3 December 2012

Nigeria: U.S. Firm Accuses FG, Nigerian Judiciary of Corruption in U.S. Court

A United States-based multinational corporation with a strong presence in Nigeria and enjoying the patronage of the Federal Government in the oil and gas sector, General Electric International Company (GEC), has accused the Federal Government and the Nigerian judiciary of alleged promotion of inefficiency and corruption.

The plaintiff, Q Oil and Gas Services Nigeria Ltd, had dragged the General Electric before a High Court of Rivers State while the court had on September 29, 2010, entered judgment in favour of Q Oil & Gas. The court further directed General Electric to pay $5.5m as general damages to the plaintiff.

Copies of the court processes were exclusively made available to LEADERSHIP yesterday.

The plaintiff had further filed a petition before the US court, asking it to direct General Electric to recognise the Nigerian money judgment and pay the said general damages of $5.5m to the plaintiff accordingly.

The plaintiff had further filed a petition, asking the US Court to "recognise" a Nigerian court judgment in the sum of $5.5 million entered against the defendant (General Electric) and directed the defendant to pay the plaintiff the said $5.5m accordingly. The plaintiff had filed the petition in pursuant to the Michigan Uniform Foreign Country Money Judgments Recognition Act of 2008 ("UFCMJRA").

But in its motion for Summary Disposition of the petition to recognise the Nigerian money judgment by Q Oil & Gas, General Electric is asking the US Court not to recognise the Nigerian judgment on the grounds of alleged corruption and lack of due process.

According to the General Electric, the judgment can be faulted on the alleged grounds that the verdict "was rendered under a judicial system that does not provide impartial tribunals or procedures compatible with the requirements of due process of law". In its submission to the US Court on why the Nigerian judgment must not be recognised in the US, the General Electric also relied on the US State Department's Country's Report on Nigeria for 2012 which contained certain damning findings about the Nigerian judicial system.

Citing possible bias in the proceedings, General Electric also claimed that "the Nigerian trial court's September 29, 2010 default Judgment granted Q Oil & Gas' claim for declaratory relief claims and all of the damages it sought, including $5,000,000 USD in supposed "general" damages, without a shred of evidence, and without a formal trial, contrary to Nigerian law and public policy".

The US State Department's Country's Report on Nigeria reads in part, "Although the constitution and law provide for an independent judiciary, the judicial branch remained susceptible to pressure from the executive and legislative branches and the business sector. Political leaders influenced the judiciary, particularly at the state and local levels. Understaffing, underfunding, inefficiency, and corruption continued to prevent the judiciary from functioning adequately. Judges frequently failed to appear for trials, often because they were pursuing other sources of income and sometimes because of threats against them. In addition court officials often lacked the proper equipment, training, and motivation to perform their duties, with lack of motivation primarily due to inadequate compensation. During the year Supreme Court judges called for a more independent judiciary".

"On August 18, the National Judicial Council (NJC) suspended the President of the Court of Appeal (PCA), Justice Isa Salami, after he refused the NJC's directive to apologise to the NJC and the chief justice of Nigeria, Justice Aloysius Katsina-Alu. Salami had accused Katsina-Alu of interfering in the proceedings of the 2007 Sokoto State gubernatorial court case. In an attempt to settle the dispute, the NJC set up three panels to investigate the disagreement.

"The panels declared neither justice was at fault, declared the issue resolved, and requested that Salami apologise to the NJC and Katsina-Alu. The Nigerian Bar Association (NBA) reached contrary findings, and Salami refused to apologise. "After the NJC suspended Salami, President Goodluck Jonathan used his constitutional authority to recommend the compulsory retirement of Salami and appointed Justice Dalhatu Adamu as acting president of the Court of Appeal.

"The case raised questions regarding the partisan nature and level of independence within the judiciary. Salami appealed the ruling, and the court case continued at year's end".

According to General Electric, the US State Department's findings on Nigeria are consistent with a similar finding on the Liberian Courts for the same year which a US Court of Appeals had relied upon to refuse recognition to a Liberian Judgment in the US. "The court found the Country Reports reliable because the Reports are submitted annually, and are therefore investigated in a timely manner. They are prepared by area specialists at the State Department" and based on the State Department's findings, the judgment of the Nigerian court is unenforceable in Michigan, GE argued.

In addition, General Electric also urged the US Court not to recognise the judgment because it was "rendered in circumstances that raise substantial doubt about the integrity of the rendering court with respect to the judgment, or the specific proceeding in the foreign court leading to the judgment was not compatible with due process of law."

Finally, General Electric prays the US Court to dismiss the petition for recognition or in the event the "Court does not dismiss the complaint, this Court should enter an order staying this proceeding until the conclusion of all appeals in Nigeria."

Q Oil and Gas is expected to file its response to the allegations this week.

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