April 16, 2024

Otedola gets $19 million from Sowami’s Ignite investment as arbitration award over sale of Forte Oil

Femi Otedola, Nigeria’s billionaire and Chairman of Zenon Petroleum and Gas Limited, has received $19 million as arbitration award from Abdul Wasiu Sowami, Chairman of Ardova Plc, thereby offering Ignite Investments the final opportunity to complete the acquisition of Forte Oil Plc.

 

EnergyDay gathered that the settlement between the two is coming on the sideline of the ruling in October, 2022, by a London Court of International Arbitration (LCIA) ordering Ignite Investments to make Special Purchase Agreement (SPA)  agreed payments less the amount awarded for one of the claims by Otedola’s Zenon Petroleum.

 

A check showed that Ignite Investments had in 2019, acquired Forte Oil’s 983 million shares equal to a 75 percent stake, a deal estimated at N64.9 billion, which was paid in three installments.

 

Ignite letter dated June 17, 2020, instituted a dispute notice in a letter, wherein it alleged claims for a breach of warranty relating to the SPA executed on the 20th of December 2018.

 

The purchaser’s notice alleged that Zenon breached certain warranties under the SPA, and then made the relevant claims against Zenon.Based on the rules guiding SPAs, Ignite and Zenon agreed to meet with the intention of finding a solution to the alleged claims by Ignite, but failed to reach a compromise.

 

Ignite later went ahead to file a claim at the London Court of International Arbitration (LCIA) against Zenon.  Zenon in reaction to the claim also filed a counterclaim.

 

A tribunal was then appointed by the LCIA consisting of three arbitrators viz: Messrs Alain Choo Choy QC (Presiding Arbitrator),  Segun Osuntokun. and Oba Nsugbe QC SAN.

 

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 judgment of the panel was delayed beyond the earlier stated date of May 2022.Finally, on October 7, the tribunal delivered its judgment in the case and awarded in favour of Zenon, three of the four claims and ordered that Ignite make the SPA agreed on 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 the due payment.

 

“Upon which, Zenon filed for the winding up of Ignite due to the unpaid liability in August 2022,” a statement explained.