The London Court of International Arbitration (LCIA) has in a judgement given in favour of billionaire, Femi Otedola’s Zenon Petroleum and Gas Limited, ordered Alhaji AbdulWasiu Sowami’s Ignite Investment Limited, to pay Forte Oil $19.2 million over sale dispute.
The Court also ordered Ignite to make the share purchase agreement (SPA) agreed on payments less the amount awarded for one of the four claims.
The arbitration judgement was delivered by the London Court of International Arbitration (LCIA) on October 7, over the share purchase agreement (SPA) reached on the sale of Forte Oil Plc to Ignite.
In June 2019, Zenon Petroleum completed the sale of 74.02 per cent shares of Forte Oil Plc to Ignite Investments (Ignite).
Recall that Ignite had in a claim filed before the London Court of International Arbitration (LCIA) on the 18th of December 2020, seeking an injunction stopping Zenon from claiming for the payment of $6 million, over an alleged breach of warranty relating to the SPA executed on the 20th of December 2018.
Meanwhile, the tribunal in its ruling in favour of Zenon, ordered that all due payments would be made by Ignite in compliance with the award.
Following the completion of the sale of 74.02 per cent shares of Forte Oil Plc to Ignite Investments (Ignite) in June 2019 by Otedola’s Zenon Petroleum, Ignite instituted a dispute notice in a letter dated June 17, 2020, wherein it alleged claims for a breach of warranty relating to the SPA executed on the 20th of December 2018.
It alleged that Zenon breached certain warranties under the SPA, in consequence of which, the purchaser made the relevant claims against Zenon.
In line with the SPA, the parties agreed to meet with the intention of finding a solution to the alleged claims by Ignite.
The solution however failed to yield satisfactory results, which was why Ignite filed a claim at the London Court of International Arbitration (LCIA). Zenon, in reaction, also filed a response countering the claim.
A tribunal was then appointed by the LCIA consisting of three arbitrators namely Messrs Alain Choo Choy QC (Presiding Arbitrator), Oba Nsugbe QC SAN and Segun Osuntokun.
The tribunal held the hearing of the matter on the 6th to the 9th of December, 2021, wherein all parties presented their case and cross-examined individual witnesses from both parties.
The tribunal then informed all parties that its decision would be given in May 2022.
However, due to the large caseload of the tribunal members, the judgement of the panel was delayed beyond the earlier stated date of May 2022.
Finally, October 7, the tribunal delivered its judgement in the case and awarded in favour of Zenon, three of the four claims and ordered that the Ignite make the SPA agreed payments less the amount awarded for one of the claims.
“You may recall that in accordance with the SPA, there were amounts due to Zenon of which a request was made to Ignite. Following this request, on the 9th of August 2022, Ignite filed a case in court for an injunction stopping Zenon from claiming for the due payment.
“Upon which, Zenon filed for the winding up of Ignite due to the unpaid liability in August 2022,” a statement explained.
Zenon Petroleum had in a suit filed at the Federal High Court, Lagos, with No. FHC/L/CP/1450/2022 requested for the wind up of Prudent Energy and Services Limited, which was the parent company of Ardova Plc over the inability of Alhaji AbdulWasiu Sowami the Chief Executive Officer of Prudent Energy and Services Limited parent company of Ignite Investment to pay a $6 million.
Zenon alleged that the debt emanated from the sale conducted in 2018, where Zenon Petroleum & Gas Limited and its affiliates had sold 74.02 per cent of the issued share capital of Forte Oil Plc (now Ardova Plc to Sowami and Ignite Investment).
It had stated that as security for the deferred consideration for the sale of the shares, Prudent Energy and Services Limited and Sowami had provided a guarantee in favour of Zenon Petroleum & Gas Limited and its affiliates for the prompt payment of the deferred consideration as at when due.
Zenon Petroleum & Gas Limited had therefore urged the court to wind up Prudent Energy and Services Limited on the ground of inability to pay its debts.