Mr Justice Akenhead accepted that the Nigerian Oil Pipelines Act provides a comprehensive and complete regime for compensation for oil spills. This decision limits the scope of the litigation to an assessment of actual damages sustained as a result of the operational spills. The Judge dismissed the attempts of the community’s UK legal representatives to add a range of additional claims over and above the compensation due under the clear Nigerian statutory regime.
The issue of liability for environmental damage caused by oil theft and criminality was also addressed. The Judge found that the Oil Pipelines Act does not hold pipeline operators responsible for damage caused by oil theft. He did identify rare, “theoretical” but “difficult to prove” exceptions, for example in the event a pipeline operator knew the time and location of a planned attack by criminals and decided not to inform the police. He also accepted that no compensation is payable for oil spilled as a result of illegal oil refining.
The Judge further recognised the significant jurisdictional problems that arise when claims relating to Nigerian land are brought in England rather than in the Nigerian courts that have jurisdiction in relation to such land. These issues will need to be addressed during the main trial next year.
Mutiu Sunmonu, Managing Director of the Shell Petroleum Development Company of Nigeria Ltd (SPDC), said: “From the outset, we’ve accepted responsibility for the two deeply regrettable operational spills in Bodo. We want to compensate fairly and quickly those who have been genuinely affected and to clean up all areas where oil has been spilled from our facilities, including the many parts of Bodo which have been severely impacted by oil theft, illegal refining and sabotage activities. We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers.”
He added: “We’ve consistently maintained that the Bodo community’s UK legal representatives have a fundamental misunderstanding of Nigerian law, and today, the Judge has agreed with us. It’s disappointing that we’ve had to go through this process, which has involved a significant amount of wasted time and legal expense.”