Court Sets Aside Tribunal Ruling Over Breach Of Contract Between Shell And Global Gas

FUNSHO AROGUNDADE

The High Court of Lagos has set aside the ruling by the Arbitral Tribunal which dismissed Global Gas and Refining Ltd’s claim of a breach of contract for the supply of gas by the Shell Petroleum Development Company.

In the ruling delivered on Tuesday, February 25, in Suit No: LD/1910GCM/2017 between Global Gas and Refining Ltd versus Shell Petroleum Development Company of Nigeria Ltd, the High Court of Lagos set aside the International Chambers of Commerce Award in which the Majority of the Arbitral Tribunal —Prof. Oba Nsugbe, QC, SAN and Mrs Doyin Rhodes-Vivour, SAN— with Mrs. Dorothy Udeme-Ufot, SAN dissented and delivered a minority opinion upholding the claims of the Claimant— dismissed the Claimant’s claims.

It was gathered that in the Court’s Ruling, the learned High Court judge underscored the fundamental importance of full and complete disclosure in international commercial arbitration and inter alia upheld the argument of Global Gas and Refining Ltd that the failure and neglect of the President of the Arbitral Tribunal — Prof. Nsugbe, QC, SAN — to disclose his earlier involvement in a matter in which the Respondent in the Arbitration —Shell— was involved amounted to gross misconduct for which the Award delivered by the Majority of the Arbitral Tribunal ought to and must be set aside.

In March 20, 1998, Global Gas, the first indigenous and independent gas processing, LPG producer and marketing company in the country, had successfully negotiated a Gas Sale and Purchase Agreement (GSPA) and executed its first gas agreement with Shell —for the supply and processing of associated gas from their Cawthorne channel oil and gas fields.

The multi-million dollar contract, which started as a huge money spinner for both firms, fell apart after Shell allegedly reneged on the agreement.

Under the GSPA, Global Gas was required to establish a gas processing plant whilst SPDC was obligated to establish its own gas gathering facility.

But the Shell purportedly conceived that Global Gas was in default of the agreed time to complete the construction of the facilities, and sought to terminate the GSPA.

Global Gas however countered Shell’s position by commencing an arbitration.

P.M.EXPRESS gathered that the matter had dragged so long since the GSPA provides that any dispute between the two will be settled by an arbitration under the rules of ICC Arbitration.

While Global Gas nominated Mrs. Udeme-Ufot, Shell nominated Mrs. Rhodes-Vivour as their Arbitrators respectively.

The ICC pursuant to Article 13 (1) of the ICC Rules confirmed the nomination/appointment of the arbitrators of the parties.

Similarly, on December 18, 2014, the Secretary General of ICC Court appointed Prof. Nsugbe as the President of the Arbitral Tribunal.

Since then the case has dragged.