Of Araraume and the tenure of NNPCL chieftains

Sufuyan Ojeifo


But for an international conference that engaged Justice Inyang Ekwo outside the country on March 28, this year, and made it impossible for him to give his judgment in the suit by Senator Ifeanyi Godwin Araraume against President Muhammadu Buhari and two others in which, as the plaintiff, he (Araraume) challenged his alleged illegal removal as non-executive chairman of the Board of Directors of the Nigerian National Petroleum Company Limited (NNPCL) by the first defendant (Buhari), the legality or otherwise of that presidential action would have since then been decided.

The inadvertent postponement somewhat dilated the judgment delivery by three weeks. Ekwo has now given judgment in the suit. On Tuesday, April 18, 2023, he voided the presidential action that suddenly removed Araraume from office on January 17, 2022, about three months after he was appointed, saying it was wrongful, illegal, null and void, and of no legal consequence because the removal did not follow the procedures provided for in the extant laws.

Read the consequential orders made by Justice Ekwo hereunder reproduced in extenso: “A declaration is hereby made that the office and position of the Plaintiff as non-executive chairman of the 2nd defendant (NNPCL) are exclusively governed and regulated by the Companies and Allied Matters Act 2020, the Petroleum Industry Act 2021, and the Memorandum and Articles of Association of the 2nd defendant.

“A declaration is hereby made that by the provisions of Section 63(3) of the Petroleum Industry Act 2021, the 1st defendant cannot lawfully remove the plaintiff as the non-executive chairman of the 2nd defendant for any reason(s) whatsoever outside the conditions specifically listed in the said Section 63(3) of the Petroleum Industry Act 2021.

“A declaration is hereby made that by the combined provisions of Articles 21.3, 21.4 and 24 of the Articles of Association of the 2nd defendant, Section 63(3) of the Petroleum Industry Act 2021 and Section 288 of the Companies and Allied Matters Act 2020, the plaintiff cannot be removed from office as the non-executive chairman of the 2nd defendant at will by the 1st defendant, without compliance with due process of the law.

“A declaration is hereby made that the removal of the plaintiff from office as the non-executive chairman of the 2nd defendant by virtue of the 1st defendant’s letter dated the 17th January 2022 with reference No: SGF 3/VIII/86 without complying with the strict provisions of Articles 21.3 and 21.4 of the Articles of Association of the 2nd defendant, Section 63(3) of the Petroleum Industry Act 2021 and Section 288 of the Companies and Allied Matters Act 2020, is wrongful, illegal, null, void and of no legal consequence whatsoever.

“An order is hereby made setting aside the removal of the Plaintiff as the non-executive chairman of the 2nd defendant vide the 1st defendant’s letter dated the 17th of January 2022 with reference No: SG. 3/VIII/86.

“An order is hereby made reinstating the plaintiff forthwith and restoring him to his office with all the appurtenant rights and privileges of his office as the non-executive chairman of the 2nd defendant.

“And order is hereby made nullifying and setting aside all decisions and resolutions of the board of the 2nd defendant made in the absence of the plaintiff from 17th January 2022 till date.

“An order is hereby made restraining the defendants from removing the name of the plaintiff as a director of the 2nd defendant as contained in the Memorandum and Articles of Association, the Status Report and any or all other such documents of the 2nd defendant kept in the records of the Corporate Affairs Commission, the 3rd defendant.

“The sum of N5,000,000,000 (Five billion Naira) being damages for the wrongful removal, disruption and interruption of the term of office of the plaintiff as the non-executive chairman of the 2nd defendant.”

The fact that Justice Ekwo was clinical and balanced in his judgment-having first ruled on seven preliminary objections that sought to truncate the originating summons, all in favour of the plaintiff, before proceeding to the judgment- remains writ large. The ratio decidendi and the orbiter dicta all jelled together to strengthen the basis of his verdict.

Regardless, the defendants have yet to come to the end of the road. They have the right of appeal to the court upstairs. In fact, Presidential spokesperson, Femi Adesina, was reported to have said that the President had directed the Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN) to take necessary steps to appeal the judgment.

Once that is done, it will mark the start of another legal voyage. The panel of justices will rule on the appeal at the appropriate time, one way or another. Either of the parties can then proceed to the Supreme Court consequent upon the judgment of the Court of Appeal, whose assignment is essentially to review the records of proceedings from the court below.

The applicability and correctness of the provisions of the extant laws cited in the adjudication of the matter will be looked into. But it is clear that Justice Ekwo kept fidelity with his avowal during the hearing to uphold the duty of the Court in expounding and not expanding the law. The Court of Appeal, which is a policy court, will determine if he substantially did that.

Now, the essential leitmotif of this editorial intervention interrogates the implications (not necessarily the rationale behind the resort to litigation over a matter that could ordinarily have been seamlessly resolved through administrative actions) of the court case for Nigeria’s oil industry management in the perception of the international community.

It sadly helps to shape and/or give the impression of uncertainty, arising from violation of the law and instability, to boot, in the oil industry especially if the International Oil Companies (IOCs) have been made to believe that the extant laws governing the operations of the oil industry get easily vitiated and outrightly discounted by the powers that be.

This is one concern that ramifies the entire context of the Araraume-Buhari NNPCL “removal-reinstatement” saga. The saga exemplifies the failure of government to ensure continuous due diligence at appropriate intersections as a prerequisite for an administrative decision that was as critical as an appointment into and removal from the Board of the NNPCL- a new face of the nation’s iconic brand in the sensitive oil industry, evidently drawing its gravitas from the new Petroleum Industry Act (PIA): the administration had all the time to cross the t’s and dot the i’s before announcing the appointment(s). Araraume’s appointment was a product of that due diligence. He was cleared by the security agencies (both the Police and the Department of State Services) for the job. In fact, that was not the first time he would pass security checks. He did in 2016 when he was appointed by President Buhari as a Federal Commissioner (representing the Southeast zone) at the Nigerian Communications Commission (NCC), a position from which he resigned in 2018 to contest for the governorship of Imo State. But the subsequent action of reviewing his appointment as non-executive chairman of the NNPCL, which the court has declared as illegal, shows that the presidency buckled, perhaps, under the tension of political goals and objectives, to commit that mischief through the post hoc review of the appointment. That action clearly smacked of impunity and executive rascality. Was the President wrongly advised to take that action? I strongly believe so.

Indeed, the point I make here with all due respect is that the presidency should have, for the sake of stability of government policy decisions and the imperativeness of keeping fidelity to the same, brushed aside unconscionable political considerations, which forced that review and foisted a legal tomahawk on the President and Commander-in-Chief of the Federal Republic of Nigeria. The litigation has done much harm than good to the image of the country, especially against the background of the perceived air of freedom by government officials to act against the grains of rules or regulations and laws that circumscribe the operations of statutory bodies, which freedom, to so rashly act, was wrongly extended to the domains of the NNPCL, a full CAMA company limited by shares.

I therefore expect that the presidency would quickly take steps to ensure that sanity returns to the ecosystem of our oil industry for a seamless management that finds vast anchorage on extant laws, especially the PIA. The PIA is the most significant piece of legislation yet to reinforce the legal basis that undergirds the existence and functionality of the NNPCL. The PIA 2021 created the NNPCL and made certain provisions relating to governance, administration and the appointment of a chief executive officer, a chief financial officer and board of directors by the President and Commander-in-Chief of the Federal Republic of Nigeria. Once the President makes the appointment, he becomes functus officio. Removal of board members is vested in the Board.

The PIA exists to mediate in the operations of the NNPCL and the oil sector. It carries in it the magnitude of the essential elements that are necessary for a game-changing national energy company and stable oil ecosystem that are poised to be utilitarian in benefitting members of the various publics. Perhaps, if that had been emplaced in the process of understanding the ramifications of administrative actions arising from the provisions contained therein, there would have been some restraint on the side of the government in whimsically reviewing and suddenly determining the appointment of Araraume as non-executive chairman of the Board of the NNPCL.

It is important to review the saga so that a similar situation does not happen whether now or in the foreseeable future. This brings me to yet another theme of this intervention, which verges on the transition of the former Group managing Director of the defunct Nigerian National Petroleum Corporation (NNPC), Mele Kyari, to the Chief Executive Officer (CEO) of the new NNPCL; and, the same thing for the former Group Executive Director (Finance and Accounts) of the old corporation, Mr Umar Ajiya, who is now the Chief Financial Officer (CFO) of the NNPCL. Those transitions as endorsed by the federal government and enforced by the NNPCL were in pari materia with the provisions of the PIA.

What this means in essence is that an era had ended with the old order-NNPC. The NNPCL signification marks the beginning of a new era. The fact of a change in nomenclature, the existence of a statute that provides for its operations and the new designations for Kyari and Ajiya indicate that the NNPCL is now a full “CAMA company” that draws guidance and inspiration from the Companies and Allied Matters Act (CAMA) and the PIA, under the overall superintendence of the relevant provisions of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).

It is thus apposite at this intersection to underscore the fact that the positions of NNPCL CEO and CFO are tenured. The appointments, in this instance, which are not career postings, are on the basis of distinct terms and conditions of service including, for emphasis, tenure, employment benefits and termination.

In a statement by the NNPCL penultimate week week, reference was made to Section 59(3) of the PIA 2021, which stipulates the conditions for appointing the CEO and CFO without giving consideration to previous employment ranks in the old corporation.

What this means is that Kyari and Ajiya are on a new journey at the NNPCL to sustain the provision of institutional memory-enabled leadership for a tenure of five years each with effect from September 16, 2021. Expectedly, their tenures should expire on September 16, 2026; and, that is all things being equal. The duo had retired from the old NNPC to take up the tenured appointments in the new NNPCL for strategic administrative reasons, among which is a seamless provision of institutional memory-enabled leadership as stated earlier.

The controversy in the media over the transition of the duo would not have happened if the government had properly communicated the development to the various publics. It is not just enough to assume that the statute was clear to address people’s confusion and misconception, the government should have driven some conversations around it in a deliberate bid to lucidly communicate the administrative decision or action.

Afterall, this is about the “NNPC-NNPCL.” If this laissez faire attitude is in the character of the outgoing administration, it is expected that the incoming administration will do well to correct that and ensure that it engages with Nigerians in the running of the NNPCL in accordance with the statute that has established it. The positions of CEO and CFO are tenured. If there are reasons, for instance, to determine the appointments of Kyari and Ajiya, that power is ipso facto vested in the board and the process must align with the provisions of the PIA and other relevant extant laws so as to forestall a repeat of the Araraume-Buhari litigation saga, which has not boded well for our oil industry in terms of IOCs’ confidence in the management and stability of policy decisions and measures in the sector.

▪︎Ojeifo contributed this piece from Abuja via ojwonderngr@yahoo.com

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