Judge Slams Shell, AFC for Defying Nigerian Orders in $3B Oil Block Dispute

The High Court of the Federal Capital Territory (FCT), Abuja, has declared as null and void an ongoing arbitration at the International Chamber of Commerce (ICC) in London initiated by Shell and a consortium of lenders against Aiteo Eastern Exploration and Production Company Limited. The ruling comes amid a protracted legal dispute over the $3.01 billion acquisition of Oil Mining Lease 29 (OML 29).

Delivering judgment on Tuesday, Justice S.B. Belgore condemned the arbitration proceedings, stating that they violated existing interim injunctions issued by the Nigerian court. He described the actions of the lenders, including Shell Western Supply & Trading, Shell International Trading & Shipping, the African Finance Corporation (AFC), and several Nigerian banks, as a “brazen affront” to Nigeria’s judicial authority.

The dispute began in 2021 when Tempo Energy Nigeria Ltd., a minority equity partner in the transaction, filed suit (FCT/HC/CV/079/2021) alleging it was excluded from key legal and arbitral proceedings despite its material interest. The court had granted an injunction in January 2021 restraining all parties from further pursuing the arbitration or related litigation abroad.

Despite these orders, the ICC arbitration reportedly continued through 2024. The Court of Appeal upheld the injunctions in April 2025 and awarded N1.5 million in costs, describing the defendants’ appeal as an abuse of court process. Subsequently, Tempo’s legal team, led by Kehinde Ogunwumiju (SAN), pressed for a complete nullification of the arbitration during hearings in May 2025.

Justice Belgore rejected arguments that the Nigerian court lacked jurisdiction over foreign arbitration and declared the ICC proceedings invalid. He ordered full compliance with previous court directives and awarded Tempo N500,000 in costs.

The ruling marks another chapter in Aiteo’s complex legal battle involving allegations of contractual breaches, exclusion of key partners, and misrepresentation. In a separate lawsuit before the Federal High Court in Abuja (Suit No. FHC/ABJ/CS/738/2021), Aiteo is suing Shell for $2.5 billion, claiming it misrepresented the condition of OML 29 at the time of sale in 2014.

Aiteo’s founder, Benedict Peters, reportedly invested nearly $1 billion in equity, with Tempo Energy contributing $136 million. However, persistent operational challenges and rampant crude oil theft have reportedly hindered Aiteo’s ability to meet debt obligations.

According to internal documents, the lending syndicate committed over $2 billion to the deal, including Zenith Bank ($323m), First Bank and GTBank ($200m each), Fidelity Bank ($175m), AFC ($125m), Ecobank and Union Bank ($100m each), and Sterling Bank ($60m), with Shell contributing $512m.

The case has been adjourned to September 29, 2025, for further hearings on consolidated interlocutory applications. The outcome is likely to set significant precedents for the limits of foreign arbitration and the jurisdiction of Nigerian courts in cross-border commercial disputes.