Aiteo’s Trouble Deepens As London  Court’s Judgment Favours  Shell, AFC And Other Nigerian Banks



The Nigerian indigenous oil and gas exploration company,  Aiteo Eastern E&P Company Limited is now having a running battle with Shell plc, Africa Finance Corporation, and seven Nigerian banks over loans facility extended to the company.

Consequently, a high court in England has ruled that Shell Plc, Africa Finance Corporation, and seven Nigerian banks have established their right to block Aiteo Eastern E&P Company Limited from taking legal action when a suit initiated by them against the oil firm has not been resolved.

According to a report by Premium Times, the verdict approving the “final anti-suit injunction” was delivered in April

Aiteo had urged the court to set aside the interim anti-suit injunction that had been granted ex parte. An anti-suit injunction is an order of a court restraining a party from commencing a legal action in relation to a dispute subject to an ongoing arbitration.

The claimants are Africa Finance Corporation, a multilateral development finance institution headquartered in Nigeria, Shell Western Supply and Trading Limited, and several Nigerian banks including Ecobank Nigeria Limited, Fidelity Bank plc, First Bank of Nigeria Limited, Guaranty Trust Bank plc, Sterling Bank plc, Union Bank of Nigeria plc, and Zenith Bank plc.

Efforts to get further clarifications from the company on the matter were not successful as phone calls to Mathew Ndiana-Abasi , the spokesperson of  Aiteo were switched off continuously. Also, a Whatsapp message to him was not responded to.

Outstanding Debt

The case concerns a debt allegedly owed by Aiteo to the nine claimants.

Details seen by PREMIUM TIMES show that based on two agreements dated September 2, 2014, Aiteo borrowed some US$2 billion from the lenders in order to purchase an interest in Nigerian oil fields and facilities. They include Shell’s OPL 29.

About 75 per cent of that funding came from AFC and the banks, regarded as “the onshore lenders”, via a Nigerian-law governed facility agreement known as “the Onshore Facility Agreement”. The rest came from Shell in the form of vendor financing via an English-law governed agreement and was dubbed “the Offshore Facility Agreement”.

In October 2018, the parties began to correspond in relation to sums which the lenders said were due to them from the borrower. On August 19, 2019, the lenders alleged certain breaches of the agreements and asked the borrower to remedy them. On September 10, 2019, the borrower denied that any sums were due in a letter addressed to the lenders.

On October 23, 2019 the lenders’ Nigerian lawyers, Aluko & Oyebode, sent a letter demanding payment of the outstanding debt within seven days.

Eight days later, Aiteo commenced proceedings against the lenders (and four other parties) in the Nigerian Federal High Court, asking the court to declare that it was not liable as alleged in the demand letter.

REMIUM TIMES understands that the basis of the claim concerned allegations of force majeure which led to requests by the borrower to restructure the facility agreements. Force majeure is an unforeseeable circumstances that prevent a party from fulfilling a contract. The borrower argued that since the lenders refused to restructure, there was no default.

Aiteo subsequently obtained an injunction in from the Nigerian court restraining the banks from taking legal action and “…acting in any way or manner or taking any step to interfere with the res of this dispute by giving effect to the content of the [Demand Letter], or taking any step to enforce any right in respect of alleged indebtedness of the plaintiff (being contested and disputed in this suit)”.

The court injunction also restrained the banks from “…acting on or taking any step pursuant to or in furtherance of the [Demand Letter], from taking over, obstructing, or interfering in any way or manner howsoever with the running of the business of the Plaintiff…”.


The banks appealed against the court injunctions, and sought an order dismissing the borrower’s suit.

Both parties have since engaged in commercial negotiations over the alleged debt. In one of its written evidence, the claimants argued that the loans, being in “extremely large amounts”, were “systemically important loans within the Nigerian banking system” and “represent significant credits on the books of the Onshore Lenders and a default under the loans would be a very serious matter for each Lender”.

The court documents stated that no progress was made with the Notice of Appeal for a number of reasons. In early 2020 there were two adjournments, and between 24 March 2020 and 4 May 2020, court sittings were suspended on account of COVID 19. The high court and court of appeal only returned to full operation on September 28, 2020, it stated.

By October 2020, one of the claimants said that it was becoming clear to all the lenders that the negotiations were stalling and although some lenders continued to hope that they would be successful, others began to doubt that there would be a successful restructuring.

On November 23, 2020, an attempt by the CEO of Sterling Bank, one of the lenders, to break the impasse with the borrower failed.


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