Julia Payne

LONDON, (Reuters) – A London court will hear a Nigerian lawsuit against a U.S. bank on Wednesday JP Morgan Chase (NYSE:) More than $1.7 Billion for its involvement in the 2011 disputed oilfield deal.

A civil suit was brought in English by Shell (LON 🙂 and Eni in relation to their purchase of OPL 245 offshore oilfield in Nigeria. It is currently the subject of litigation in Milan.

In the court documents seen by Reuters, Nigeria alleges JP Morgan was “grossly negligent” in its decision to transfer funds paid by the energy majors into an escrow account to a company controlled by the country’s former oil minister Dan Etete instead of into government coffers.

Etete is seeking damages for cash and interest. The total amount of the claims exceeds $1.7B. Court documents reveal that the Nigerian government asked JP Morgan at the time to transfer these funds as part of an oilfield sale.

J.P. Morgan feels confident it performed appropriately when making these payments. They were authorized by the Nigerian government’s senior officials. The payment was only made after extensive interaction with law enforcement, other agencies, and courts. “We will vigorously defend against that claim,” said a bank spokesperson.

London’s offices of the bank deal with Africa, Middle East and Europe.

Etete’s attorneys did not respond immediately to inquiries for comment. Etete does not participate in this lawsuit.

Shell and Eni also are not parties in the lawsuit at the London High Court. Shell refused to comment.

Eni said in an email: “Eni was finally acquitted following the trial in Milan since there was no case, so we have nothing to add with regards to the OPL 245 deal and to the London trial, which doesn’t involve Eni.”

London is a case that dates back to 1998. It was when Sani Abacha, a Nigerian military ruler, granted OPL 245 to Etete.

Industry experts criticized the $20 million price tag, which Etete paid for about $2 million according to court records. Experts believed it was too high considering that this block would yield billions in crude oil, but is still undeveloped.

Subsequent Nigerian governments fought Etete’s right to the field. This triggered years of legal dispute until an agreement was reached in 2011.

Etete’s Malabu Oil and Gas company handed Nigeria the undeveloped OPL 245 as part of a Resolution Agreement involving Shell and Eni.

Shell and Eni then paid the Nigerian government a $200,000 million signatory bonus and then put $1.1 Billion in an escrow account managed by JP Morgan.

The related Italian case against Shell and Eni in Milan was a trial that lasted from 2018 through 2021. Prosecutors in Italy claimed that the firms paid $1.1 Billion in bribes for Nigerian officials through the OPL 245 agreement.

The companies and their executives were acquitted by a panel of judges last March. Prosecutors appealed against the decision.

The Nigerian government spokesperson said that JP Morgan will be brought to justice in relation to the London case.

He stated that JP Morgan knew the payments would put its customer, Federal Republic of Nigeria, in danger of being defrauded.