The High Court of the Federal Capital Territory, Abuja, has nullified ongoing arbitration proceedings at the International Chamber of Commerce, London, initiated against indigenous oil firm, Aiteo Eastern Exploration and Production Company Limited, by a group of lenders that partially financed its acquisition of Oil Mining Lease 29.

In a ruling delivered on Tuesday, Justice S.B. Belgore held that the ICC arbitration commenced in defiance of existing injunctive orders issued by the Nigerian court constituted a “brazen affront” to the nation’s judicial authority and was therefore void.

“The arbitration proceedings in London, undertaken in clear disregard of binding interim injunctions, amount to a violation of this court’s authority. It is a breach that cannot be condoned,” Belgore said.

The dispute stems from Aiteo’s $3.01 billion acquisition of OML 29 and the Nembe Creek Trunk Line from Shell in 2014. Benedict Peters, Aiteo’s founder, is reported to have contributed nearly $1 billion in equity to facilitate the transaction and revive crude oil production.

Tempo Energy Nigeria Ltd., a minority equity partner in the transaction, claimed it was sidelined in legal and arbitral proceedings despite having a material stake. The company also alleged that the consortium of lenders, including Shell Western Supply & Trading, Shell International Trading & Shipping, the African Finance Corporation, and several Nigerian banks, breached obligations under the financing agreements.

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Tempo filed suit FCT/HC/CV/079/2021 on January 14, 2021, seeking to restrain Aiteo and the lending syndicate from proceeding with the UK High Court action and ICC arbitration without its inclusion.

In response, the FCT High Court granted interim injunctions on January 22, 2021, barring the parties from taking further steps in the foreign proceedings pending the determination of the substantive matter.

However, the ICC arbitration reportedly continued between 2021 and 2024, in direct contravention of the court’s orders.

On April 25, 2025, the Court of Appeal in Abuja upheld the injunctions, describing the appeal lodged by the defendants as an abuse of court process.

The appellate court imposed costs of N1.5 million and ordered an expedited hearing of the outstanding applications before the FCT High Court.

At the resumed hearing from May 20 to 22, 2025, Tempo’s lead counsel, Kehinde Ogunwumiju (SAN), urged the court to nullify the ICC arbitration in its entirety.

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“The continued prosecution of the arbitration proceedings in London, in spite of subsisting Nigerian court orders, undermines the rule of law and judicial independence. It is not only contemptuous but unlawful,” Ogunwumiju told the court.

Lawyers representing the defendants, including Mrs. Joke Aliyu and Mr. Babatunde Fagbohunlu (SAN), argued that the Nigerian court lacked jurisdiction to interfere with foreign arbitral proceedings.

They further contended that arbitration was the preferred forum under the terms of the financing agreement.

However, Justice Belgore dismissed the preliminary objection as “incompetent and an abuse of the court process.”

“This court is not without power to restrain parties from proceeding with foreign arbitration where such steps offend the administration of justice in Nigeria,” the judge ruled.

The court accordingly granted Tempo Energy’s application, declared the ICC arbitration proceedings null and void, and reaffirmed that the interim injunctions issued in 2021 remained valid and binding on all parties.

Belgore directed full compliance with the court’s earlier orders and awarded N500,000 in costs to Tempo Energy.

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The matter was adjourned to September 29, 2025, for hearing of the consolidated interlocutory applications.

The arbitration is part of a broader legal tussle arising from Aiteo’s acquisition of OML 29.

In a separate case before the Federal High Court in Abuja (Suit No. FHC/ABJ/CS/738/2021), Aiteo is suing Shell for $2.5 billion, alleging fraud and misrepresentation in the sale of the oil block.

“The asset was significantly degraded at the time of sale. Shell failed to disclose the true condition of OML 29, including chronic operational and security challenges that continue to affect production.”

Aiteo claims the poor state of the asset, coupled with rampant crude oil theft, has severely impaired its ability to meet debt repayment obligations.

According to an internal bank document seen by our correspondent, the lenders committed approximately $2 billion to the transaction: Zenith Bank $323 million; First Bank and GTBank $200 million each; Fidelity Bank $175 million; AFC $125 million; Ecobank Nigeria and Union Bank $100 million each; Sterling Bank $60 million; and Shell Western $512 million.

Benedict Peters’ equity contribution reportedly amounted to $898 million in cash, with an additional $257 million provided at closing to cover transaction costs and restart operations. Tempo Energy, one of the smaller equity partners, contributed $136 million.