JPMorgan Chase & Co. asked a London court to dismiss a lawsuit brought by the Nigerian government that accuses the bank of failing to prevent $875 million in corrupt payments.
The lender said it got the correct approvals from Nigerian officials before transferring the funds to accounts controlled by a former oil minister who’s been convicted of money laundering, and that the government’s claim has no real prospect of success. After settling a controversial oil deal in 2011, the money was sent to Malabu Oil & Gas Ltd., a firm controlled by Dan Etete.
The bank “had no duty to inquire into or investigate the validity or legality of the instructions it received,” Rosalind Phelps, a lawyer for JPMorgan, said in court. “The only allegation that’s left is one of negligence.”
Nigeria said in its submissions to court that JPMorgan was “on notice” and that the bank faced several “red flags” that should have caused it to block the payments. The contracts to explore the deep offshore waters of the Gulf of Guinea were tainted by corruption, Nigeria says.
The country has separately sued Royal Dutch Shell Plc and Eni SpA, which put more than $1.1 billion for the license into an escrow account. Some of that money, Nigeria alleges, was diverted for use as bribes and kickbacks.
Shell and Eni have previously denied any wrongdoing in an Italian criminal case over the block, called OPL 245. The companies said they made the payment into a legitimate government account to settle legal claims related to the block.
Nigeria alleges that the fraud reached the highest levels of the government of then-President Goodluck Jonathan — who has himself denied wrongdoing. The bank should have realized it couldn’t trust the senior officials from whom it took the instructions, Nigeria has said.
The case is Federal Republic of Nigeria v JPMorgan Chase Bank NA, High Court of Justice, Claim No. CL-2017-000730.