FCT HIGH COURT NULLIFIES ICC ARBITRATION IN SHELL-AITEO OIL BLOCK DISPUTE

The High Court of the Federal Capital Territory (FCT), Abuja, has declared ongoing arbitration proceedings instituted by Shell and its consortium of lenders at the International Chamber of Commerce (ICC) in London as null and void, in a significant judicial pronouncement affirming Nigeria’s legal sovereignty over transnational commercial disputes.
Delivering judgment on Tuesday, July 8th, Justice S.B. Belgore strongly criticized the continuation of the arbitration, calling it a “brazen affront to the authority of Nigerian courts.” The ruling is the latest twist in the complex legal tussle over the $3.01 billion acquisition of Oil Mining Lease 29 (OML 29) by Aiteo Eastern Exploration and Production Company Limited.
At the center of the storm is Tempo Energy Nigeria Ltd., a minority equity stakeholder in the 2015 transaction, which filed suit in 2021 under suit number FCT/HC/CV/079/2021, alleging exclusion from legal and arbitration processes in which it had significant interests. The FCT High Court had issued interim injunctions in January 2021 restraining all parties—including Shell Western Supply & Trading, Shell International Trading & Shipping, the African Finance Corporation (AFC), and several Nigerian banks—from pursuing arbitration abroad.
Nevertheless, the ICC arbitration reportedly continued in defiance of the Nigerian court orders throughout 2024. On April 30, 2025, the Court of Appeal upheld the lower court’s interim injunctions and awarded ₦1.5 million in costs, describing the appellants’ conduct as “an abuse of court process.”
The renewed judgment, delivered on July 8, affirms that any such arbitration proceedings initiated and maintained while under Nigerian judicial restraint are invalid under Nigerian law. Justice Belgore emphasized that the actions of the claimants amounted to a deliberate circumvention of Nigerian judicial authority, with grave implications for the rule of law and commercial order within Nigeria.
Legal counsel for Tempo Energy, Kehinde Ogunwumiju (SAN), had urged the court during May 2025 hearings to strike out the arbitration in its entirety and uphold the supremacy of local jurisdiction in a transaction that involves core national assets and Nigerian financial institutions.
The case has now been adjourned to September 29, 2025, for further hearings on consolidated interlocutory applications, including motions related to damages, contempt proceedings, and enforcement measures.
Analysts suggest the ruling could have far-reaching implications for international oil companies and financial institutions engaging in cross-border deals involving Nigerian resources, especially where Nigerian court orders have been issued.
The judgment not only reasserts Nigerian courts’ jurisdiction over disputes involving domestic interests but could also test the enforceability of international arbitration clauses in contracts signed under Nigerian law.