Contractors drag giant oil firm to court over alleged breach of contract agreement

The Opu-Nembe Surveillance Contractors have dragged the Aiteo Eastern Exploration and Production Company to a Bayelsa State High Court sitting in Nembe over alleged breach of contracts.

The matter was separately registered in suit numbers NHC/1/2020 to NHC/12/2020 chronologically.

The claimants, Mr Nicholas Ebiye and Johnson Theophilus and 10 others filed the suit over an alleged injustice and malicious punishment meted out against the Opu-Nembe Surveillance Contractors by Aiteo.

According to the information gathered by our correspondent, in 2015 Aiteo Eastern Exploration & Production Company limited awarded contracts to the Opu- Nembe Surveillance Contractors  for surveillance of its facilities within OML 29 with terms and conditions stated in the Contracts.

The Surveillance Contractors duly mobilized to site in the said year, diligently and effectively discharged the surveillance activities from that period till date except for three (3) contractors that were given Notice of Termination of Employment in the year 2019 ( without receiving their entitlements and salaries for the work performed).

Aiteo Eastern E & P Company allegedly partially discharged its obligation under the Contracts by paying part of the accrued monthly contract sum to the contractors but has refused to further discharge its obligation under the Contracts by its failure to defray the outstanding sum despite repeated demands.

The said Contracts have not been terminated because the contractors were not given any notice of termination as required under the Contracts and under the Nigerian Labour Law and the contractors have remained on site till date except the three contractors that received Notice of Termination of Employment from AITEO ( they have also not been paid for the work performed before their Contracts were terminated).

Due to the refusal of AITEO to defray the accrued monthly contract sum, we gathered that the contractors through their Solicitors wrote letters to AITEO requesting for the payment of the outstanding sum.

Yet, AITEO allegedly refused to defray the debt and did not respond to the letters written by both the contractors and their Solicitors. This mischievous act of AITEO is a fundamental breach of the Contracts and has impliedly breached the covenant of good faith and fair dealing in the Contracts. The Contractors were left with no other option than to approach Court for redress.

Hopefully, the contractors approached the Court to compel AITEO to defray the debt but AITEO through its counsel led by a Senior Advocate of Nigeria (S.A.N) raised a Preliminary Objection that the Contracts contain an arbitration clauses and urged the Court to stay proceedings and refer the case to arbitration.

The contractors’ counsel S. A. Ibrahim, Esq. of Ntephe, Smith & Wills in Port Harcourt countered the Preliminary Objection and submitted that from the circumstances of the case, AITEO has not shown sufficient reason why the matter should be referred to arbitration because of its failure to show its willingness to do all things necessary for the proper conduct of the arbitration.

 In the same vein, he maintained that the essence of arbitration clause is not to oust the jurisdiction of the Court but to allow parties settle their disputes amicably out of court if they so wish.

The Court in its ruling struck out the case and allowed the parties to go for arbitration. Unfortunately, as it is now the contractors may not likely get justice. This is because, arbitration procedure is highly expensive and the contractors have been exposed to huge costs in embarking on litigation, including legal fees, filing fees, attendance of court proceedings, others.

Presently, the alleged nonchalant attitude displayed by AITEO has caused and is causing a serious embarrassment to the contractors and their businesses as they are unable to meet their accumulating financial obligations to their financiers and dependants.

Similarly, the place of arbitration pursuant to the Contracts is Lagos.

Although the presiding Judge on the matter, Justice L. M Boufini had struck out the matter early this month for the parties to explore arbitration first, but the affected contractors are insisting that the  arbitration should be done within the state following the cost of traveling to Lagos for the case.

Efforts to reach the company through one of its relations officer, Ndiana on their next action proved abortive as all calls to him by our corrspondent were not responded.