gas.
3.4 The Arbitration proceedings were heard by a panel of three arbitrators. In the course of the Arbitration proceedings, Global independently learned of and objected to the non-disclosure by two of the three arbitrators, namely the Shell (SPDC) appointed Arbitrator and the Tribunal Chairman, of a professional relationship between them both and SPDC’s lead counsel in the arbitration, who had invited them during the pendency of the proceedings to join a new arbitration body of which he was President! This allegation of non-disclosure was not denied by either of the affected arbitrators or by the Shell (SPDC) lead counsel.
3.5 The ICC Court of Arbitration to whom the objection was made, notwithstanding its very strict rules of disclosure by arbitrators, dismissed Global’s objection and consequent request that the two affected arbitrators be removed, even though the ICC Court also ruled that the acceptance of their appointment by the two arbitrators was inappropriate and ordered them to immediately step down from the appointments during the continuation of the proceedings.
3.6 On May 30th, 2017, after multiple unexplained adjournments, to deliver its Award beyond the stipulated period for an Award to be delivered from the conclusion of the proceedings, the Arbitration tribunal delivered an Award in favor of Shell (SPDC) and dismissed Global’s claim entirely. The Award was signed by the same two Arbitrators whom Global had previously asked to disqualify themselves on account of the likelihood of their bias arising from the deliberate non-disclosure of their relationship with the Shell (SPDC) lead counsel.
3.7 The third Arbitrator however signed a compelling dissenting Award, (the Dissenting Award) based on the evidence and eloquently HIGHLIGHTED THE NUMEROUS BLATANT FACTUAL ERRORS IN THE MAJORITY AWARD SIGNED BY THE SPDC APPOINTED ARBITRATOR AND THE CHAIRMAN OF THE TRIBUNAL. The third Arbitrator awarded Global the sum of $245,433,583.88 (Two Hundred & Forty-Five Million, Four Hundred & Thirty-Three Thousand, Five Hundred & Eighty-Three US Dollars and Eighty-Eight Cent) on the merits of its claim based on verified and documented receipted expenses that were not contested.
3.8 In an unprecedented twist, the Award signed by the Shell (SPDC) appointed Arbitrator and the Chairman was written as a reply or response to the Dissenting Award, seeking to answer each and every point raised by the dissenting Award as if the dissenting Award had preceded the Award and MAKING IT CLEAR THAT THE MAJORITY AWARD HAD BEEN IRREGULARLY REVISED AND REWRITTEN AFTER RECEIPT OF THE DISSENTING AWARD. The norm is for the dissenting Award to highlight its disagreement with the Award and give reasons for its dissent.
4. BIAS OF ARBITRATORS AND SETTING ASIDE THE AWARD
4.1 Thereafter, it also came to Global’s knowledge that the Chairman of the Arbitration Tribunal had also not disclosed his important role as an expert witness in prior Court proceedings in the UK where he was based, between the parent company of Shell (SPDC) and a local community in Rivers State, which he ought to have disclosed as an indirect association with Shell (SPDC) through its parent company.
4.2 Global immediately applied to the High Court of Lagos to set aside the Arbitration Award and included this second non-disclosure as a further ground to set aside the Arbitration Award amongst other relevant grounds.
4.3 On 25th February 2020, THE HIGH COURT OF LAGOS STATE SET ASIDE THE AWARD on the basis of the failure of the Chairman of the Tribunal to disclose his role as an expert witness in the prior Court proceedings in the UK and his consequent indirect association with Shell (SPDC) that ought to have been disclosed at the inception to give Global the opportunity to object to his nomination as Chairman of the Tribunal. Global and Shell are thus back to status quo with no Award.
5. APPEAL BY SPDC TO COURT OF APPEAL
5.1 On 18th May 2020, Shell (SPDC) appealed against the Ruling of the High Court of Lagos setting aside the Arbitration Award.
6. PROPOSED OUT OF COURT SETTLEMENT
6.1 GLOBAL HAS SUFFERED UNQUANTIFIABLE DAMAGE AND LOSS AS A DIRECT CONSEQUENCE OF SPDC’S UNJUSTIFIED CONDUCT IN DELIBERATELY FRUSTRATING GLOBAL FOR OVER SIX YEARS BY FAILING TO HONOR ITS EXPRESS CONTRACTUAL OBLIGATIONS TO SUPPLY A SPECIFIED QUANTITY AND QUALITY OF GAS UNDER ITS CONTRACT WITH GLOBAL. In the meantime, the Plant has been destroyed through vandalism and the FPSO repossessed with claims pending against Global.
6.2 GLOBAL NOW SEEKS TO REACH AN AMICABLE SETTLEMENT OF THIS LONGSTANDING DISPUTE WITH SHELL (SPDC) IN ORDER TO BE ABLE TO CLOSE THIS MATTER AND FOCUS ON THE EXECUTION OF OTHER GAS DEVELOPMENT OPPORTUNITIES IN NIGERIA AND AVOID PROTRACTED LITIGATION TO THE FURTHER DETRIMENT OF GLOBAL AND THE NATION.
This is a clear case of Shell, as Global Oil Giant, oppressing a reputable Nigerian Gas Company, which has committed millions of US Dollars in trying to execute a Gas Processing Agreement it had with Shell (SPDC), only to abandoned halfway to bear unredeemable losses. And that to us, is very unjust and unfair.
We, therefore, appeal that relevant authorities of the Royal Dutch Shell in The Hague, should intervene and have relevant Shell (SPDC) Management authorities concerned, directed/instructed to promptly do the needful, by initiating the process for the amicable settlement of this longstanding dispute between Shell (SPDC) and Global Gas & Refining Ltd, for the unquantifiable financial loss/damage, emotional and psychological trauma and precious time wasted and suffered by the latter, on account of this avoidable dispute. We believe that Shell (SPDC) should grow and learn from its past unpleasant experiences in Nigeria, by instituting the process in finding an amicable way to address this issue in the interest of all. That is the way we see it.
Zik Gbemre.
April 30, 2021
We Mobilize Others To Fight For Individual Causes As If Those Were Our Causes