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Malabu Scandal – Nigeria Secures First Victory Against JP Morgan

Malabu Scandal – Nigeria Secures First Victory Against JP Morgan

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A High Court in London has dismissed a motion filed by U.S. firm, JP Morgan Chase, to halt its prosecution by the Nigerian government.

In a ruling on Thursday, the judge, Andrew Burrows, held that the American investment/finance firm “owed Nigeria a duty of care; as indicated by an implied term in the written agreement”.

“The duty of care was neither inconsistent with nor excluded by the terms of that agreement,” the court ruled.


The Nigerian government had sued JPMorgan over its alleged failure to block payments made from a massive oil deal that is subject to a string of international corruption investigations.

PREMIUM TIMES reported how two multinational oil firms, Shell and Eni, in 2011 transferred $1.1 billion to a Nigerian government account in JP Morgan for the oil block.

About $800 million of the money was subsequently transferred by the Nigerian government to accounts controlled by Dan Etete, former Nigerian petroleum minister who claims ownership of Malabu. Malabu was the oil firm Mr Etete, as petroleum minister in 1998, awarded the oil block, OPL 245, to.

The money paid by the oil firms is believed to have been laundered by top officials of the two oil firms and former officials of the Nigerian government during the Goodluck Jonathan administration. Many of those suspected to be involved are being prosecuted in Nigeria and Italy.

It is because of the ‘fraudulent’ transfers that the Nigerian government sued JP Morgan. The government claimed that the global bank should have known the money was being sent to suspicious characters.

In the civil suit filed in 2017, the Nigerian government accused JP Morgan of “gross negligence” in the events that resulted in the transfer of the funds.

According to the suit, the Nigerian government demanded a refund of $875 diverted from the government’s account.

JP Morgan’s argument

But while the trial was ongoing, JP Morgan filed its request seeking to stop the trial.

It did this on the grounds that Nigeria had no valid way of proving that the company’s actions resulted in the losses for which the suit was brought.


The London court said JP Morgan failed to establish that Nigeria had no realistic prospect of success in proving its allegation.

“On the causation of loss issue; the defendant bank has failed to establish that the claimant has no realistic prospect of loss,” it said.

The court also ruled that the issues raised by the Nigerian government were ‘clear enough’ for the alleged offence against JP Morgan.

“As regards the clarity issue on the correct interpretation of clause 10. 1 (a) in the depository agreement. The claim does not fail for clarity.

“My overall conclusion, therefore is that the defendant bank has failed to establish that the claimant has no real prospect success under CPR 24.4.

“For this reason, the application for reverse summary judgement under CPR 24. 2 fails.”

The court said the request to strike out the claim has “consequently failed”.

AGF Malami reacts

Nigeria’s attorney-general, Abubakar Malami, on Friday commended the ruling of the court.

In a statement by his spokesperson, Salihu Isah, Mr Malami said the federal government was now set to going on with its claim and had “full confidence that JPMorgan Chase will be held to account for its actions.”

Meanwhile, Nigeria has filed a separate $1.1bn legal claim against Shell and Eni to “recover the very significant sums lost to corruption and the unlawful activity” of the two energy majors. On its part, Shell and Eni have said their deal with the federal government was legal and that the payment was made to the state and they had no part to play in what happened to the money afterwards.

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