The Payments were made by JPMC to an entity called “Malabu”. This was in respect of an oil prospecting licence called “OPL 245”.

Nigeria’s case is that those sums were paid in furtherance of a fraudulent and corrupt scheme. The Nigerian government was, therefore, the victim of this scheme, Gbenga Oduntan and Akalemwa Ngenda, Coordinating Attorneys for World Anti-Corruption Research Network (WARN), Centre for Critical International Law, UNIKENT, said in a report on Sunday.

 

JPMC presented several technical defences. These include the so-called ‘No Quincecare Duty’ because– that duty was excluded by contract. It was also asserted that JPM’s role under the Depository Agreement was intended to be, “largely automatic or mechanical”. As leading counsel for JPM put it in oral submissions, the bank’s role was “to act like an ATM machine or a robot”.

 

The judgment did not find fraud and, the FRN’s case failed. Cockerill J however, highlighted the presence of very unattractive features in the transactions and an association with past corruption.

Yet the judge concluded that this was not enough to trigger the duty in relation to a specific fraud in 2011.

Cockerill J maintains a highly artificial distinction between significant features of a transaction which highlight high risks that are relevant for Anti Money Laundering procedures on the one hand and other general financial crimes and wider corruption on the other hand. 

The Court concludes that JPMC was not ‘on notice’ of fraud in relation to the 2011 payment. Even though JPMC was on notice for the 2013 payment, the test for gross negligence was not met. The judgment will be studied by banking law experts for years to come.

Meanwhile, the Nigerian government was restrained by the United Kingdom High Court of Justice from appealing last month’s ruling dismissing a $1.7 billion (£1.4 billion) claim against JP Morgan Chase Bank over the transfer of proceeds from the sale of OPL 245 in 2011.

The high court said there was “no real prospect” of overturning the ruling, City A.M reports.

The government had in June lost its $1.7 billion claims against JP Morgan Chase Bank over the transfer of proceeds from the sale of OPL 245 in 2011, operated by Malabu Oil and Gas Limited.

According to the judgment delivered by the Business and Property Courts of England and Wales Commercial Court, there was no proof that Nigeria was defrauded in the deal.

The government had sued JP Morgan on the grounds of “Quincecare duty”, alleging that the bank “ought to have known” that there was corruption and fraud in the transaction, which saw Malabu Oil and Gas Limited sell its 100 per cent stake in OPL 245 to Shell and ENI for $1.1 billion.

Nigeria argued that there were enough “red flags” for JP Morgan to have halted the transfers. However, the bank rejected Nigeria’s claims, maintaining that all due processes were followed and money-laundering checks were done, arguing that allegations of fraud only came up after a new government took over in Nigeria.

In the judgment, Sara Cockerill ruled that the Nigerian government could not prove that it was defrauded, saying it might be that, with the benefit of hindsight, “JPMorgan would have done things differently” but “none of these things individually or collectively amount to triggering and then breaching” the bank’s duty of care to its client.

Citing the London and Milan judgments, a former Attorney General of the Federation and Minister of Justice, Mohammed Adoke has called on the current Attorney General (Abubakar Malami)  to discontinue the cases against him. He suggests a “refrain from wasting Nigeria’s hard-earned foreign exchange by way of legal fees on local and foreign counsel in a bid to prove the existence of a fraud that never was”.

 

The report urged Nigeria to resist this siren, self-serving plea. “Firstly, because many of the charges against Adoke do not relate to fraud but hang on other alleged criminal offences.

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