A United Kingdom Court pf Appeal sitting in London has rejected an application filed by JP Morgan seeking to dismiss the $875 million suit filed by Nigeria against the US bank.
The bank had urged the court to quash the Nigerian government’s case, arguing that it had no prospect of success.
However, all three justices at the Court of Appeal in London rejected JPMorgan’s argument in a ruling delivered on Tuesday.
“I have formed no view as to the overall merits of the (government’s) claim but there is nothing in the terms of the depository agreement which entitles (JP) Morgan Chase to bring the proceedings to an end at this stage,” Lady Justice Rose wrote in the decision.
Yesterday’s decision upheld a February ruling from a lower court.
The bank declined to comment on yesterday’s ruling. It has said it considers the allegations against it “unsubstantiated and without merit”, and that it would fight the case in court.
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The federal government had dragged JPMorgan to court for more than $875 million, accusing it of negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by the country’s former oil minister, Mr. Dan Etete.
The suit filed in a British court relates to a purchase of the offshore Oil Prospecting Lease (OPL) 245 oilfield in Nigeria by oil majors – Royal Dutch Shell and Eni in 2011.
At the core of the case is a $1.3 billion payment from Shell and Eni to secure the block that the lawsuit said was deposited into a federal government’s escrow account managed by JP Morgan.
JP Morgan was alleged to have received a request to transfer more than $800million of the funds to accounts controlled by the previous operator of the block, Malabu Oil and Gas, owned by Etete.
The court documents alleged that JP Morgan transferred the funds to two accounts controlled by Etete, without sufficient due diligence to ensure that the money did not leave the accounts controlled by the federal government.