AEDC takeover: Parties agree to settle out of court

Plaintiffs in the controversial takeover of Abuja Electricity Distribution Company (AEDC) have resolved to settle the matter out of court.

Our correspondent reports that CEC Africa Investments Limited and KANN Utility Company Limited had sued the Attorney General of the Federation (AGF) and Central Bank of Nigeria (CBN) as 1st and 2nd defendants over the Federal Government’s directive for the company’s takeover.

Also joined in the suit, marked: FHC/ABJ/CS/1557/2021, dated and filed on Dec. 8, 2021, include the BPE, Ministry of Finance, AEDC, United Bank for Africa (UBA) and United Capital Trustees Limited as 3rd to 7th defendants respectively.

The plaintiffs had sought an order restraining the AGF, CBN, BPE and Ministry of Finance from interfering with the operations and management of AEDC.

They also sought an order, restraining the AGG, CBN, BPE and the Finance Ministry from taking any steps which may transfer or forfeit or reduce, or takeover the 60 per cent shareholding of the 2nd plaintiff in AEDC in any manner or limit the 2nd plaintiff ability to exercise its full rights over the shares pending the hearing and determination of the matter.

However at the resumed hearing before Justice Inyang Ekwo of a Federal High Court, Abuja, on Wednesday, counsel to the plaintiffs, Etigwe Uwa, SAN, informed the court that his clients were already taking steps to resolve the matter out of court.

The lawyers to the defendants, including Ahmed Raji. SAN; Wole Olanipekun, SAN; E. O. Sule, SAN; A.U. Mustapha, SAN; Harry Kaijiofor; Adedayo Adeyemo and O. Opasanya, who appeared on behalf of intervener applicants, all described the move as a welcome development.

Upon consensus of counsel, Justice Ekwo made an order, granting leave for the lawyers to settle out of court
He adjourned the matter until April 25 for report on the out-of-court settlement.

Our correspondent reports that Justice Ekwo had, on Dec. 10, 2021, ordered the parties to maintain status quo after counsel to the plaintiffs, Uwa, moved an ex-parte motion to the effect.

The judge also ordered that the defendants be put on notice of the processes filed in the suit within five days of making the order.

Uwa had, also, told the court in one of the sittings that despite the status quo order of the court, the premises of the AEDC (5th defendant) was invaded.

“We have filed an application of non-compliance with the status quo order,” he said.

But lawyers to all the defendants, including the 5th defendant, said they were not aware of such invasion.

It was reported that the BPE motion on notice was brought in accordance with Section 5 (1) & (2) of the Arbitration and Conciliation Act CAP A18 LFN, 2004, among others.

Some of the grounds for filing the motion are that “the plaintiffs, by the suit, are seeking to enforce certain provisions in the Share Sale Agreement and the Shareholders’ Agreement.

“That both agreements provide that all disputes between the parties shall first be referred to Arbitration for settlement.”

According to the motion, Clauses 15 .2 – 15.7 of the Share Sale Agreement provide that parties SHALL submit their disputes to Arbitration for settlement with the place of Arbitration being in London, England.

Again it states that “Clauses 16.3-16.7 of The Shareholders’ Agreement provide that parties SHALL submit their disputes to Arbitration for settlement with the place of Arbitration being in London, England.”

It stated further that “the alleged disputes herein sought to be litigated upon by the plaintiffs have not been referred to arbitration for an amicable resolution in line with the provisions of the Agreement”.

Section 5 (1) and (2) of the Arbitration Act Cap A18 LFN, 2004 provides that where parties had agreed or contracted to settle their disputes by arbitration and one of them heads straight to court, it is in breach of the agreement.

“It also states that the court is bound to stay proceedings thereof pending resolution or settlement of the matters/disputes by arbitration.”