Court orders Shell to pay N4b to five Imo communities

Shell-logoA FEDERAL High Court in Port Harcourt has awarded N4 billion as general damages against Shell Petroleum Development Company (SPDC), in favour of five communities in Imo State for a crude oil spill that occurred in 1997.

A Shell pipeline which ruptured along the Egbema-Assa delivery line, had large volume of crude oil beneath the surface until the soil became saturated, and with rising water levels, oil was carried to the surface, destroying swamps, streams, forest of Umudike, Alimiri Umudike, Ekpe Agah, Ukpazizi Ekpe Mbede and Etekuru  communities in Imo State.

Based on this, the communities led by Chief Sylvester Onyema Esiegwu (Eze-Ali Umudike-Egbema), 11 other chiefs on behalf of the communities, through their counsel , Mr. Lucius Nwosu (SAN)  filed a suit No.FHC/PH/CS/159/2002, to demand special damages in the sum of N5,408,000.000 as compensation for immediate direct losses to their means of livelihood as assessed by their expert chartered Valuation Surveyors and itemised in their report.

Prior to the suit, a N900 million ex-gratia was made  by Shell to the communities, for which they were compelled to sign an undertaking that the full and final settlement for the oil spill had been made.

Justice Gladys Olotu in her judgement, observed that looking at the documents presented by Shell in relation to the agreement, one might be tempted to agree with Shell.

But she stressed that by doing so, the course of justice will not be served.

And based on the fact that the word ex-gratia means favour  and not right, Justice Olotu said the agreement with the communities cannot act as estoppel on their rights to claim adequate compensation.

While looking at the claims for the sum of N5.4 billion in special damages as compensation for the immediate direct losses to their means of livelihood as assessed by their experts, chartered valuation surveyors, the Judge declined to grant this based that it was not pleaded by the plaintiffs as required by law.

Instead, Justice Olotu ordered Shell to pay the sum of N4 billion as general damages for the indirect economic losses and negative environmental impact the communities suffered, including loss of objects of reverence, totems, historical land marks, air quality and associated fear and forced refugee status.

The court also granted the plaintiffs’ requested remediate of the communities’ environment to the pre-impact status. In addition, a perpetual injunction restraining Shell from causing such pollution in the future was slammed on the company.

Shell had in a bid to determine the cause of the spill which occurred on April 29, 1997, constituted a tripartite investigation team made up of 11 persons, five of whom were on its staff, one from the Department of Petroleum Resources, as well four persons from the communities.

In a report which Shell tendered in court as Exhibit 5, it was noted that the spillage incident was as a result of an external corrosion on the pipeline. In course of the trial, Shell presented an amended statement of defence, alleging that the spill was caused by sabotage.

But Nwosu had argued that a graphic examination of the point of rupture and the depth of the pipeline (buried seven metres) will show the impossibility of a saboteur accessing the point to punch the hole standing atop the buried pipeline from the earth’s surface above.

“From the graphic illustration attached, possibility is zero that a saboteur standing on the surface of the earth, using a punch can achieve a punch on the pipeline at an impossible angle such as the 4 o’clock position instead of the 12 o’clock or at the worst 2 o’clock position” he said.

The communities accused Shell of negligence, for failing to realise that the steel pipelines it buried underground in a tropical rain format environment is susceptible to rapid corrosion.

They also told the court that Shell ought to have reasonably forearmed that given the near stream and swamp topography under which the pipeline was laid, the natural tendency in the event of  a spill will be unrestricted spill into the streams, the flood plains and flat lands characteristic of the Niger Delta and the service stream prevalent in the plaintiffs’ environment.

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Court orders Shell to pay N4b to five Imo communities

Shell-logoA FEDERAL High Court in Port Harcourt has awarded N4 billion as general damages against Shell Petroleum Development Company (SPDC), in favour of five communities in Imo State for a crude oil spill that occurred in 1997.

A Shell pipeline which ruptured along the Egbema-Assa delivery line, had large volume of crude oil beneath the surface until the soil became saturated, and with rising water levels, oil was carried to the surface, destroying swamps, streams, forest of Umudike, Alimiri Umudike, Ekpe Agah, Ukpazizi Ekpe Mbede and Etekuru  communities in Imo State.

Based on this, the communities led by Chief Sylvester Onyema Esiegwu (Eze-Ali Umudike-Egbema), 11 other chiefs on behalf of the communities, through their counsel , Mr. Lucius Nwosu (SAN)  filed a suit No.FHC/PH/CS/159/2002, to demand special damages in the sum of N5,408,000.000 as compensation for immediate direct losses to their means of livelihood as assessed by their expert chartered Valuation Surveyors and itemised in their report.

Prior to the suit, a N900 million ex-gratia was made  by Shell to the communities, for which they were compelled to sign an undertaking that the full and final settlement for the oil spill had been made.

Justice Gladys Olotu in her judgement, observed that looking at the documents presented by Shell in relation to the agreement, one might be tempted to agree with Shell.

But she stressed that by doing so, the course of justice will not be served.

And based on the fact that the word ex-gratia means favour  and not right, Justice Olotu said the agreement with the communities cannot act as estoppel on their rights to claim adequate compensation.

While looking at the claims for the sum of N5.4 billion in special damages as compensation for the immediate direct losses to their means of livelihood as assessed by their experts, chartered valuation surveyors, the Judge declined to grant this based that it was not pleaded by the plaintiffs as required by law.

Instead, Justice Olotu ordered Shell to pay the sum of N4 billion as general damages for the indirect economic losses and negative environmental impact the communities suffered, including loss of objects of reverence, totems, historical land marks, air quality and associated fear and forced refugee status.

The court also granted the plaintiffs’ requested remediate of the communities’ environment to the pre-impact status. In addition, a perpetual injunction restraining Shell from causing such pollution in the future was slammed on the company.

Shell had in a bid to determine the cause of the spill which occurred on April 29, 1997, constituted a tripartite investigation team made up of 11 persons, five of whom were on its staff, one from the Department of Petroleum Resources, as well four persons from the communities.

In a report which Shell tendered in court as Exhibit 5, it was noted that the spillage incident was as a result of an external corrosion on the pipeline. In course of the trial, Shell presented an amended statement of defence, alleging that the spill was caused by sabotage.

But Nwosu had argued that a graphic examination of the point of rupture and the depth of the pipeline (buried seven metres) will show the impossibility of a saboteur accessing the point to punch the hole standing atop the buried pipeline from the earth’s surface above.

“From the graphic illustration attached, possibility is zero that a saboteur standing on the surface of the earth, using a punch can achieve a punch on the pipeline at an impossible angle such as the 4 o’clock position instead of the 12 o’clock or at the worst 2 o’clock position” he said.

The communities accused Shell of negligence, for failing to realise that the steel pipelines it buried underground in a tropical rain format environment is susceptible to rapid corrosion.

They also told the court that Shell ought to have reasonably forearmed that given the near stream and swamp topography under which the pipeline was laid, the natural tendency in the event of  a spill will be unrestricted spill into the streams, the flood plains and flat lands characteristic of the Niger Delta and the service stream prevalent in the plaintiffs’ environment.

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