Why Ex-Minister, Kuforiji-Olubi Is in Court With Foreign Partners (

THE ruling expected to be delivered by Justice Okon Abang of the Federal High Court, Lagos on the arguments canvassed by parties last week on whether to stay further proceedings in the on-going case initiated by PhoenixTide Offshore Nigeria Limited against Tidewater Marine International Incorporated, its local agent, Tidex Nigeria Limited, Total E & P Nigeria Limited and two others will form a pivot of the next step to be taken by parties presently before the law court. Others as defendants in the case are Total Upstream Nig Ltd, and Total E&P Nig Deepwater Ltd.

At the last proceeding, counsel to the first and second defendants, Dr Babatunde Ajibade, SAN, had argued that when an appeal is based on the challenge to the jurisdiction of the court, that in itself constitutes a special circumstance justifying a stay of proceedings pending the determination of the appeal.

However, Mr Ade Adedeji who represented the plaintiff contended in his counter-affidavit that the Preliminary Objection which Justice Abang earlier dismissed was frivolous, hence, it cannot apply such principle in the circumstance. He asked the court to refuse the application.

In its wisdom, however, the court formulated three issues, which it requested both parties to address in order to give its ruling. These are: whether a notice of appeal was valid, since only an uncertified photocopy was before him; whether a further affidavit can be filed without the court’s leave; and whether or not the grounds of appeal are of mixed law and facts. Already Justice Abang had directed parties to file and serve written arguments on the issues he raised within 21 days, while adjourned till May 26 for ruling.

Specifically, the suit is in relation to the operations of PhoenixTidex (created in 2005 by a company owned by former Commerce and Tourism Minister, Mrs Bola Kuforiji-Olubi-Phoenix Ocean Line Limited – and a foreign company, Tidewater Marine International Incorporated, as a wholly Nigeria company to provide support services to international oil companies). Its creation was in line with then legal regime, which required that vessels on bareboat charter for cabotage trade in the country must be hired by Nigerian citizens.

PhoenixTide, upon its creation entered into “blanket bareboat charter (BBC), technical services agreement (TSA) and marketing agreement (MA) with Tidewater Marine. By the agreements, Tidewater Marine was engaged to run PhoenixTide, including handling the management and operations of all vessels bareboat hired by the plaintiff, except for some other local issues.

In the course of its operations, PhoenixTidex provided services for some international oil companies (IOCs), which included Total E &P Nigeria Limited, Total Upstream Nigeria Limited, Total E & P Nigeria Deepwater Limited.

In the suit marked; FHC/L/CS/609/2013, PhoenixTidex stated that parties had no problem until some years later, when Nigerian investors in the plaintiff began to notice some changes on the part of its partner; Tidewater Marine in the company’s operations.

It was stated that the Nigerian directors became more concern about how Tidewater was running the affairs of the plaintiff when on November 4, 2010, the US Department of Justice announced that it had filed a criminal information, charging Tidewater Marine International Incorporated, a Cayman Island subsidiary of Tidewater Incorporated (collectively “Tidewater”), with conspiring and violating the books and records provisions of the Foreign Corrupt Practices Act (FCPA) for allegedly engaging in unethical practices in its operations in Nigeria and Azerbaijan.

To resolve the issue, the US Justice Department and Tidewater later entered into a deferred prosecution agreement that required, among other things, that Tidewater Marine pay $7.35 million as criminal penalty.

The plaintiff stated that in the following year, (2011) the Nigerian government moved against senior officials of PhoenixTide where the Economic and Financial Crimes Commission (EFCC) accused PhoenixTide of among others, non-payment of required taxes and non-disclosure of actual revenues in relation to their operations in the country. A terms of settlement and non-prosecution agreement was entered between the Nigerian government and PhoenixTide, including other companies with which it had relationships as a way of resolving the issue.

Under the settlement agreement dated February 25, 2011, the companies also undertook to ensure that their business dealings in the country were “carried out in accordance with all applicable laws and regulations.”

PhoenixTide stated that rather than comply with its undertaking as contained in the 2011 agreement with the Nigerian government, the 1st defendant (Tidewater) allegedly persisted in its alleged usual practice. It had argued that it was not opposing the severance of their relationship, but demanded indemnities to insulate it (the plaintiff), its shareholders and directors from any liabilities which may arise from its alleged refusal to comply with the 2011 non-prosecution agreement with the government.