Monday, July 16, 2018 07.20PM / Proshare Investigations
1. These proceedings arise out of the relationship between the investors in a project to acquire and exploit the upstream petroleum business and assets of ConocoPhillips in Nigeria. On one side is Whitmore Asset Management Limited ["Whitmore"], a single purpose investment vehicle incorporated in the BVI and in the ultimate beneficial ownership of two Nigerian businessmen, Mr Jubril Adewale (Wale) Tinubu ["Mr Tinubu"] and Mr Omamofe (Mofe) Boyo ["Mr Boyo"]. On the other side is Ansbury Investments Inc ["Ansbury"], another single purpose investment vehicle, this time incorporated in Panama, and in the ultimate beneficial ownership of family trusts set up by an Italian-Nigerian businessman, Mr Gabriele Volpi ["Mr Volpi"]. Whitmore is the Claimant and Ansbury the First Respondent in this arbitration.
2. We will describe the history of the parties' relationship and the current disputes in greater detail below. In summary, the parties incorporated a joint venture vehicle in the BVI called Ocean and Oil Development Partners Ltd ["OODP BVI"], which itself owned all but one of the shares in a Nigerian company having the same name ["OODP Nigeria"]. These two entities are the Second and Third Respondents respectively in this arbitration. The equity in the venture was initially agreed to be held as to approximately 60% by Ansbury and approximately 40% by Whitmore. Shareholder loans were made by Ansbury to finance the venture.
3. Prior to the disputes with which these proceedings are concerned, the contractual relations between the parties were governed by an agreement in writing dated 17 June 2013, which was signed on behalfofboth Whitmore and Ansbury. It has been referred to in this arbitration as the Third Shareholders' Agreement [the "Third SHA"].
4. The disputes between the parties can be grouped under five headings:
a. disputes as to our jurisdiction;
b. a dispute as to whether Ansbury has made a legally binding agreement to transfer a 20% share in the venture to Whitmore, such thatthe parties' respective equity shares in OODP BVI would switch to 60% for Whitmore and 40% for Ansbury, as more fully set out in an unsigned draft document entitled the Fourth Amended and Restated Shareholders Agreement [the "Fourth SHA"]. We will call this the "60/40 Dispute";
c. whether the repayment date for various shareholder loans advanced by Ansbury were extended to 1 January 2018, alternatively 1 January 2020, either by binding agreement or by virtue of some kind of estoppel. We will call this the "Loan Extension Dispute";
d. whether the parties have made a legally binding agreement to convert an outstanding loan of US$150m (plus interest) into shares in Oando E&P Holdings Limited with the consequence that that amount can no longer be recovered by Ansbury in cash by way of loan repayment. We will call this the "Conversion Dispute"; and
e. whether the parties have made a legally binding agreement to require two signatures on the bank mandates for the venture companies. The parties have referred to this as the "Accounts Dispute" and we will do likewise.
5. Before narrating the history of the underlying dispute in greater detail, it is convenient to describe the procedural history of the arbitration at this point, because it impacts on the disputes about our jurisdiction.
6. By a Request for Arbitration made on 19 April 2017 [the "Request"], DLA Piper UK LLP as solicitors to Whittmore requested arbitration pursuant to Clause 13.2 of the unsigned and undated Fourth SHA, which was said to have been agreed between the parties in November 2014.
7. Paragraph 5 of the Request alleged that the material terms of the Fourth SHA were orally agreed at a meeting between the parties on or around October 2014, as evidenced (inter alia) by (a) an exchange of emails at Whitmore's Exhibit 2 and (b) part-performance of the Fourth SHA as evidenced by public statements of Oando Pic, copies of which were included in Whitmore's Exhibit 3.
8. The Request explained that the same parties had previously been in a relationship governed by the Third SHA. Both the Third SHA and the alleged Fourth SHA included an identical Governing Law and Dispute Resolution clause (Clause 13). Clause 13.1 provides for the agreement to be governed by English law Clause 13. 2. 1 defines a "Dispute" as comprising:
"a dispute, controversy or claim between the Parties-with respect to any matter arising out of or in connection with this Agreement, including any question with regard to Us existence validity or termination but excluding any dispute relating to a Deadlock Event..."
"Parties" is defined as comprising Ansbury, Whitmore, OODP BVI and OODP Nigeria. "Deadlock Event" is defined in Clause 5. 1 and includes situations where the shareholders fail to agree on a Schedule D matter or where the chairmen/chief executives fail to reach agreement following service of a Deadlock Notice.
9. Both the Third SHA and the draft Fourth SHA went on to provide for discussions to take place about the dispute, and in default of agreement, for the dispute to be referred to arbitration in accordance with the Arbitration Rules of the LCIA.
10. The Request referred to various disputes said to have arisen under the Fourth SHA and sought declaratory relief and orders for specific performance by reference to the terms of the Fourth SHA.
11. On 3 May 2017, Bird & Bird, solicitors to Ansbury, filed a Response to the Request [the "Response"] expressly (a) on behalf of Ansbury alone and (b) without prejudice to its contention that the Tribunal lacks jurisdiction over the claims made in the Request.
12. The jurisdictional case of Ansbury as set out in the Response was, in summary, that (a) the only operative agreement between the parties is the Third SMA; (b) no relief was sought in the Request under the Third SRA and in any event Whitmore would not be entitled to relief under that agreement; and (c) the Fourth SHA, including its arbitration clause, never became effective and binding on Ansbury with the consequence that the Tribunal had no jurisdiction over the claims made herein.
13. In the Request Whitmore nominated Harry Matovu QC as arbitrator, and in the Response the Ansbury nominated Professor Marco Frigessi di Rattalma as arbitrator.
14. The LCIA Court initially selected Philippa Charles as third and presiding arbitrator. A Tribunal consisting of Harry Matovu QC, Professor Frigessi di Rattalma and Philippa Charles was appointed by the LCIA on 8 May 2017.
That we dismiss the entirety of Whitmore's claim. As for the positive relief sought in paragraph 12 of Ansbury's Reply Closing submissions:
a. The declaration sought in paragraph 12(b) is granted.
b. Ansbury is entitled to a declaration that Whitmore is in breach of the repayment obligation in the First Loan Agreement. The remainder of paragraph 12(c) is refused.
c. The declaration sought in paragraph 12(d) is granted.
d. Ansbury is entitled to the declaration sought in paragraph 12(e) in relation to the alleged Oral Agreement and the alleged Conversion Agreement. It is also entitled to the declaration sought in relation to the alleged Extension Agreement, but subject to an estoppel which prevented Ansbury from requiring repayment of any of the loans prior to 1 January 2018.
e. The declaration sought in paragraph 12(f) is refused.
f. The relief sought in paragraph 12(g) does not arise. The alleged Conversion Agreement is inoperative for want of a duly executed agreement in writing.
g. The declarations and orders sought in paragraphs 12(h) to 12(k) are granted.
h. The relief sought in paragraph 12(1) and (m) does not arise.
i. The declaration sought in paragraph 12(n) is refused.
j. The demand letter referred to in paragraph 1 2(o) was premature at the time when it was sent, but it became effective on 1 January 2018.
k. The Tribunal's jurisdiction over the relief sought at paragraphs 12 (p) and (q) is reserved.
Ansbury sought an order for repayment of all outstanding loans (and interest) within 28 days of our Award or such reasonable time as the Tribunal might determine. Neither party addressed argument to us about this time limit. In these circumstances we will make the requested declaration that the principal loan amounts are due for payment and outstanding but we will reserve our jurisdiction to determine the time of payment as part of an application for a further partial award for payment of those principal loan 110 amounts. It will be open to Ansbury to invite us to determine the time of payment in advance of our determination of issues as to interest and costs.
FOR THE REASONS SET OUT ABOVE WE AWARD AND DECLARE AS FOLLOWS:
A. The Third SHA remains binding and operative upon the parties who are entitled to rely upon it for its full terms and effect.
B. The draft Fourth SHA has never become effective.
C. The draft Amended Loan Agreement has never become effective.
D. The draft Put and Call Option Agreements have never become effective.
E. Whitmore is in breach of the repayment obligation in the First Loan Agreement.
F. The alleged oral agreement to switch the parties respective shareholdings in OODP BVI is not binding on the parties.
G. The alleged oral agreement to extend the term of the loans to 1 January 2020 is not binding on the parties.
H. Ansbury was and remains estopped from claiming repayment of any of the loans prior to 1 January 2018.
I. The alleged oral agreement providing for the conversion of the US$150m loan made in February 2014 into shares in OEPH is not binding on the parties.
J. With reference to the bank accounts of OODP BVI, Whitmore and OODP BVI shall permit Ansbury to appoint an 'A' director and Ansbury and OODP BVI shall permit Whitmore to appoint a 'B' director as joint signatories.
K. With reference to the bank accounts of OODP Nigeria, Whitmore and OODP Nigeria shall permit Ansbury to appoint an 'A' director and Ansbury and OODP Nigeria shall permit Whitmore to appoint a 'B' director as joint signatories.
L. OODP BVI is presently indebted to Ansbury in the total principal sum of US$600m, being US$130m in respect of the initial loans and US$470m in respect of the subsequent loans which sums are overdue and owing.
M. Whitmore is presently indebted to Ansbury in the total principal sum of US$80m in respect of the loan made under the First Loan Agreement (as amended).
N. OODP BVI's letter of demand to OODP Nigeria dated 11 March 2017 was premature at the time when it was sent, but it became effective on 1 January2018.
O. We reserve our jurisdiction over all issues as to (i) orders for repayment by Whitmore and OODPBVI of the loans due and owing from them, (ii) any further issue consequential upon paragraph 368 above, (iii) interest and (iv) costs.
SAVE AS ABOVE ALL CLAIMS AND COUNTERCLAIMS HEREIN ARE DISMISSED.
Place of Arbitration: London, England