The Chairman and Chief Executive Officer of Lionstone Offshore Services Limited, Mr. Amaechi Ndili, has denied owing Hercules Offshore Nigeria Limited to the tune of $4.6 million.
Ndili alleged that there were false representations in the precise nature of the business relationship between his company, Lionstone Offshore Services Limited (LOS), and Hercules Offshore Nigeria Limited.
Ndili and his wife, Njide, have been arraigned before the Special Offences Court in Lagos over a business dispute between their company and Hercules Offshore Nigeria Limited.
The defendants were alleged to have fraudulently converted the sum of $4.6 million for their personal use said to belong to Hercules Offshore Nigeria Limited.
However, Ndili in a court document stated that he was led to believe that he was effectively the exclusive local partner, and would continue to be, and that the formal confirmation of this in the form of an appropriate corporate structure and equity sharing arrangement was a simple formality.
According to him, "These false representations led me to believe and act as if I was exclusively aligned with Hercules to the exclusion of any other alliance or opportunity. They also led me to enter into a contract whose terms were not favourable to LOS. I have suffered losses as a result of this."
In addition, he said he has suffered losses under the Master Agreement, which Hercules has connected with the LOS dispute, by allegedly withholding monies due to Lionstone Energy and Marine Services (LEMS).
Therefore, he challenged the claim of $4.6 million by Hercules, stating that: "I put Hercules to strict proof on what it claims to have sustained by way of losses, as compared with the losses sustained by LOS and/or LEMs, and seek relief accordingly."
The dispute resulted from a joint business agreement signed by the two companies-Lionstone, a Nigerian company, and Hercules Offshore Limited, an American company-who decided to work together on the tender of a specific contract in the oil sector as a servicing that could be won from a major oil company.
Under the Memorandum of Understanding (MOU), parties agreed that all disputes that may come up in the course of the contract implementation and interpretation under the MOU must be submitted to the Arbitration Tribunal in London, United Kingdom.
Unfortunately, the parties were unable to win the contract, which they envisaged and bid for with Addax Petroleum under the MOU.
Prior to the contract submission date, and well before the tenders closed, Lionstone (being an indigenous company) was solely awarded an interim contract by Addax in October 2010.
According to court documents, due to the nature of their pre-existing relationship, Lionstone agreed to and worked together with Hercules Offshore on this interim contract, which arose before the main tendered contract.
This interim contract made no mention of Hercules at all and was dated October 2010, while the Hercules/Lionstone MOU and its amendments were dated December 2011.
Under the new deal, and as a result of the potential strategic nature of their relationship both parties agreed to share the proceeds from the interim contract solely awarded to Lionstone by Addax.
However, while the business was going on, Lionstone alleged breach of contract and good faith on the side of Hercules and insisted that Hercules remedy its breach.
The disagreement led both parties to submit themselves before the Arbitration Tribunal in London as contained in their MOU, and at the end of its sitting, the tribunal made its findings and granted the award to Hercules.
In a bid to enforce the arbitral award, Hercules Offshore Nigeria Limited approached the Federal High Court in Lagos in suit number: FHC/L/CS/1461/2017, and the matter is currently before the Court of Appeal in appeal number: CA/LAG/CV/344/2019.
However, Lionstone rejected the claim, stating that the Hercules and Lionstone were not in a partnership nor an agency relationship (their contract affirms this point), and that Hercules was indeed in breach of local content laws in Nigeria.
While the litigation was ongoing in Nigerian courts, Hercules Offshore petitioned the Nigerian police, asking the police to compel Lionstone to pay the contested sum, while alleging fraudulent conversion of money paid to Lionstone under the interim contract signed solely between Addax and Lionstone.
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Lionstone denied the claim, adding that the tender was in any case lost, and the only subsisting contract is between Lionstone and Addax solely, further claiming that the foundation for the Hercules arbitration award was wrong.
Lionstone added that the only other existing contract is between Lionstone and Hercules, which is subject to arbitration at the time due to an alleged breach of MOU terms by Hercules.
Consequent upon the petition, the Police from the Special Fraud Unit (SFU), Ikoyi in Lagos clamped down on all Lionstone's accounts in Nigeria, while Lionstone on the other hand sued the police and Hercules for tortious interference, claiming damages for injuries suffered by the unlawful interference in a civil dispute between parties.
Consequently, the police filed a charge against Amaechi Ndili, his wife, Njide Chizoba Ndili, and their company, Lionstone Offshore Services Limited, alleging fraudulent conversation of $4.6million.
Justice Olubunmi Abike-Fadipe has adjourned the case till May 16, 2023, for continuation of trial.
