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Malabu: Nigeria Loses $1.7 Billion JP Morgan Case

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Nigeria on Tuesday lost its $1.7 billion claim against JP Morgan Chase Bank over the transfer of proceeds from the sale of OPL 245 in the controversial Malabu oil deal.

Judge Sara Cockerill ruled Tuesday that the Nigerian government couldn’t show that it had been defrauded in the case.

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In the suit, Nigeria is claiming more than $1.7 billion for the bank’s role in the controversial deal. Nigeria also alleges that JP Morgan was “grossly negligent” in its decision to transfer funds paid by oil giants Shell and Eni into an escrow account controlled by a former Nigerian oil minister, Dan Etete.

Earlier in February, Nigerian lawyer, Roger Masefield, argued that the nation’s case rested on proving that there was fraud and JP Morgan was aware of the risk of fraud.

The evidence of fraud is little short of overwhelming,” the lawyer told the court.

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READ ALSO: Aircraft Maintenance: Nigeria Lost N1.25 Trillion In 2021 To Other African Countries

“Under its Quincecare duty, the bank was entitled to refuse to pay for as long as it had reasonable grounds for believing its customer was being defrauded.”

Quincecare refers to a legal precedent whereby the bank should not pay out if it believes its client will be defrauded by making the payment.

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Judge Cockerill said Tuesday that by the time of the 2013 payments, the bank was “on notice of a risk” of fraud.

There was a risk – but it was, on the evidence, no more than a possibility based on a slim foundation,” the judge ruled.

Background
The OPL deal details how Shell and Italy’s Eni in 2011 paid the Nigerian government of then president Goodluck Jonathan a combined $1.3 billion for an oil block. Of that amount $875 million was paid to Malabu Oil & Gas, a company controlled by former oil minister Dan Etete.

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Mr Etete had awarded Malabu the rights to the block in 1998 when he was Nigeria’s oil minister.

Within weeks of the deal in April 2011, half of Malabu’s money was allegedly packed into bags and paid out to Nigerian government officials and Western oil executives as cash bribes.

The deal has also spawned further lawsuits, including efforts by a new presidential regime in Nigeria to recover assets. A panel of judges in Milan acquitted the companies and executives, who all denied any wrongdoing, of bribery last March. Prosecutors have however appealed the ruling.

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Classified documents from Britain’s financial crime agency seen by this newspaper revealed how it allowed JP Morgan to pay $875 million of suspicious funds to Mr Etete, a former Nigerian oil minister widely known as a convicted money launderer.

The documents, rarely seen Suspicious Activity Reports (SARs), were filed by the banking giant’s London branch as it raised concerns about huge payments it was being asked to make by the Nigerian government to Mr Etete.

The reports were filed in 2011 and 2013 to the UK’s Financial Intelligence Unit (FIU), which at that time sat within the now defunct Serious Organised Crime Agency.

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Trial
The trial opened in February with details of the claim by Mr Masefield, who argued that the bank failed in its Quincecare duty.

READ ALSO: 2023 Presidency: Atiku Speaks On Picking Running Mate

Damages sought by Nigeria include cash sent to Mr Etete’s company, Malabu Oil and Gas, around $875 million paid in three installments in 2011 and 2013, plus interest, taking the total to over $1.7 billion.

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But Bloomberg reports Tuesday that the London High Court judge said no such breach took place.

The Federal Republic of Nigeria is naturally disappointed by the outcome of the judgment and will be reviewing it carefully before considering next steps,” a spokesman told Bloomberg. He added that the Nigerian government will continue its fight against fraud and corruption and to work to recover funds for the people of Nigeria.

JP Morgan in a statement said that the judgment reflects its commitment to acting with high professional standards in every country it operates in. The bank added that the judgement also shows how “we are prepared to robustly defend our actions and reputation when they are called into question.”

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PREMIUM TIMES.

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War: ‘You’re Doing Great Job, Thank You,’ Biden Tells Turkish President

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US President, Joe Biden, on Wednesday, thanked his Turkish counterpart, Recep Tayyip Erdoğan, for allowing Finland and Sweden to join NATO.

I want to particularly thank you for what you did, putting together the situation with regard to Finland and Sweden, and all the incredible work you’re going to try to get the grain out of … Ukraine,” Biden told Erdoğan during the NATO summit in Madrid.

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Turkey had initially kicked against the two nations joining NATO but later gave its green light to the move.

“You’re doing a great job,” Biden added.

Also Turkey has been in discussions with President Vladimir Putin’s side about exporting grain from Ukraine.

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The Turkish President Erdoğan said he hopes diplomacy will help to get grain out of Ukraine.

“I pray that we’ll be able to re-establish the balance through diplomacy in order to cultivate positive results, especially with regards to the grain,” Erdoğan told Biden.

READ ALSO: War: Syria Recognises Two Ukrainian Regions As Independent Nations

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“The conflict between Russia and Ukraine and the negative developments with regards to taking grain out of Ukrainian ports, as well as the developments involving oil and natural gas, require all of us to work together in order to settle the disputes once and for all,” he added.

There are countries that are deprived of the grain and we will open corridors and we will allow them access to the grain that they so need,” he said.

Erdoğan said it gave him “great pleasure” to meet with Biden “after a long interval.”

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Erdogan said that the two leader’s joint efforts mean that “we will be able to go back to our countries with our hands full.

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War: Syria Recognises Two Ukrainian Regions As Independent Nations

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Syria has decided to formally recognize the “independence and sovereignty of the Luhansk and Donetsk People’s Republics.”

This is according to Syrian State News Agency, SANA, CBN reports.

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“In an expression of the common will and the desire to establish relations in all sectors, the Syrian Arab Republic has decided to recognize the independence and sovereignty of both the Luhansk People’s Republic [LPR] and the Donetsk People’s Republic [DPR],” SANA reported, citing an official source in Syria’s foreign ministry.

READ ALSO: War: Spain Sends Clear Warning To Russia

“Communication with both countries will be established to agree on a framework for strengthening the relationships between our countries including initiating diplomatic relationships based on the established (diplomatic) rules,” the foreign ministry source added, according to SANA.

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This makes Syria the only other country aside from Russia, to formally recognize the independence of the breakaway regions.

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Again, Reps Reintroduce Controversial Water Resources Bill

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The House of Representatives on Wednesday reintroduced the controversial Water Resources Bill.

The sponsor, Honourable Sada Soli, said wide consultations have been made for a better version of the bill. He assured that if at any point, indications suggest that it will negatively affect any section of the country, he will voluntarily withdraw the bill.

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The Water Resources Bill was first introduced in the 8th Assembly but was rejected by the lawmakers. It was then reintroduced in the 9th Assembly but received backlash from a broad section of Nigerians and legislators who feared that it could endanger the unity of the country.

READ ALSO: Reps Probe Oil Spills At Three OMLs, Abandoned Oil Wells

The bill seeks to bring all water resources (surface and underground) and the banks of the water sources under the control of the Federal Government.

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It has been read for the first time and would be debated when it is scheduled for the second reading.

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