Oil & Gas - September 26, 2017

ALSCON: Court reserves ruling in N2.8 billion suit by BFIG against UC RUSAL

The Federal High Court, Abuja, on Tuesday reserved ruling till November 6 in a N2.8 billion suit filed by BFIGroup against UC RUSAL and the Bureau for Public Enterprises, BPE, over their roles in the controversial privatisation of the Aluminium Smelter Company of Nigeria, ALSCON.

Justice Jude Okeke was expected to deliver the judgment in the case. Although he was actually in court, he said he was not physically disposed to do so and requested that the ruling be postponed to November 6.

After calling out the case number, Mr. Okeke, said: “Although my judgment is ready, but unfortunately I will not be able to deliver it today. As you know, I am just coming out from the hospital. Please I request that we keep it (ruling) till when I am strong enough to do so.”

The case was filed in February 2013 by BFIG, the Nigerian-American consortium whose declaration by the National Council on Privatization, NCP as winner of the bid for the $3.2 billion smelter in 2004 was later cancelled by BPE in controversial circumstances, precipitating a prolonged crisis.

However, following the July 6, 2012 ruling of the Supreme Court reinstating it as the preferred bidder, BPE’s refusal to retrieve ALSCON from UC RUSAL informed BFIG’s decision to proceed to Federal High Court, Abuja with the suit demanding damages.

In the statement of claims that accompanied its application, BFIG asked for compensatory damages from UC RUSAL for ‘tortuous interference’ in its contractual relations with BPE, accusing the company of conspiracy to defraud, unfair competition and interference in prospective business advantage in the acquisition of ALSCON.

Named as defendants in the case were all companies under UC RUSAL, consisting JSC Russian Aluminium (RUSAL), JSC Bratsk Aluminium Plant, RUSAL America, Dayson Holdings Limited, a Shell Corporation subsidiary under the Commonwealth Trust Limited, a private Trust in Tortola British Islands, and 20 others.

BFIG President, Reuben Jaja, said the case became necessary as the consortium became frustrated after over seven months wait then for BPE to comply with the order to retrieve ALSCON from UC RUSAL and hand it over in line with the July 6, 2012 Supreme Court ruling.

The five-member Supreme Court panel had in its unanimous ruling not only reversed BPE’s decision to nullify BFIG’s emergence as the preferred bidder, but ordered the immediate sack of UC RUSAL as owner-manager of ALSCON.

But, UC RUSAL’s Managing Director, Anatoly Polovov, had dismissed the apex court’s order as lacking any consequence on his firm’s interest in ALSCON.

UC RUSAL then proceeded to sue the Nigerian government at the London Court of International Arbitration, LCIA, seeking an award for alleged breach of contract.

On January 29, 2013, the BPE, ostensibly obeying the Supreme Court order had sent to BFIG an offer letter for it to “Purchase 77.5 percent shares of the Aluminium SHELTER Company of Nigeria, ALSCON”, instead of Aluminium SMELTER Company of Nigeria, ALSCON.

The letter, accompanied by a 16-page SPA, was rejected by BFIG on the ground that it did not have any interest in acquiring the shares of the ‘Aluminium SHELTER Company of Nigeria’.

The only legal and acceptable document, BFIG insisted, was the 58-page Share Purchase Agreement, SPA for ALSCON that BPE sent earlier on October 8, 2012 for its review and approval.

The document, which was similar to the one UC RUSAL signed after its negotiation in 2006, covered a list of 17 key items, including financial statements, post-acquisition plan, liabilities, assets, gas sales and purchase agreements.

BFIG’s refusal to sign the SPA was used by the BPE as reason to, again, disqualify it, forcing a return to the Supreme Court for an order to compel the BPE to fully comply with its 2012 order.

Tuesday’s planned ruling would have coincided with the expected decision of the reconstituted NCP which is to meet in Abuja to deliberate on a number of pending issues affecting some transactions under the privatisation programme.

Presidency sources told PREMIUM TIMES on Monday that key among the issues planned for inclusion in the day’s agenda was the ALSCON.

On Saturday, PREMIUM TIMES reported exclusively about a recent failed deal brokered by the Minister of Mines & Steel Development, Kayode Fayemi, to get BFIG to accept a $35 million offer and forfeit its bid for ALSCON.

The outcome of the NCP meeting was still being awaited at the time of publishing this report.

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