Alleged $4.6m Debt: When Police Act As An Adjudicator and a Recovery Agency in a Civil Dispute

Despite the clear stand of the law and judgements of superior courts that the Nigerian police has no business in adjudicating on business disputes, or in the enforcement of civil contracts, or recovering of civil debts, the police still consistently interfere in civil cases.

Police involvement in recovering a claim in a civil dispute is again revealed in a criminal charge filed against the Chairman Chief Executive Officer of Lionstone Offshore Services Limited, Mr. Amaechi Ndili, his wife Njide and their company, Lionstone.

They were charged before the Lagos Special Offences Court, Ikeja over a civil business dispute between their company, Lionstone Offshore Services Limited and Hercules Offshore Nigeria Limited.

The defendants were alleged to have fraudulently converted the sum of $4.6 million said to belong to Hercules Offshore Nigeria Limited to their personal use, a matter that an Arbitration Tribunal in London has presided over and granted an award to Hercules Offshore Nigeria Limited

The dispute arose from a joint business agreement signed by the two companies: Lionstone, a Nigerian Company and Hercules Offshore Limited an American company decided to work together on the tender of a specific contract in the oil sector as a servicing that could be won from a major Oil Company. Lionstone with the assistance of Hercules bid on this contract, which they did not eventually win.

Under the Memorandum of understanding, MOU, parties agreed that all disputes that may arise in the course of the contract implementation, interpretation etc under the MOU must be submitted to the Arbitration Tribunal in London.

Unfortunately, as mentioned earlier, the parties were unable to win the contract, which they envisaged and bid for with ADDAX Petroleum under the MOU.

Prior to the contract submission date, and certainly well before the tenders closed, Lionstone (being an indigenous company) was solely awarded in interim contract by Addax in October 2010. Due to the nature of their pre-existing relationship Lionstone agreed to, and worked together with Hercules Offshore on this interim contract, which arose before the main tendered contract. This interim contract made no mention of Hercules at all, and was dated October 2010, while the Hercules/Lionstone MOU and its amendments was dated Dec 2011.

Under the new deal, and as a result of the potential strategic nature of their relationship both parties agreed to share the proceeds from the interim contract solely awarded to Lionstone by Addax. However, while the business was going on, Lionstone alleged breach of contract and good faith on the side of Hercules and insisted that Hercules remedy its breach.

The disagreement led both parties to submit themselves before the Arbitration Tribunal in London as contained in their MOU and at the end of its sitting, the Tribunal made its findings and granted the award to Hercules.

In a bid to enforce the arbitral award, Hercules Offshore Nigeria Limited approached the Federal High Court, Lagos in suit number FHC/L/CS/1461/2017 and the matter is currently before the Court of Appeal in appeal number CA/LAG/CV/344/2019. Lionstone rejected the claim stating that the Hercules and Lionstone were not in a partnership, nor an agency relationship (their contract affirms this point), and that Hercules was indeed in breach of local content laws in Nigeria.

While the litigation was ongoing in Nigeria Courts, Hercules Offshore petitioned the Nigerian police, asking the police to compel Lionstone to pay the contested sum, while alleging fraudulent conversion of money paid to Lionstone under the interim contract signed solely between Addax and Lionstone.

Lionstone denied the claim adding that the tender was in any case lost, and the only subsisting contract is between Lionstone and Addax solely. Further claiming that the foundation for the Hercules arbitration award was wrong.

Lionstone added that the only other existing contract is between Lionstone and Hercules, which is subject to arbitration at the time due to an alleged breach of MOU terms by Hercules.

Consequent upon the petition, police from the Special Fraud Unit, Ikoyi clamped down on all Lionstone’s accounts in Nigeria, while Lionstone on the other hand sued the police and Hercules for Tortious interference, claiming damages for injuries suffered by the unlawful interference in a civil dispute between parties.

Consequently, the police filed a charge against Amaechi Ndili, his wife Njide Ndili and their company, Lionstone Offshore Services Limited alleging fraudulent conversation of $4.6million

When the matter came up, the trial judge, Justice Sherifat Solebo directed that the case file be returned to the Chief Judge of the Lagos State High Court for reassignment as she would not be able to complete the trial before her retirement.

The police had in the charge alleged that the defendants committed the said offences between July 2012 and September 2013.

The defendants were alleged to have dishonestly converted to their personal use, $4.6 million, which they received from Addax Petroleum Development Nig. Limited on behalf of Hercules Offshore Nig. Ltd.

The position of the courts up to the Supreme Court has been that only matters that are criminal in nature should involve the attention of security agencies because they cannot make or remake a contract for people.

Specifically, section 8(2) of the Administration of Criminal Justice Act (ACJA) of 2015 excludes the police from civil disputes but this provision is often ignored, and a businessman and his family of stellar repute and education finds himself in a courageous fight.

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