Companies Lack Power to Enforce Content Act, – Court


An Edo State High Court in Benin has held that Nigerian companies lack power to enforce the provisions of the Oil and Gas Industry Content Development Act, 2010 against international petroleum producing companies operating in the country.

The court ruled in a case brought by CMES Flange and Fittings Limited against three international oil producing companies – Shell, Chevron and Mobil.

Chief Judge of the State, Justice Esohe Ikponwen, said the plaintiff had no locus standi to bring action against the companies for noncompliance with the provisions of the Act.

He said the Act already provided for mechanism of supervision, coordination, monitoring and implementation  of its provisions  with the establishment of the Nigerian Content Monitoring Board in section 69 of the Act.

Besides, he held that the power to institute a suit for breach of its provisions resides with the monitoring body only.

The Court also agreed with the submission of the defendants’ counsel ,Dr Momodu Kassim-Momodu, that the plaintiff did not disclose any reasonable cause of action against the international petroleum companies.

The court held that it lacked jurisdiction to determine the suit against the oil companies, especially as there was no evidence before the court that the indigenous company bided for any contract with any of the three petroleum companies; or that the international companies have been awarding  contracts to only foreign contractors.

The court also agreed with the defendants that since none of them resides or does any business in Edo State, the High Court of Edo State was devoid of the territorial jurisdiction to entertain the suit.

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The court also upheld the defendants’ argument that the failure of the claimant to comply with the mandatory provisions of Section 97 of the Sheriff and Civil Processes Act by endorsing the Writ of Summons as specified in the law rendered the Writ of Summons fundamentally defective and therefore null and void.

The judge frowned at the filing of the case in the State High Court instead of the Federal High Court, stating that it is the Federal High Court that has jurisdiction over oil and gas matters.

A Benin based indigenous company -CMES Flanges and Fittings Limited, in a suit brought by its counsel, LI T Erhabor, claimed that Shell, Chevron, and Mobil did not comply with the Nigerian Content Act in respect of contracts for provision of flanges.

The company alleged that the defendants are mandated to carry out all fabrication and welding activities in Nigeria, saying that they set up a factory in Benin City to produce flanges, yet the trio of Shell, Chevron and Mobil have refused to patronise the company.

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