JPMorgan urges U.K. Court to dismiss $875m Nigerian suit

JPMorgan Chase & Co, has requested a London court to dismiss a lawsuit brought by the Nigerian Government, accusing the Bank of failure to stop $875 million in corrupt payments.

The lending Bank insisted that it got the correct approvals from Nigerian officials before transferring the funds to accounts controlled by a former oil minister who has been convicted of money laundering, arguing that the government’s accusation has no real prospect of success. 

The Nigerian government had in 2018 filed a claim against JP Morgan Chase demanding over $875 million, accusing the bank of negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by the country’s former oil minister.

The suit filed in British courts is predicated on the purchase of the offshore OPL 245 oilfield in Nigeria by oil majors, Royal Dutch Shell and Eni in 2011. At the core of the case is a $1.3 billion payment from Shell and Eni to secure the block that the lawsuit says was deposited into a Nigerian government escrow account managed by JP Morgan. 

The Nigerian government in the suit said JP Morgan then received a request from finance ministry workers to transfer more than $800 million of the funds to accounts controlled by the previous operator of the block, Malabu Oil and Gas, itself controlled by former oil minister, Dan Etete. 

The lawsuit said JP Morgan then transferred the funds to two accounts controlled by Etete, without sufficient due diligence to make sure the money did not leave accounts controlled by the Nigerian government. 

The federal government said that JP Morgan acted with gross negligence by allowing the transfer of the money without further checks. It said JP Morgan should have known that, under Nigerian law, the money should never have been transferred to an outside company. “If the defendant acted with reasonable care and skill and/or conducted reasonable due diligence it would or should have known or at least suspected that it was being asked to transfer funds to third parties who were seeking to misappropriate the funds from the claimant and/or that there was a significant risk that this was the case,” the filing said. 

Late last year, a Milan judge ruled that Shell and Eni must stand trial in Italy, where Eni is headquartered, for a separate legal case in which Milan prosecutors allege bribes were paid to Etete and others as part of the same oilfield deal, including sums that went to Etete’s Malabu.