Inyang Ekwo, presiding judge of the Abuja federal high court ruled in a N100 billion suit filed by Ararume in which he challenged his replacement on the NNPCL board by President Muhammadu Buhari in January 2022. Buhari appointed Ararume, a former senator, as the non-executive chairman of the NNPC Limited but later suspended the appointment replacing him with Margret Chuba Okadigbo.
According to a Professor of Petroleum Economics, Omowumi Iledare, the judgement will not have any major effect on the economy of Nigeria or the oil industry because he didn’t see Ararume being reinstated. ‘‘I am not a lawyer but I believe the President has the power to appoint and fire. It is never unusual to nominate and withdraw a nomination. Looking at the Petroleum Industry Act, nomination has to be ratified by the Senate. I don’t think he can be reinstated.’’
Also, a professor of law and energy economics, Tayo Bello, said the economy of the nation will not be negatively affected by the court verdict. According to him, the federal government can appeal the judgement and a situation of status quo ante will be maintained.
President Muhammadu Buhari has sued for calm from all parties involved in the board chairmanship tussle of the Nigerian National Petroleum Company Limited, saying due process would take its course.
“The administration respects the Rule of Law, and nothing will be done outside it to resolve the matter. President Buhari has taken due notice of judgment by the Federal High Court, Abuja, restoring Senator Ararume as the non-executive Chairman of the NNPCL. While the Office of the Attorney-General of the Federation/Minister of Justice is yet to receive a formal copy of the ruling, the President affirms that due judicial process will be followed, and NNPCL has already taken steps to go on appeal. The administration respects the Rule of Law, and nothing will be done outside it to resolve the matter, the President says. He sues for calm from all sides involved,” a statement signed by his spokesman, Femi Adesina, read on Wednesday.
However, energy expert, Debo Fagbemi, said the verdict is victory for the PIA as it has shown that it is no longer business as usual. He said the development has also revealed the possibility of the NNPCL achieving its objectives since it will now be governed by CAMA law. He said the reinstatement of Araraume is a positive one for the economy and the oil industry.
Chief executive officer of the Center For The Promotion Of Private Enterprise (CPPE), Muda Yusuf, has also cautioned that the court verdict has the potential to disrupt major investment decisions.
Yusuf, who is also a former director general of the Lagos Chamber of Commerce and Industry (LCCI), argued that the development may erode investors’ confidence who, he said, may see the NNPCL structure as unstable.
He said the reinstated chairman of the board could decide to work on the probability that NNPCL has not been fully subjected to operate as a commercial entity which some stakeholders had suggested should be quoted on the stock exchange locally and internationally.
“You know that the NNPCL is now a CAMA company and it is expected to operate with minimal political interference,” Yusuf said.
“There is a high level of corporate governance compliance expectations and the NNPCL is expected to operate within the framework of the Petroleum Industry Act, PIA.”
While reacting to the court ruling, Johnson Chukwu, chief executive officer at Cowry Asset Management Limited, contend that the verdict may not totally affect investment decisions made in the past, noting that the federal high court is just a court of first instance and that the federal government has the right to appeal the judgement.
Chukwu said the NNPCL is purely operating as a commercial entity under the new law and cannot be subjected to political interference.
On his part, Frank Tietie, a lawyer and executive director of Citizens Advocacy for Social & Economic Rights (CASER), a civil society group promoting human rights and better living standards for citizens of Nigeria, said the federal government should not appeal the judgement in the interest of the company.
“It is important to allow the standard of the rule of law to prevail in the interest of the international obligations and transactions of the NNPCL so as not to create a trust deficit in its operations,” Tietie said.
“The judgement of a court is presumed to be obeyed by all parties until it is set aside. In the absence of any stay of execution, the judgement must be obeyed.’
“For the sake of the stability of the company, the newly reinstated non-executive chairman of the board of the NNPCL may decide to ratify decisions of the board since his removal so as not to create a situation where the operations of the company would be affected negatively.”
Meanwhile, Abdul Balogun, a senior advocate of Nigeria (SAN), noted that the government has no choice but to obey the judgement of the court, unless it decides to appeal it.
“Not obeying the judgement will send the wrong signal to the international business community,” Balogun cautioned.
“If the government feels it has a strong case, it can appeal the judgement up to the Supreme Court. But not obeying the judgement of the court is dangerous for the image of the country because it will send a wrong signal to the international business community. The government can’t afford not to obey the judgement, if it hopes to win investors’ confidence in the judicial system.”
Fidelis Amobi, a constitutional lawyer, said the judgement will have a far-reaching effects on the operations of the company, noting that a political solution is necessary.
“Despite Ararume winning his case in court, I think a political solution should be deployed to resolve the situation that has been created by the judgement of the court. Otherwise, the government may not be able to manage the situation,” he said.
