Court Nullifies Ararume’s Removal As NNPCL Chairman, Awards N5bn Against Buhari

Court Nullifies Ararume’s Removal As NNPCL Chairman, Awards N5bn Against Buhari

Justice Inyang Ekwo of a Federal High Court in Abuja, yesterday, set aside the removal of Senator Ifeanyi Ararume as the Non-Executive Chairman of the Board of the Nigerian National Petroleum Company Limited (NNPC Ltd).

This was just as some industry analysts yesterday stressed that the stability of the NNPC should be top priority at this moment.

Justice Ekwo in a judgment held that Ararume’s removal by President Muhammadu Buhari contravened provisions of the NNPC Ltd laws as well as the Company’s and Allied Matters Act.

The judge consequently made an order reinstating Ararume as the Non-Executive Chairman of the NNPC Ltd Board with immediate effect.

Ararume had last year dragged Buhari to court over his removal as the Chairman of the Board of the NNPC Ltd.

Ararume had demanded a whopping sum of N100 billion as damages caused him due to the unlawful manner he was removed as Board Chairman after his name was used to incorporate the entity.

The president in a letter dated January 17, and signed by the Secretary to the Government of the Federation, had withdrawn Ararume’s appointment without any reason whatsoever, hence legal action was commenced by the former Imo State senator.

The suit marked FHC/ABJ/CS/691/2022 was instituted on his behalf by a group of Senior Advocates of Nigeria (SANs) comprising Chief Chris Uche, Ahmed Raji, Mahmud Magaji, Ogwu James Onoja, K.C Nwufor and Gordy Uche.

Delivering judgment in the suit after dismissing a total of seven applications against its hearing, Justice Ekwo held that the case of the plaintiff had merit and subsequently ruled in his favour.

According to the judge, the laws guiding the NNPC as well as the Petroleum Industry Act does not empower the President with powers to arbitrarily remove a director from the board of the NNPC, adding that with the new status of the NNPC under the Company’s and Allied Matters Act, NNPC is not a statutory agency under the federal government.

Furthermore, Ekwo held that Buhari was wrong when he went ahead to remove Ararume as Board Chairman without following the due process of the law.

According to the judge, before a member of the board of the NNPC including the non-Executive chairman can be removed from office; there must be a concrete allegation against him or her, the person must be confronted with the said allegation and provided with an opportunity to defend itself.

Ekwo dismissed the claim of the NNPC Ltd that Ararume was removed because he was not qualified, involved in contract fraud, amongst others, noting that no evidence of such was contained in the January 17 letter, for his withdrawal.

According to the judge the defense by NNPC was an exercise in futility at manufacturing reasons for Ararume’s removal.

The judge held that the removal of Ararume without fair hearing by the president was, “wrong and cannot be tolerated by a court of law”, adding that the, “plaintiff has proved his case, he was not legally and properly removed. I determine question 1 in the positive; 2 in the negative; 3 in the negative and 4 in the positive”.

Justice Ekwo also held that the plaintiff having proved his case was entitled to damages.

The court held that the president’s letter of January 17, without complying with the NNPC’s and CAMA laws, “is wrongful, illegal, null and void and of no consequence and is hereby set aside.

While the judge made an order reinstating the plaintiff back to office as non-Executive Chairman of the Board of the NNPC Ltd, another order was made nullifying all the actions and decisions made so far by the board without Ararume.

Justice Ekwo held that Ararume was entitled to damages over the unlawful manner he was removed and consequently awarded damages in the sum of N5 billion.

Ararume had in his suit, formulated four issues for determination by the court among which was whether in view of the provisions of the Memorandum and Articles of Association of the NNPC, Companies and Allied Matters Act 2010 and the Petroleum Industry Act 2021, the office of the non-Executive Chairman is not governed and regulated by the stated provisions of the law.

He had also asked the court to determine whether by the interpretation of Section 63 (3) of the Petroleum Industry Act 2021, the president could lawfully remove him as non-Executive Chairman of the NNPC for any reason outside the provisions of the law.

The Imo politician had also asked the court to determine whether Buhari could sack him without compliance with expressly stated provisions of the Articles of Memorandum of Association of the Company, section 63 (3) of the PIA Act 2021 and section 288 of the CAMA Act 2020.

Also listed for determination was whether his purported removal vide letter of January 17, 2022 without compliance with expressly stated provisions of the law is not wrongful, illegal, null and void and of no legal consequence whatsoever.

Upon the determination of the issues in his favour, the plaintiff had wanted the court to make declaration that his position as non-Executive Chairman of the NNPC was exclusively governed and regulated by CAMA 2020, PIA Act 2021 and Memorandum of Association of the Company.

He had also sought a declaration that by the provisions of section 63 (3) of the PIA Act, CAMA Act and Memorandum of Association of the NNPC, the President cannot by will remove him from office as non-Executive Chairman without following due process of the law.

He had requested for N100 billion as damages for the wrongful removal, disruption and interruption of his term of office as non-Executive Chairman of the NNPC.

Meanwhile, some industry analysts yesterday stressed that the stability of the NNPC should be top priority, following the court decision to reinstate Ararume.

Speaking on the matter, the Executive Director of Citizens Advocacy for Social & Economic Rights (CASER), Frank Tietie, said a prolonged court case may not be in the interest of the company, especially if the federal government decides to go on appeal.

He explained that it was important to allow the rule of law to prevail in the interest of the international obligations and transactions of the NNPC so as not to create trust deficit in its operations.

‘‘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,’’ he stressed.

He advised that the newly reinstated non-executive chairman of the board of the NNPC 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 impacted in the negative.

Also speaking, an Energy Finance Expert and former Senior Technical Adviser to Nigeria’s Minister of Petroleum Resources, Dan Kunle, said it was important for the government to always ensure that it allows the Companies and Allied Matters Act (CAMA) guide the rule of engagement for directors of limited liability companies.

Stressing that the federal government may decide to appeal the court ruling, he urged the authorities to always play by the rules.

He also advised that decrees should not be deployed in the setting up of boards of limited liability companies.

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