Home NEWS Nigeria Loses $1.7bn Case Against JP Morgan

Nigeria Loses $1.7bn Case Against JP Morgan

by InlandTown Editor
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JP Morgan

The Nigerian Government has lost a $1.7 billion court case against American multinational investment bank, JP Morgan Chase & Co.

The case involved the transfer of proceeds from the sale of OPL 245 in the controversial Malabu oil deal. Sara Cockerill, the judge in charge of the case ruled on Tuesday that the Nigerian Government could not substantiate that it had been defrauded in the case.

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

The argument was that the transactions put JP Morgan in breach of its Quincecare duty. The Quincecare duty obliges banks to disregard a customer’s instructions if following those instructions might actually facilitate a fraud against that customer.

Roger Masefield, the lawyer representing Nigeria told the court that the evidence of fraud is little short of overwhelming. He added, “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.” However, he couldn’t convince the court.

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The Government argued throughout the trial that the bank acted carelessly when it transferred $875 million in payments from government accounts to Mr Etete, who had been convicted of money laundering between 2011 and 2013.

The court’s published ruling said,

“With the benefit of hindsight, JP Morgan would have done things differently. But again none of these things individually or collectively amount to triggering and then breaching its duty of care to its client.”

In a statement, a spokesman for the bank said,

“This judgment reflects our commitment to acting with high professional standards in every country we operate in, and how we are prepared to robustly defend our actions and reputation when they are called into question”

A government spokesperson said,

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

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