Suppression of material facts: Court unfreezes Petralon’s 18 bank accounts

Justice Daniel Osiagor of a Federal High Court sitting in Lagos on Friday, October 15, 2022, vacated an order it granted, freezing the bank accounts belonging to an oil company, Petralon 54 Limited and its parent company, Petralon Energy Limited. The freeze encompassed their accounts wherever domiciled in 18 banks across the country.

The vacation order was given following the discovery of material facts suppression and deliberate falsehood by Eurafric Energy by the court.

Justice Osiagor in his ruling on a motion filed by the company praying the court to unfreeze the unjustly frozen accounts held that the court was misled to grant an order freezing the company’s accounts and subsequently reversed and lifted the order, unfreezing the bank accounts and cancelling the Post No Debit order that was already in effect across all the restrained banks.

The court in considering Petralon 54’s affidavit in response to Eurafric’s counter-affidavit deposed to on October 12, 2022 and the reply address in support of the motion to set aside the Exparte Orders said it revealed to the court that Eurafric had grossly misinformed it and caused the institution of justice to act in error. 

Eurafric Energy had approached the court, praying it to bar operations and transactions on the bank accounts belonging to Petralon 54 its parent company, Petralon Energy, and an unrelated company Tako E&P Solution, on the ground that the three oil companies did not declare the total quantity of crude sold, the amount it was sold and the royalty paid to the government in a Federal Government Agency transaction

However, in a Motion filed by Petralon 54, it prayed the court to lift the order banning operation of its account, arguing that the defendants, particularly Eurafric Energy ‘suppressed and deliberately’ hid material facts concerning the case from the court. 

Justice Daniel Osiagor in his consolidated judgment ruled that Exhibit Volte Face F exhibited in the Plaintiff’s Counter Affidavit and Exhibit G exhibited in the Defendant’s Counter clearly indicated that the Plaintiff (Eurafric Energy) gave consent for a loan of $2.2m to be obtained thereby making it a party to the debt repayment efforts to the holding bank which the funds it sought to freeze pertained to, but this fact was not disclosed to the Court before the restraining Order on the Defendant’s accounts. 

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Accordingly, the court held that upon consideration of Petralon 54’s Affidavit in response to Eurafric’s Counter Affidavit deposed to on October12, 2022 and the reply address in support of the motion to set aside the Ex parte Orders, Eurafric had grossly misinformed the court and caused the institution of justice to act in error. 

The banks affected by the order of court are Access Bank Plc, Ecobank Bank Plc, First Bank of Nigeria Plc; First City Monument Bank Plc; Guaranty Trust Bank Plc; Jaiz Bank Plc; Keystone Bank Plc; Polaris Bank Plc, Stanbic Ibtc Bank Plc, Zenith Bank Plc; Globus Bank Plc; Titan Bank Plc; Providus Bank Plc, Fidelity Bank Plc, Standard Chartered Bank Plc; Sterling Bank Plc; Union Bank of Nigeria Plc and United Bank for Africa Plc. 

It was revealed that until June 28, 2022 when Petralon 54 became the sole operator of the Dawes Island Field having being granted Petroleum Prospecting License No. 259 (PPL 259) by the Federal Government of Nigeria in accordance with the Petroleum Industry Act, 2021, the plaintiff (Eurafric Energy), Petralon 54, and Tako E&P Solutions were joint venture (JV) partners.  

The JV arrangement covered operation at the Dawes Island Marginal Field initially awarded to the Plaintiff (Eurafric Energy), which was revoked on the grounds of operational ineptitude, poor management and asset abandonment for more than fourteen years, resulting in loss of revenue to the Federal Government of Nigeria and being inimical / adversely impacting the development of Okrika communities, River State, where the asset is situated. 

Reviewing the process, an industry and legal analyst, Ibrahim Ajila asserted that the court was hoodwinked into granting an ex-parte mareva, adding that, this is an abuse of our judicial process, a premeditated malicious and gross intent to destroy the operations and reputation of another corporate entity through propagation of falsehood, which obviously is designed to pitch the entity against investors, and impair its capacity to continue receive funding from international capital sources.”