Zenon Petroleum and Gas Limited has won an arbitration case instituted by Ignite Investment Limited in the London Court of International Arbitration (LCIA) over the share purchase agreement reached on the sale of Forte Oil Plc, formerly owned by billionaire businessman, Femi Otedola before he sold it to the latter. Zenon Petroleum was awarded $19.2 million by the LCIA in the dispute.
In the judgment delivered earlier this month, the tribunal ruled in favour of Zenon in three out of the four claims and ordered that Ignite make the shared purchase agreed payments less the amount awarded for one of the claims.
Recall that in June 2019, Otedola and his company, Zenon Petroleum and Gas company, reached an agreement with AbdulWasiu Sowami and his company, Prudent Energy Services Limited and Ignite Investments, for the purchase of 74 per cent share capital in Forte Oil Plc. Otedola sold the shares of Forte oil for $200 million at the time.
Ogun State-born Sowami was unable to pay the entire sum and so the payment was structured in such a way that he would pay the money in tranches. Prudent Energy and Services Limited and Sowami had provided a guarantee in favour of Zenon Petroleum and Gas Limited and its affiliates for the prompt payment of the deferred consideration as at when due. The sum of $6 million being part of the deferred consideration became due on June 18, 2022, and despite the demand letters served on Prudent Energy and Services Limited and its CEO, the debt was not paid.
Zenon Petroleum and Gas Limited had therefore urged a Federal High court in Lagos to wind up Prudent Energy and Services Limited on the ground of inability to pay its debts as earlier reported by THEWILL. However, before Otedola approached the court for the balance of his payment, Ignite Investments had triggered a dispute notice via a letter dated June 17, 2020, wherein the company had alleged claims for a breach of warranty relating to the share purchase agreement.
The dispute notice had alleged that Zenon breached certain warranties under the share purchase agreement. Both parties had agreed to meet with the intention to find a solution to the alleged claims by Ignite. Unfortunately, the meeting ended in a stalemate, following which Ignite filed a claim at the London Court of International Arbitration (LCIA) on the 18th of December 2020. Zenon then filed its response to the claim and counter-claimed against Ignite. A tribunal was then appointed by the LCIA consisting of three arbitrators namely Messrs Alain Choo Choy QC as the 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. And this month, the tribunal gave its judgement and awarded in favour of Zenon.
Ivory Ukonu is a versatile journalist with many years of experience, with entertainment and society reporting as her area of core competence.
