Nigeria has lost a $1.7 billion lawsuit against US investment bank, JP Morgan Chase & Co over its role in a disputed oilfield deal that occurred in 2011. The case had been tried at a London Court since February until the verdict in favour of JP Morgan came out earlier in the week.
The bank transferred hundreds of millions of dollars to Dan Etete, a former Nigerian minister of petroleum who was convicted of money laundering.
Nigeria’s claim is that these transactions were in breach of the bank’s Quinecare duty, which dictates that banks should not execute a customer’s instructions in the event that those instructions might facilitate an attempt to misappropriate that customer’s funds.
However, a London High Court judge declared that no such breach was committed in a ruling published on June 14.
The JP Morgan Lawsuit in Detail
The case, which had a six-week trial in London, was based on Nigeria’s allegations of negligence on the part of JP Morgan. The bank transferred funds totalling $875 million to the account of Malabu Oil and Gas, a company owned by Dan Etete. The payments were made in 3 instalments between 2011 and 2013.
The case assessed the whether the bank should have stopped the payments in line with its duty of care to the customer.
Nigeria sought damages that included the payment amount and interest, bringing the total amount to $1.7 billion. They alleged that JP Morgan had gone on to make the payments in the face of “glaring” red flags, including “overwhelming” evidence of fraud and clear warnings from the bank’s own compliance staff.
However, the bank vehemently denied this claim.
“J.P. Morgan is confident that it acted appropriately in making these payments, which were authorised by senior representatives of the Nigerian government, and only processed following extensive engagement with law enforcement and other agencies and courts. We will robustly defend against this claim,” said a spokesman of the bank before the trial.
The Judge who ruled on the case said, “With the benefit of hindsight JPMorgan would have done things differently. But again none of these things individually or collectively amount to triggering and then breaching its duty of care to its client.”
“This judgment reflects our commitment to acting with high professional standards in every country we operate in, and how we are prepared to robustly defend our actions and reputation when they are called into question,” JP Morgan said after the trial on Tuesday.
The Aftermath of The Ruling
The Federal Government (FG) of Nigeria has seemingly not come to terms with the ruling as it is said to currently be studying the judgement pronounced in the case.
Lai Mohammed, Nigeria’s Minister of Information and Culture made this clear while responding to questions from State House Correspondents after a Federal Executive Council meeting at the Presidential Villa on Wednesday.
Mohammed said that the FG’s lawyers will look into the ruling and determine whether or not to appeal the case.
Sources: Reuters, Nairametrics.