Energy Venture Partners Ltd v Malabu Oil and Gas Ltd

an exclusive mandate and agency to seek to procure up to three potential

during which to allow potential buyers of the OPL Assets to investigate the OPL

direct access to all such information, and documents relating to the OPL Assets as we have requested or may request including certain information, documents and

Assisting you in the sourcing for a new investor/acquirer/buyer (being a

Assisting in negotiations generally in so far as we are able or in connection

In so far as we are able, assisting your advisers in the legal structuring and

Supporting you (in so far as we are able) in your relations with Governmental

we shall also be entitled to retain as our fee and payment for procuring the

you are and shall not under any circumstances be entitled to any sums or

EXCLUSIVITY

In consideration of our entering into this Agreement and the obligations

advertise the OPL Assets for sale through any medium;

sell or otherwise dispose or seek to dispose of the whole of the OPL

continue or enter into any or further discussions or negotiations with

grant to any third party (other than pursuant to this Agreement)

withdraw from any introductions made by us or negotiations

enter into or continue, facilitate or encourage, any discussions or

enter into any agreement or arrangement with any other party

withdraw from negotiations with us or any third party introduced

do or omit to do anything which frustrates the ability to dispose of

and shall procure that none of our employees, agents, directors or

If at any time you are in breach of any of your obligations contained in this

ACKNOWLEDGEMENTS AND UNDERTAKINGS

You undertake and confirm that neither you nor any of your advisers

You acknowledge that we have incurred costs to date and will continue to

……..

You agree at all times that both parties (subject to our respective separate

You confirm that you are duly authorized and empowered to act as Principal in the following transaction. Further, you undertake to us (and for the benefit of any acquirer, we approach on your behalf) that you have all right and title in respect of the OPL Assets and shall in any event be entitled without restriction to procure the transfer of (all beneficial and legal rights) the OPL Assets to an acquirer free of encumbrances. You acknowledge that we are acting on the basis of the exclusive mandate as a broker and agent with no liability whatsoever in respect of the OPL Assets or in respect of any buyer of the OPL Assets. For the avoidance of doubt, by this Agreement you appoint us your sole and exclusive agent during the Exclusivity Period for the disposal of the OPL Assets with authority to negotiate with the three prospective buyers of the OPL Assets in respect of the purchase price and approval of transaction documentation.

OUR AGENCY AND TRANSACTION RIGHTS

That you are and/or will be satisfied with the Agreed Malabou Price and will

That as we shall not receive any costs and expenses, other payment or

We shall be entitled to and shall fully retain (without accounting to you) any

We shall during the Exclusivity Period and following determination of the

We shall be entitled to and are hereby expressly authorised by you in the

You agree to produce and allow us and any buyer/investor, and the our

No sale agreement shall be entered into between you and any buyer

We shall have no responsibility or liability whatsoever to you or the buyer of

For the avoidance of doubt, we will not be liable to you or any third party

We shall at our option and sale discretion instruct the buyer of the OPL

Pay to us the entire purchase price (including any excess over the Agreed

Make separate transfers or payments reflecting the relevant Agreed

INDEMNITY AND NON-CIRCUMVENTION

You undertake, represent and warrant to us that you shall not in any

You will reimburse us all and indemnify us and keep us indemnified against

Any sums due under this Agreement and unpaid shall be recoverable as a

Counterparts: This Agreement may be executed in any number of

Entire Agreement: This Agreement (and the Adendum) constitutes the

Time of the Essence: Time shall be of the essence of this Agreement, both

Further assurance: At any time after the date of this Agreement you agree

Severance: If a term in or provision of this Agreement is held to be illegal or

Waiver/Liability: No single or partial exercise, or failure or delay in exercising

Assignment: You shall not at any time, assign, transfer, create a trust over or

Survival: Any provision intended to or capable of surviving termination of

GOVERNING LAW

On 4 February 2010, a dinner took place at the Principe di Savoia Hotel, in Milan. The dinner had been arranged by Mr Obi. The dinner was attended by Mr Obi, Mr Agaev, Chief Etete and Mr Descalzi. It was the first and only occasion on which Chief Etete met Mr Descalzi, the Chief Operating Officer of ENI. There were no negotiations at the dinner. I accept Mr Obi's account that the purpose of the dinner was for the main personalities to meet and obtain a sense of the seriousness of each other’s intentions. Chief Etete recalled attending the dinner, but did not remember the date.

The dinner's importance in relation to the issues which I have to decide is as follows. In his evidence, Chief Etete sought to denigrate Mr Obi's role at this dinner; he suggested that Mr Obi was seeking to show he was “in” with ENI and was "fawning" on its representatives. I find that, on the contrary, that the dinner showed to the Chief precisely what Mr Obi's connections were able to achieve for Malabu. I accept Mr Obi's evidence that this was a significant advance for Malabu; Chief Etete was meeting, for the first time, a senior officer of ENI. In the previous four years Chief Etete had not succeeded in meeting such a senior representative of an international oil company. Moreover, if Chief Etete’s fraud and conspiracy theory had been correct, it was perhaps surprising that, at the dinner, no mention was made, even according to Chief Etete, about the proposed plan and the need to involve EVP. According to Chief Etete, Mr Descalzi was a prominent player in the alleged fraudulent conspiracy.

Chief Etete gave evidence to the effect that, in the light of the timetable set out in the 1 February letter, he was expecting things to move quickly on the transaction and that he was disappointed by the lack of progress following this meeting. On 18 February 2010 he wrote a letter addressed to EVP, for the attention of Mr Obi, which was copied to Mr Agaev and Mr Granier-Deferre. Chief Etete claimed that it was couriered to Mr Teimour Agaev (Mr Agaev's son) for onward transmission to EVP. I find as a fact that the letter was received by Mr Agaev senior on 20 February 2010 by fax and that he decided not to pass it on to Mr Obi, because it was very confusing and he did not want the latter to stop his work and his communications with ENI. In this respect, I accept Mr Agaev's hearsay evidence in the ILC Arbitration. I likewise accept Mr Obi's evidence, which is supported by Mr Agaev's evidence, that he did not receive the letter until it was handed to him at the meeting with Chief Etete on 6 March 2010 in Milan, to which I refer below. I do not accept that any of the matters set out in paragraph 319 of Malabu's written closing submissions establishes the contrary.

The letter was in the following terms:

“May we refer to the agreement signed and entered into between your goodselves (Energy Venture Partners) and our Malabu Oil & Gas Ltd, dated in one hand and International Legal Consulting Ltd of Cyprus all on the 15^th December 2009 respectively.

It was agreed with clear understanding that after the execution of all the agreements by all the parties, the following commitments will take place within a reasonable time frame:

a)

An irrevocable letter of intent from the Ultimate Final Investor and

b)

The payment of USD 100,000,000= (One Hundred Million US Dollars) as non-refundable in favour of Malabu Oil & Gas

These commitments from the investor are key to the success of the above agreements. You may recall that Malabu has made her position clear before now.

Exclusivity Period: Malabu Oil & Gas Ltd accepts to give Energy Venture Partners 3 Months form the 15^th of December 2009 based on full acceptance and understanding that the investor will make good on their commitments to Malabu. We have since exceeded Two Months into the 3 Month ‘Exclusivity’ period. Unfortunately none of these commitments have been made.

Notice: Malabu Oil & Gas Ltd hereby gives both International Legal Consulting Ltd, Energy Venture Partner and the Ultimate investor-ENI-Italy 2 Weeks from today’s date 18/2/2010 to issue the Irrevocable Letter of Intent and pay US 100,000,000 (One Hundred Million) Dollars in favour of Malabu Oil & Gas Ltd on or before the 04/03/2010.

If the above commitments are not met by the end of the 2 Weeks, Malabu Oil & Gas Ltd will cancel, revoke, withdraw from all legal obligations, engagements with all parties involved in this OPL 245 transaction and these engagements/agreements become null and void.

Malabu Oil & Gas Ltd also gives 30 days notice to withdraw all legal engagements to Energy Venture Partners and International Legal Consulting Ltd from the 04/03/2010.”

As Mr Agaev described, this letter was, in the light of the terms of the EVP Exclusivity Agreement, and the introduction of ENI, confusing and irrational. I accept Mr Howard's submission, that, in addition to being incoherent in a number of respects, there were in particular the following peculiar aspects:

So far as the first of the last two requirements was concerned, it was clear that Malabu had no entitlement to impose such requirements contractually or to terminate the mandate on the basis that they were not complied with. So far as notice was concerned, there was no right to give 30 days notice from 4 March 2010. The earliest date on which the agreement could have ended was arguably 27 April; it could not have ended on 3 April, as the letter envisaged.

It appeared clear from other evidence (see for example a letter purportedly dated 24 February 2010 that was said to have been sent by Chief Etete to Mr Richard Granier-Deferre), that Chief Etete's purpose in writing this letter was an attempt, by imposing unrealistic conditions that could not be met, to cut out ILC and EVP, to bring about a result whereby Malabu was engaged in direct negotiations with ENI and, by such means, avoid Malabu’s large fee exposure to ILC and EVP.

On 24 February 2010 EVP and NAE entered into a Confidentiality Agreement ("the Confidentiality Agreement") in relation to the information which EVP was going to provide to ENI/NAE for the purposes of the latter's giving consideration to the making of an offer. In so far as is material, the Confidentiality Agreement provided as follows:

“Clause 1: In connection with the potential divestment of certain assets in Malabou, specifically an interest in License OPL245, offshore Nigeria, (referred to herein as the “Transaction", EVP (referred to as the "Disclosing Party") in furtherance of specific instructions received from Malabou to such effect and included in the contractual agreement dated January 27, 2010 between Malabou and EVP (EVP Mandate), is willing, in accordance with the terms and conditions of this Agreement, to disclose to the Receiving Party, certain confidential information relating to the Transaction…

Clause 11. Without the prior written consent of the Disclosing Party, the Receiving Party shall not make contact with any employee, customer, supplier or agent of Malabou or any of their affiliates with regard to the Transaction until expiry or termination of the EVP Mandate. The Receiving Party hereby undertakes, represents and warrants to the Disclosing Party that they shall not in any manner, directly or indirectly circumvent or seek to circumvent the operation of this Agreement or otherwise deprive or seek to deprive the Disclosing Party or Malabou of any of its benefits or protections intended pursuant to this Agreement. Further to at all times to act in good faith in respect of this Agreement. The parties acknowledge and agree that the Disclosing Party is “acting on behalf” of Malabou and shall in no circumstances have any liability whatsoever to the Receiving Party or any other person under or pursuant to this Agreement in respect of the Confidential Information. The Disclosing Party's sole liability under this Agreement shall relate to the material breach of clauses 1, 8, 12, 13”.

On 23 February 2010 Mr Obi and Mr Agaev met with representatives from Drake & Bart, the valuers. The purpose of the meeting was to discuss a presentation by Drake & Bart on the valuation of OPL 245 to Malabu. Mr Obi's evidence, which I accept, was that the presentation was being prepared to assist in the process of an agreeing an AMP pursuant to the terms of the EVP Exclusivity Agreement. The meeting was, I find, recorded in Mr Obi’s handwritten notes.

There is no dispute that, subsequently, on 6 March 2010 a meeting took place in the Hotel Bedford in Paris, at which, as planned, a presentation on the valuation of OPL 245 was delivered to the meeting by two representatives of Drake & Bart. What was in dispute was who attended the meeting and what happened at it. Evidentially this was a critical meeting for both Malabu's and EVP's respective cases.

EVP's case in relation to this meeting, based on Mr Obi's evidence in these proceedings, and Mr Agaev's evidence in the ILC Arbitration, introduced by way of hearsay notice, is that:

On the other hand, Malabu’s case in relation to the 6 March meeting, based on Chief Etete's evidence, was as follows:

First, I find as a fact that Mr Obi was indeed present at the meeting and that its purpose was for Malabu and EVP to agree the AMP. Mr Maton’s second witness statement, in support of Malabu’s application to set aside the freezing order, positively asserted as common ground that Mr Obi had attended the meeting. At that stage Malabu was running a different case that Chief Etete had notified Mr Obi of a minimum AMP at the meeting. In paragraphs 58 and 59 of his witness statement, Mr Maton said:

“It is common ground that Mr Etete and Mr Obi agreed to meet in Paris on 6 March 2010 to attend a presentation given by Drake & Bart who were consultants who had been retained for the purpose of arriving at a valuation of Block 245 with a view to fixing the Agreement Malabu Price... It is Malabu’s case that, at the meeting on 6 March 2010 in Paris, Mr Etete told Mr Obi that the Agreed Malabu Price had to be at least $2.1 billion, being the central market value placed on the asset by Drake & Bart, and that Malabu never regarded to the Agreed Malabu Price as being any lower than that”.

Chief Etete's explanation of why (if it were not true) this evidence had been put forward at the interlocutory stage, in circumstances where it must have been based on his instructions, since he was the only representative of Malabu who attended the meeting, was wholly inadequate. The idea that Mr Obi had not attended the meeting was demonstrably unrealistic, even on Chief Etete's version of events, particularly in circumstances where the letter dated 18 February 2010 to EVP was under discussion. Moreover Mr Obi's evidence that he was present at the meeting was clearly supported by what I find to be his contemporaneous notes of the meeting.

Second, whilst I accept that, as submitted by Mr Graham, there were some (in the circumstances, unsurprising) discrepancies in Mr Obi's various accounts of what transpired at the meeting, and his evidence as to the order of events, I nonetheless find as a fact that, so far as the termination issue is concerned, Mr Obi's account was broadly correct. I accept that, as described in detail by Mr Obi and by Mr Agaev, in his evidence given in the ILC Arbitration, as relied upon by EVP, the letter dated 18 February 2010 was indeed withdrawn by Chief Etete. Whatever was discussed at the meeting, the final agreed position was that: when Mr Agaev and Mr Obi asked Chief Etete whether he wanted them to stop work and walk out, Chief Etete was adamant that he did not want that to happen; accordingly, both EVP's and ILC's mandates remained in place; there was no condition laid down by Chief Etete, to the effect that their respective mandates would terminate on 27 April 2010, if no irrevocable letter of intent and no non-refundable deposit were produced by that date, or otherwise. I also accept that the issue of termination was not revisited. Whatever its flaws, Mr Obi's evidence on this issue was convincing and corroborated by Mr Agaev's hearsay evidence which I accept in this respect. Chief Etete's evidence, on the other hand, was inherently inconsistent and implausible.

Accordingly I reject Malabu's case that Mr Agaev agreed with Chief Etete on 6 March 2010 that:

“the EVP Exclusivity Agreement would come to an end on [27 April 2010] unless by then NAE and/or ENI had made a satisfactory offer and had produced an irrevocable letter of intent and a non-refundable deposit in the sum of at least $100 million [... and] that EVP would in those circumstances not insist on being given a month’s written notice of the termination of the Agreement;”

as pleaded in paragraph 38.9 of the Amended Defence and Counterclaim. I also reject the suggestion that Mr Agaev was in some way acting on behalf of, and was authorised to bind, EVP. There was nothing in the evidence to support such an assertion. On the contrary, the contemporaneous materials, such as the dealings and exchanges between the relevant parties, the actual roles performed by them and the conclusion of separate agreements for ILC and EVP made the position manifestly clear - Mr Obi alone was authorised to act on behalf of, and bind, EVP. I reject the Chief's evidence that Mr Obi was "Agaev’s man".

Third, I accept Mr Obi's evidence that it was expressly agreed between Mr Obi and Chief Etete that the mechanism for payment of EVP’s fee would be varied; and in particular that the concept of an AMP would be retained, but, instead of being agreed in advance, the addendum to the EVP Exclusivity Agreement would be completed only once an acceptable offer had been received, which in turn would fix the Agreed Malabu Price.

Fourth, however I do not accept that Mr Obi and Chief Etete expressly orally agreed at the meeting that EVP would receive a fixed fee of $200 million or that the AMP would necessarily be retrospectively set at $200 million less than the purchase price. I accept that Mr Obi suggested that a figure of $200 million was the size of the fee for which EVP was looking but, in my judgment, EVP has not demonstrated, on the balance of probabilities, that Chief Etete ever actually agreed to this specific figure in a contractually binding way. I find that the probability is that Chief Etete "brushed off” Mr Obi’s suggestion to agree a fee, on the one hand not wanting to discourage him from producing ENI/ NAE as a purchaser, but, on the other hand, not being prepared to commit either to an AMP or to any agreement as to EVP's fee. I find that, on the balance of probabilities, being the sort of man which he was, Chief Etete said something to the effect that Mr Obi should get on with doing the work to produce an investor under the terms of the EVP Exclusivity Agreement and that, if and when, he did, at a price that was acceptable, there would be no problem about agreeing an appropriate fee for EVP. I find that, rather than antagonise Chief Etete at that stage, in circumstances where the Chief was clearly reluctant to commit to any AMP, or a specific sum for EVP’s fee, Mr Obi would have gone along with the suggestion, confident that the contractual protections and control which the EVP Exclusivity Agreement afforded him would have enabled EVP to negotiate, and obtain Chief Etete's agreement to, an appropriate fee when the time came.

My reasons for reaching this conclusion may be summarised as follows:

But, as I have already found, whilst I could not accept Mr Obi's assertion that there had been any agreement on Chief Etete’s part to pay EVP a $200 million fee, I do accept that the figure may well have been discussed and that, otherwise, Mr Obi's account of the meeting was generally correct. I could not rely on Chief Etete’s account in any way whatsoever.

I find that both prior to and after the March meeting, Mr Obi was heavily involved in taking the project forward. I set out in a separate section of this judgment what I find to be the work carried out by EVP in accordance with the Exclusivity Agreement.

On 8 March 2010 a letter was sent from EVP to ENI indicating that it was breaking off the relationship due to a lack of confidence that a credible offer would be forthcoming in the anticipated timeframe. As Mr Obi explained, that letter was sent as a negotiating tactic with the aim of focusing ENI’s attention. The letter had the desired effect and, on 11 March 2010, a response was received from ENI indicating renewed enthusiasm in OPL 245.

Malabu sought to rely on various draft documentation and correspondence passing variously as between Mr Obi and his solicitors, Sheridans, between Mr Obi and Mr Agaev, and between Mr Obi and Raffeisen, in support of Malabu's case that the termination letter dated 18 February had not been withdrawn at the 6 March meeting. Mr Graham argued that the fact that Mr Obi had requested Sheridan's to prepare a one page addendum (entitled “Variation and Amendment of the EVP Mandate Agreement”) to the EVP Exclusivity Agreement providing for a three month extension to the mandate which would be contingent upon a non-refundable deposit by the end of March 2010 showed that Mr Obi considered the 18 February Letter still to be effective notice of Malabu’s termination of EVP and that he was hoping to secure an extension to the mandate by obtaining a deposit before his mandate expired. Mr Graham further submitted that the fact that the draft assumed that the current mandate expired on 27 April 2010 and that Mr Obi sent the draft variation agreement to Mr Agaev on 15 March 2010, likewise supported Malabu's case on termination. He also relied upon a draft letter dated 16 March 2010 from EVP to Malabu, seeking a 60 day extension to the EVP Exclusivity Agreement.

Mr Obi was extensively cross-examined about these documents; he explained that he had asked Sheridans to draft the variation in agreement as a precaution, particularly in light of the further mention of a non-refundable deposit in a draft term sheet which he had received the day before from Mr Teimour Agaev on behalf of Malabu. The draft document was never executed, but Mr Obi wanted the option of proposing an alternative arrangement to Chief Etete if it became necessary to do so.

Likewise, the draft letter from EVP to Malabu seeking a 60 day extension to the EVP Exclusivity Mandate also remained in draft and was never completed, or sent to Malabu. According to Mr Obi it was prepared to anticipate a situation where Chief Etete tried to withdraw EVP’s mandate, including over the non-refundable deposit issue. The letter was incomplete and was based on the format of a completely separate letter to ENI. Mr Obi explained that he realised there was no need for the letter, and so it was never finished.

I found Mr Obi's explanation on this issue credible, notwithstanding the changes in some of the detail of his evidence. His account in relation to the termination issue was also supported by what subsequently happened to which I refer below.

Malabu alleged that a meeting took place in April 2010 in Milan between Chief Etete, Mr Agaev, Mr Obi, Mr Armanna, Mr Descalzi and Mr Casula. According to Chief Etete's evidence, Mr Armanna is said to have repeated at this meeting that there would be a fee sharing arrangement between Mr Obi and certain ENI executives, to which Chief Etete’s response was that any fee had to be reasonable and representative of ‘Mr Obi’s minimal role’ in the transaction. Chief Etete also asserted that Mr Obi handed Chief Etete at this meeting a draft variation to the EVP Exclusivity Agreement, which provided for an extension to EVP’s mandate.

I reject Chief Etete's evidence that such a meeting ever took place in Milan in April 2010 as alleged. Either Chief Etete was confused, and was in fact referring to the earlier meeting which had taken place in Milan on 4 February 2010 at the “Principe di Savoia” hotel, which was the only occasion at which Chief Etete and Mr Descalzi met or Chief Etete was simply inventing the later meeting. In cross-examination on this issue Chief Etete's evidence was self-contradictory and confused. I accept Mr Obi's evidence that the meeting never took place. Malabu did not produce any document to corroborate the meeting or Chief Etete's presence in Milan in April and, although Mr Obi was frequently in touch with ENI representatives during April, there was no reference in Mr Obi’s SMS or email communications of a meeting with Chief Etete in Milan. In his evidence in the ILC Arbitration Mr Agaev said that no such meeting had taken place and that the only meeting between Mr Descalzi and Chief Etete was the 4 February 2010 meeting. I rely on that evidence as corroborating Mr Obi's account.

On 27 April 2010, Mr Obi received an email from Mr Armanna attaching ENI/NAE’s first non-binding offer for 40% of the OPL Assets. Mr Obi's evidence was that a copy of the offer was passed to Chief Etete but the level of the offer was redacted and a redacted copy was also sent to Mr Agaev. Mr Obi said that neither was informed of the offer until about 4 May 2010. The consideration offered by ENI was a cash amount of $617 million or $462 million for 40% of the asset, dependent upon certain scenarios. Mr Obi said that he was surprised at the low level of the consideration and the reserve estimates and so did not want Chief Etete or his advisers to know the exact figures. The offer was subject to a series of conditions precedent, which included approval by Shell of the sale of the asset, and the settlement of any existing disputes or claims relating to the Asset. The offer was also subject to Malabu obtaining the necessary approvals in respect of the transaction from the authorities in Nigeria.

Chief Etete's evidence was to the following effect:

Despite Mr Graham's criticisms of Mr Obi's evidence, I accept that he did not tell Chief Etete of the price which was being offered by ENI. Whether or not Mr Agaev knew the actual amount of ENI's preliminary offer, and whether or not Chief Etete was told the amount by Mr Agaev, are not matters which it is necessary for me to decide, although, given what Mr Obi thought about the size of the offer, I consider it is unlikely that Chief Etete was ever told.

More importantly, I reject Chief Etete's evidence to the effect that, in the alleged telephone conversation with Mr Agaev, or at any date around this time, Chief Etete purported to terminate the EVP Exclusivity Agreement or that Mr Agaev agreed that it had been terminated, whether on EVP's behalf or at all. Chief Etete's evidence on the point was highly unconvincing; it was not supported by any contemporaneous documentary material; and was consistently contradicted by Mr Agaev in the evidence which he gave throughout the ILC Arbitration. Moreover, apart from the fact that, according to Mr Obi and as I accept, Mr Agaev was not informed of the fact of the preliminary offer from ENI until early May 2010 (so it is unlikely that any telephone call took place in April), it is also inherently implausible that, immediately after receiving the first serious bid for OPL 245 which Malabu had received for many years, Chief Etete would adopt the high risk tactic of terminating EVP's mandate, and discouraging EVP's efforts, when EVP had been responsible for the introduction of ENI as a serious and potential bidder.

In order to proceed with the transaction, ENI had for several months been requesting a letter from Malabu to provide re-confirmation of EVP’s mandate. In particular, ENI was concerned that the EVP Exclusivity Agreement was signed by Chief Etete rather than an officer of Malabu. A letter bearing the date 8 April 2010 ("the 8 April letter") was drafted by Mr Obi and sent by email from Mr Agaev to Chief Etete on 9 April 2010. I accept Mr Obi's evidence that the draft letter was amended by, or at the direction of, Chief Etete to add words to the effect that EVP’s mandate was limited to the end of May. The actual letter, which was signed by Mr Gbinigie and Mr Munamuna, and still bore the date 8 April 2010, was then provided to Mr Obi at a meeting in Paris with Chief Etete on or about 8 May 2010 for the purpose of him providing the letter to ENI. He did so on 10 May 2010. The letter was in the following terms

“Attention: MR ROBERTO CASULA

Dear Sir,

RE: PROJECT CLEAR VISION-SALE OF A 40% PARTICIPATING INTEREST IN OPL 245

BY MALABU OIL & GAS LIMITED TO AGIP NIGERIA LIMITED - ENI

Malabu Oil & Gas Limited ("Malabu") a Nigerian company with Registration Number RG 334442, hereby confirms that there exists an exclusivity mandate limited to the end of May 2010 between Malabu and Energy Venture Partners Limited (EVP) in connection with the proposed sales, lease, or disposal of part of Malabu’s interest in Oil Prospecting License of 40% in OPL 245.

EVP has been authorized on behalf of Malabu, to provide corporate, technical and operational data and other confidential information including 3-D Seismic Data, belonging to Malabu and relating to Malabu’s operations this to assist the assessment of the opportunity.

(Assets) OPL 245

EVP is also authorized, on behalf of Malabu to receive binding financial offers and proposals from AGIP NIGERIA LIMITED- ENI

However, EVP is not authorized to approve, on behalf of Malabu, any offer, received by Malabu, or to enter into any sales or lease agreement on behalf of Malabu in connection with the proposed sale; All offers, received by Malabu, in connection with the proposed sales, lease or disposal of part or all of Malabu's interest in Oil Prospecting License 245 will be subject to the consideration and approval by the shareholder and the Directors of Malabu Oil & Gas Limited.

Yours Sincerely

[It was then signed by Mr Munamuna, as director and Mr Gbinigie, as secretary.]"

I am satisfied that the 8 April letter, although dated 8 April, was not in fact prepared on that date because the draft, which was amended by Malabu, was only provided to it on 9 April and the actual letter itself only provided to Mr Obi on 8 May. I reject Mr Gbinigie's evidence that he wrote the letter on 8 April.

I also reject Malabu 's case that the 8 April letter was in some way superseded, or was intended to be superseded, by a second letter dated 12 April 2010, which was signed by Chief Etete, as opposed to by Mr Gbinigie and Mr Munamuna and which purported to impose conditions on the extension of EVP’s mandate to the end of May. This letter ("the 12 April letter") was disclosed by ILC in the ILC Arbitration. The 12 April letter was in similar terms, but included an additional provision at the end of the first paragraph making the confirmation of EVP's mandate conditional upon ENI agreeing to pay Malabu a refundable deposit. This additional sentence was in the following terms

“Provided AGIP NIGERIA LIMITED-EN1 agrees to pay to Malabu Oil & Gas Ltd the Refundable fee proposed by Malabu in Paris within Seven (7) days of this mandate Malabu agrees to pledge" 2%"of its 40% asset of OPL 245, Furthermore, AGIP-ENI will close this transaction within this Exclusive Period,”

The letter was emailed by Chief Etete to Mr Teimour Agaev on 12 April 2010, but, as confirmed by Mr Gbinigie, and I so find, was never provided to EVP. Nor was it provided to ENI, not least because the avenue for communication to ENI was via EVP in accordance with the terms of the EVP Exclusivity Agreement.

Chief Etete's written evidence was to the following effect:

In Malabu's written closing submissions it was variously contended:

Despite Mr Graham's criticisms of Mr Obi's evidence, I accept that, despite certain inconsistencies, it was generally correct in relation to this issue. There was every reason for ENI to require a properly executed confirmation from Malabu's officers as to the existence of EVP's mandate, and Mr Obi's explanations as to the sequence of events, and the reason for the inclusion of the statement that the mandate was "limited to May 2010", were entirely credible. Chief Etete's evidence in cross examination, on the contrary, was verging on the incoherent and it was impossible to place any reliance on his confused account of events. Likewise he was wholly unable to provide any explanation as to how the two letters could sit alongside Malabu’s case on termination. Accordingly I reject Malabu's case that the 12 April letter was the letter that was, or should have been, provided to EVP and/or ENI, and its case that Mr Agaev was acting without authority when he provided the 8 April letter to EVP.

What was perfectly clear was that both the 8 April and 12 April letters were wholly inconsistent with Malabu’s case that EVP had been notified (via Mr Agaev) on 6 March 2010 that the EVP Agreement was to terminate on 27 April 2010 or that, in a telephone conversation on or about that date, Chief Etete had terminated the EVP Exclusivity Agreement and that Mr Agaev had agreed on behalf of EVP that such was the case. The 8 April letter, and the fact that the 12 April letter was never provided to ENI, were also inconsistent with Malabu’s case that EVP was required to obtain a non-refundable deposit. The two letters clearly confirmed that, whatever Malabu’s intention was so far as the future was concerned as to serving notice under the EVP Exclusivity Agreement, it had remained in existence throughout the period March/April 2010 and had at no time been terminated.

It was common ground that over the summer of 2010 there were several meetings between Chief Etete, Mr Obi and Mr Agaev in relation to the sale of the OPL Assets. Chief Etete said that he did not have any interest in maintaining a relationship with Mr Obi, but nonetheless Mr Agaev did bring Mr Obi with him to meetings on a few occasions during the summer of 2010, namely:

Mr Obi’s evidence was to different effect. He said that during the period May to July 2010 there were a series of meetings between Chief Etete and Mr Obi, many just between the two of them, but sometimes Mr Agaev was present as well; he said that the frequency of meetings between Malabu and EVP intensified in the period from May to July 2010; that there were also meetings as between EVP and ILC; and that most of the meetings took place at various hotels in Paris. I accept Mr Obi's evidence that a number of meetings did take place as between him and Chief Etete (and on occasions, Mr Agaev) as part of EVP's ongoing work under the terms of the extant EVP Exclusivity Agreement to progress the proposed deal with ENI. I reject Chief Etete's attempt to marginalise Mr Obi's role in these meetings and his suggestion that, effectively, Mr Obi and Mr Agaev were simply acting on their own behalf, as opposed to under the terms of EVP's and ILC's respective mandates.

On 11 May 2010 Malabu wrote to the Attorney General seeking permission to perform the 2006 Settlement Agreement. As Mr Gbinigie said in cross examination, the purpose of this letter was to elicit a letter in response whereby the FGN confirmed the 2006 Settlement Agreement. I accept Mr Obi's evidence that he had previously advised Malabu that it should obtain this confirmation in order to weaken the position of Shell, prevent Shell from hiding behind the lack of any clear statement confirming Malabu’s rights to 100% of OPL 245, and to facilitate the entry of other investors who were unsure about the block’s ownership status.

On 16 June 2010 a second non-binding offer was made by ENI/NAE to EVP for 40% of the OPL Assets. The offer formed part of the ongoing negotiation between EVP and ENI/NAE, but was not forwarded to Malabu.

On 18 June 2010 Malabu received a response to its letter to the Attorney General which endorsed the 2006 Settlement Agreement. (The letter was subsequently passed to Mr Obi on 27 August 2010). On 2 July 2010, Malabu received a separate letter from the Ministry of Petroleum that confirmed the approval of the 2006 Settlement Agreement.

Mr Obi learnt about this and on 5 July 2010 he emailed Raiffeisen informing them Malabu was dropping its demand for a cash deposit, and had consented to sell 100% of OPL 245. Mr Obi's evidence was that, at a meeting which took place on or about 5 or 6 July 2010, Chief Etete informed Mr Obi that he had secured approval from the FGN to sell 100% of the OPL Assets and showed Mr Obi official confirmation from the FGN of that fact; that it was agreed and understood from this point that the EVP mandate would extend to a sale of up to 100% of the OPL Assets; that thereafter EVP’s focus switched to sourcing a buyer for 100% of OPL 245; and that EVP subsequently revised the term sheet with its advisers to reflect the fact that anything up to and including a 100% sale was now possible; although, as was common ground, there was no amendment to the EVP Exclusivity Agreement to reflect this point. Mr Obi explained the fact that he had made no attempt to amend the EVP Exclusivity Agreement in cross examination as follows:

"20 Q. But the point I wanted to make to you, Mr Obi, is this.

21

If your contract was not terminated, you would have

22

needed to revise it at this stage, would you not,

23 because it expressly stated that it related to only

24 40 per cent?

25 A. It says 40 per cent on the contract.

1

Q. Yes, so if you were going to be responsible for selling

2 100 per cent, would you have needed a revision or

3 amendment to your contract?

4 A. We had an oral – we had agreements to sell

5 100 per cent.

6 Q. Well, surely you would have needed to change your

7 mandate?

8

A. Well, all that would have been captured in the addendum

9

when it was signed. Everything on the contract would

10

have been captured. There was an addendum which was

11 attached to the contract which had the 200 million

12 minus, would have had this 100 per cent sale. So

13 everything would have been in that addendum.

14.

Q. Was it not important to you -- you were concerned about

15 your mandate protection --

16 A. Right.

17 Q. – and making sure your rights were properly protected

18 legally -- to see that you had a mandate that related to

19 the changed environment, namely a sale of 100 per cent?

20 A. I had -- I believe I had a mandate, and the fact that

21 the chief had communicated to me written documents such

22 that I had forwarded to him for his comments the SPA for

23 a t00 per cent sale was consistent with that mandate,

24 The chief had also given me back his comments on the

25 100 per cent SPA and given me Malabu’s version of the

1 SPA for 100 per cent. I’m sure that was consistent with

2 me working on the 100 per cent, I think.

3 Q. I think what you are telling me is it didn’t cross your

4 mind to seek a variation or amendment to your mandate

5 for the purpose of extending it to 100 per cent?

6 A. I didn’t believe it crossed my mind for the 100 per cent

7 issue at that point. It was it didn’t cross my mind.

However, Chief Etete said that he had no discussion in these meetings with Mr Agaev or Mr Obi about resuscitating EVP’s mandate or extending it to 100% of the OPL Assets. Accordingly Malabu's case was that the evidence did not show any agreement that EVP’s mandate would extend to a 100% sale; but rather showed that EVP simply did not have any mandate at that time; and that, accordingly, as the addendum to the EVP Exclusivity Agreement made no mention whatsoever of a 100% sale and used the same defined term “OPL Assets” (defined in the agreement restrictively to refer to 40% of OPL 245), the addendum could not be regarded as referring to a 100% sale; that Mr Obi’s position that he had yet another oral variation to the EVP Exclusivity Agreement was implausible and that the far more likely position was that Mr Obi did not seek an amendment to this agreement because he did not have any existing mandate; and that he would no more have got an amendment to cover a 100% sale than he would an amendment to revive his mandate.

I prefer Mr Obi's account and reject that of the Chief. It was perfectly clear from the contemporaneous drafts of the proposed sale and purchase agreement ("SPA") that were subsequently circulated between the parties, as well as other evidence, not only that they both proceeded on the basis that the subject matter of the sale was going to be 100% of the OPL Assets, but also that both parties regarded the EVP Exclusivity Agreement as remaining in operation and that it was the agreement under which EVP was providing services. These included provision by Mr Obi on 14 July 2010 of a draft of the SPA which he had been negotiating with the assistance of professionals engaged by him and the subsequent provision by Chief Etete of his suggested version of an SPA on 27 July. Chief Etete was unable in cross-examination to provide any sensible explanation as to why he was engaging in this process with EVP unless - as he must have been aware - the EVP mandate was ongoing and efforts were being made by EVP thereunder to conclude an agreement with ENI. Nor do I find, in the circumstances, Mr Obi's explanation that there was no need to produce an amendment to the EVP Exclusivity Agreement surprising. It is true that either the EVP Exclusivity Agreement or the Addendum would have required modification if the definition of "the OPL Assets" was intended to refer to a 100% interest but the evidence clearly showed that the parties were proceeding on the agreed basis that EVP was being tasked to secure an offer for 100% of the OPL Assets, and that any SPA with the purchaser would refer to 100%, but there would have been no difficulty in making any such amendment to EVP's mandate.

It is relevant for the purposes of EVP's implied contract/quantum meruit claim to deal with what occurred at certain of the meetings between Chief Etete and Mr Obi during the period. The evidence relating to them was also relied upon by Malabu in support of its termination and other defences. It is not necessary for me to deal with all the alleged meetings or to find conclusively whether they did or did not take place. It is not surprising that both men were somewhat vague about the dates of meetings where there was no supporting documentary evidence.

It was common ground that a meeting took place at the Hotel Le Bristol in Paris on 15 July 2010. On 14 July 2010, in advance of the meeting Mr Obi emailed Chief Etete attaching a draft SPA with ENI for 100% of OPL 245.

Chief Etete’s written evidence was to the effect that:

In his oral evidence Chief Etete reiterated that there had been no discussion about these matters at the meeting.

Mr Obi’s written evidence of this meeting was to the effect that:

In his oral evidence, Mr Obi said that after the 15 July meeting he effectively went on strike for the next 10 days or, rather, made it appear to Chief Etete that he was going on strike, although in fact he was still working on the deal. Mr Obi was extensively cross examined about what occurred at this meeting by reference to various documents and to his notes.

Having reviewed the available evidence, I am satisfied that there was indeed a discussion about fees as between Chief Etete and Mr Obi at this meeting; I accept that Mr Obi may indeed have mentioned a figure of $200 million and may indeed have made the point that he was not prepared to go on working unless EVP's fee was agreed. But I am not satisfied on the balance of probabilities that Mr Obi made a threat in such clear terms as he now suggests about going on strike if he did not get Chief Etete's agreement to a fee in the specific sum of $200 million. Certainly there was no agreement on Chief Etete's part at this meeting to pay such a fee and indeed Mr Obi did not suggest that there was. Again, I infer that the overwhelming likelihood is that (either at this meeting or the subsequent meeting) once again, Chief Etete fobbed Mr Obi off with an assurance along the lines that, if and when Mr Obi came up with an offer that was acceptable, there would be no problem about agreeing an appropriate fee for EVP and that thereafter the parties proceeded on that basis. Again, I find that Mr Obi would have been reluctant to have antagonised Chief Etete at that stage, by insisting on Malabu’s specific agreement to a fee of $200 million.

I find as a fact that on 27 July 2010 Mr Obi, Mr Agaev and Chief Etete met in Paris. The meeting is recorded in Mr Obi’s handwritten notes under the heading “MBU Meeting - Paris”.

I also find that on the following day, on 28 July 2010, Mr Obi and Chief Etete met again within Mr Agaev. The fact that the meetings took place is also supported by other contemporaneous documentation.

Malabu denied that any meetings took place between Mr Obi and Chief Etete on 27/28 July. I reject its case on this aspect. The fact that the meetings took place is inconsistent with Malabu's defence that the EVP Exclusivity Agreement had already been terminated, and with its case that Mr Obi's involvement in the transaction was minimal.

Mr Obi's affidavit evidence was that he and Chief Etete did not discuss fees at these meetings and that, because there was no further discussion, Mr Obi took Chief Etete's desire to get things moving again as re-confirmation of his minimum fee of $200 million.

In cross-examination, Mr Obi said the following:

However, although I accept that the meeting took place, I do not accept that Mr Obi at the time regarded Chief Etete's request that the work should continue, or the latter's silence on the issue of fees, as a tacit agreement to pay Mr Obi's requested fee of $200 million. Nor objectively would a reasonable person in Mr Obi's position so have concluded. The likelihood was that both parties realistically retreated from their aggressive negotiating stance and decided to get on with the business of securing a deal from ENI, with Chief Etete no doubt making reassuring comments about there being no difficulty in agreeing a fee for EVP's services once the deal was on the table. Again I found Mr Obi's evidence on this issue to be an example of his tendency to embellish the truth, notwithstanding that I did conclude he was telling the truth in general terms about the fact that the meetings indeed took place. Again I find it inconsistent with Mr Obi's account that there is no record in either his notes of the meetings or any other document of the alleged confirmation of EVP's $200 million fee. It was wholly inconsistent with Mr Obi's general approach not to have recorded such a confirmation.

I find as a fact that, during this period:

At some stage during September, Malabu appears to have attended a meeting with Gazprom in Paris in relation to the proposed sale of the OPL Assets. When questioned about the meeting, Chief Etete accepted that the only proposals that Gazprom were prepared to put forward were not acceptable and that the contact went no further than this.

In his witness statement Mr Gbinigie sought to suggest that he had a series of without prejudice meetings and discussions with the Attorney General and his advisers, at the Attorney General's office in the Federal Ministry of Justice in respect of OPL 245 during June, August and September 2010. He said that:

Chief Etete also gave evidence to the effect that Mr Gbinigie had attended such meetings although he personally had not been present. The function of this evidence was to support Malabu's case that Malabu was engaged in a separate and independent stream of negotiating activity, eventually leading to a meeting with the Attorney General on 15 November 2010, and that accordingly the transaction ultimately entered into in 2011 did not fall within the terms of the EVP Exclusivity Agreement.

However, in cross-examination, Mr Gbinigie accepted that there was no documentary evidence whatsoever relating to the alleged meetings which had taken place, although he tried to suggest that they were so confidential that no record was taken. Mr Gbinigie's evidence was not impressive on this point and, in the absence of any documentation relating to these alleged meetings, I am not prepared to accept that any such meetings did in fact take place until the meeting on 15 November 2010 or shortly before. As Mr Howard submitted, the suggestion that Mr Gbinigie could have attended high level meetings as company secretary to Malabu, but had not written down a single word, and not a single document was generated, was difficult to accept. In particular, whereas an attendance record has been produced in relation to a subsequent meeting with the Attorney General of Nigeria on 15 November 2010, no such record was produced in relation to these alleged meetings.

I am prepared to accept however that by late September 2010 the FGN may have been involved at some level in discussions with Shell and possibly also Malabu in relation to resolution of the issues relating to OPL 245. That appears to be supported by Mr Obi's own note of a meeting with Shell on 21 September 2010.

I find as in fact that there was a very brief meeting at the George V Hotel in Paris on 20 October 2010. Chief Etete was late and Mr Obi needed to leave to go to Milan. Mr Obi explained in his oral evidence that, as he was departing, he briefly bumped into Chief Etete in the corridor and that, during the course of the encounter, Chief Etete said words to the following effect:

“what are you doing here, you shouldn't be here, hurry up, go back and get your 200 million.. ”

This was somewhat different from the account which Mr Obi had given in his affidavit where he said:

“in October 2010, I met with Etete and Agaev at the George V in Paris. A formal offer from NAE/ENI was imminent. I recall that at this meeting when talking about moving the deal forward, the Chief said words to the effect that you should hurry things up so you will "get your 200 million". At this meeting at the George V the Chief expressly recognised my entitlement to a $200 million fee, so what had previously been agreed was now re-confirmed. ”

In cross-examination, Chief Etete denied that he had met with Mr Obi on this date, or that there had been any meeting at the George V hotel (which he said he would have remembered). This position was contradicted by the documentary record, and in particular by the text message received that Mr Obi received from Mr Agaev at 10.37am: ‘We are waiting for u in G5’. I reject Chief Etete's evidence on this aspect.

I accept Mr Obi's evidence that there was such a brief meeting on that date and that, during the course of this encounter, Chief Etete said something along the lines that Mr Obi should hurry up and get his $200 million fee. However I do not accept that what was clearly a jocular comment on the part of the Chief, no doubt teasing Mr Obi about his repeated insistence that he wanted such a fee, amounted to any sort of confirmation that the Chief had previously agreed it. My observation of the way in which Chief Etete behaved in the witness box suggests that it would have been entirely typical of him to have made such a comment. Nor do I accept that Mr Obi can have genuinely thought that such a remark amounted to anything more than a tease.

On 28 October 2010 Mr Obi and Chief Etete met, without Mr Agaev, at the Hotel Le Bristol in Paris. Mr Obi’s handwritten notes include a record of the meeting. There was also an express reference to the meeting in an email from Mr Obi to Chief Etete on 30 October 2010. Chief Etete denied that the meeting took place but I do not accept his evidence. Because of its relevance to a note of a later meeting, I refer to Mr Obi's evidence that his handwritten notes of the meeting include a reference to rumours that EVP was to receive money in some sort of side deal with Shell and ENI, relating to $85 million that Shell was considering investing in the transaction at the time. I also accept that at the meeting Mr Obi told Chief Etete that there was no truth in these rumours.

On 30 October 2010 ENI/NAE made a third offer for the purchase from Malabu of a 100% participating interest in the OPL Assets at a price of $1.26 billion. This offer followed a period of about a month of negotiations as between the ENI executives and EVP and its financial and legal team, in which I find that Mr Obi was directly involved. The meetings had taken place at ENI's headquarters in Milan. The letter was addressed to Raiffeisen (EVP's advisers) with a copy to EVP. The offer, which was made by NAE, was expressed to be conditional upon execution of an SPA between Malabu and NAE in substantially the same form as the draft produced by EVP which was attached to the offer. The proposed consideration of $1.26 billion consisted of a $1.05 billion payment to Malabu and a payment of the outstanding $207,960 million signature bonus to the FGN. It was a condition precedent to the SPA (reflected at clause 2.6-2.7 of the offer) that the FGN should re-issue the OPL 245 licence jointly to NAE and SNEPCO. It was also a condition that FGN, SNUD and Malabu should withdraw / discontinue all ongoing and pending claims as between them. I also accept Mr Obi's evidence that it was envisaged by ENI/NAE that, as part of the transaction being proposed, a multiparty settlement agreement would also be entered into between the parties, and that a multi-party settlement document had in fact been drawn up by ENI based on discussions with EVP.

The structure of the offer (in particular the requirement that the FGN should re-issue the OPL 245 licence jointly to NAE and SNEPCO) clearly reflected the fact that during the summer of 2010 there had been negotiations and discussions between Shell, EVP and ENI to arrive at a consensus for cooperation for the joint acquisition of the OPL Assets and the settlement of the outstanding disputes with Shell. The transaction was to be governed by English law and subject to the non-exclusive jurisdiction of the English courts. The offer was open for acceptance by Malabu by no later than 3 November 2010.

The following terms of the 30 October 2010 offer are material to a consideration of Issue 6, namely whether the 29 April 2011 Transaction attracted commission under the terms of the EVP Exclusivity Agreement:

Consideration

an amount of USD 207,960,000.00 (two hundred and seven million nine hundred sixty thousand) which will be paid directly to the Federal Government of Nigeria in satisfaction of any and all payment obligations with respect to the signature bonus for the Asset (“Bonus Element”); and

an amount of USD 1,053,000,000 (one billion and fifty three million) which shall be paid directly to Malabu (“Consideration”).

………

Tax deductibility, on a block basis, of the sum of three hundred thirty five million and six hundred thousand (USD 335,600,000.00) consisting of the past costs incurred by Shell Nigeria Ultra Deep Limited (“SNUD”) in the execution of the work programme on the Asset pursuant to the terms of the Production Sharing Agreement between SNUD and National Nigerian Petroleum Company (“NNPC”) dated 22 December 2003.

Asset consisting in one hundred percent (100%) title and interest in OPL 245, corresponding to a one hundred percent (100%) production entitlement;

No rights by Federal Government of Nigeria (“FGN”), NNPC and/or any of their relevant agencies and institutions to acquire any participating interest in, or any title to any portion of production from, OPL 245 or in any OMLs deriving thereform.

OPL 245 having a duration of ten (10) years from the date it is reissued, and any OMLs which may derive therefrom having an initial duration of 20 years;

The Transaction (including re-issuance of the new OPL 245 licence) being fully exempted from any and all direct and indirect taxes, duties and/or other levies in any form whatsoever (including by way of withholding) or, in case any such taxes duties or other levies become payable, the same shall be entirely borne by Malabu.

Completion of the Transaction

Although, according to the witness statements it was apparently common ground that, on 31 October 2010, two further meetings took place at the Hotel Le Bristol between Mr Obi and Chief Etete, in cross-examination Chief Etete sought to deny that he had met with Mr Obi on that date. Instead he insisted that he had met with Mr Agaev, and possibly also Mr Obi, either on that date or on 1 November 2010 and that it was Mr Agaev who presented the terms of ENI’s 30 October 2010 offer to him. However it was clear from a copy of Mr Agaev’s passport that Mr Agaev did not arrive in Paris until 1 November 2010. I accept Mr Obi 's evidence that the meetings took place on 31 October 2010 as between Chief Etete and Mr Obi alone. I also accept that the purpose of the meetings, which had been pre-arranged by an email from Mr Obi directly to Chief Etete, was for Mr Obi to present to Chief Etete the offer from ENI/NAE. At the first meeting, Chief Etete rejected the offer, and wrote on EVP’s covering letter that he rejected both the amount of the offer and also the references to Shell’s involvement in the deal. He noted in manuscript

“your offer is totally unacceptable, this also [sic] the mention of Shell is the document is not only unacceptable but a gross insult. It must be very clear that Malabu Oil & Gas has no business transactions with Shell”.

Chief Etete then wrote and signed a letter directly to ENI/NAE rejecting the offer for similar reasons. The letter was in intemperate, uncommercial terms and stated that Malabu would only accept $2.2 billion "no less, no more" and that the transaction had to be closed no later than close of business on 2 November 2010 otherwise Malabu "shall close with other interested investors thereafter without any notice". I find that this letter was handed to Mr Obi at the second meeting with Chief Etete later on 31 October 2010, but that Mr Obi did not hand over the letter to ENI/NAE due to the risk of jeopardizing the transaction with ENI. I accept Mr Obi's evidence that he correctly recognised that Chief Etete’s reaction was likely to cause problems and get in the way of the chance to negotiate a higher price. A separate copy of the letter was then sent to ENI/NAE, by email, under the signature of Diane Arnold, who signed herself as simply "secretary" but who in fact had no involvement in the transaction. This event caused considerable confusion at ENI/NAE, and considerable time was spent by Mr Obi seeking to resolve the situation.

On the following day, once Mr Agaev had arrived, a further meeting took place as between Mr Obi, Mr Agaev and Chief Etete. The meeting was recorded in Mr Obi’s handwritten notes. The notes state “Refused to sign - claims no problem with 85 will sign all the papers upon closing”. Mr Obi was strongly cross-examined by Mr Graham to the effect that this was a reference to Chief Etete being agreeable to selling 85% of Malabu's interest in the OPL Assets and keeping 15%. In closing submissions Mr Graham also argued that it was unlikely that Mr Obi was telling the truth about this meeting and the earlier meeting on 28 October 2010, where the figure of $85 million was also mentioned (according to Mr Obi), as this would mean that Chief Etete was alleging that EVP had entered into a side deal with ENI and/or Shell to receive $85 million only a few days before he was also allegedly proposing to pay Mr Obi $85 million. Mr Graham submitted that the more likely explanation was that both references were to the 85% holding in OPL 245 that Chief Etete was saying he was willing to part with at this stage. Chief Etete was also cross-examined to the effect that, at the meeting on 1 November, he sought to renegotiate Mr Obi's fee, suggesting that the $85 million would be a figure that he would have no problem with. Chief Etete claimed that there was no discussion at all about the figure of 85 at the meeting, and that the notes were a complete fabrication. He was unable to explain, however, why he had not addressed this issue at all in any of his witness statements.

In relation to this issue I accept Mr Obi's evidence. I find that, as Mr Obi described in cross-examination, this was an attempt by Mr Obi to lay the ground for the Chief or Malabu to sign the addendum to the EVP Exclusivity Agreement, which would record the deduction of the $200 million fee which Mr Obi was seeking from the price of $1.26 billion. I accept Mr Obi's evidence that at this meeting Chief Etete indicated to Mr Obi that he had no problem with Malabu paying EVP $85 million. I reject Chief Etete's evidence to the contrary. In cross-examination on this issue Mr Obi said:

14 Q. My suggestion to you is that is a reference to he has no

17 A. Totally wrong. That is -- when he says refused to sign,

18 as I had explained to you at the 6 March meeting, the

19 deal was I would get the offer, and then we would do an

20 addendum, deduct the 200.

21 So the offer had come in on the 31st. So what I was

22 now doing was laying the ground for the chief or for

23 Malabu to sign the addendum, deducting the 200 from the

24 1.26, if he accepts that that was a fair deal.

1 chief: chief, I need to get my addendum signed; and he

2 refused -- he says: no, no, I'm not going to sign, I'm

3 not going to sign that now. Then he throws in the 85

4 from the previous conversation: I have no problem with

5 the 85, I will sign all the papers upon closing, ie all

6 your backdated addendums reflecting the fee. That is

7 entirely what we're talking about in this discussion.”

However this description by Mr Obi supports my conclusion that, despite Malabu's obligations under the EVP Exclusivity Agreement to agree the AMP, Chief Etete was in fact refusing either to agree the AMP or to go along with Mr Obi’s alternate suggestion that they should simply agree EVP’s fee at the specified amount put forward by Mr Obi. Once again the Chief was prevaricating by fobbing Mr Obi off with the assurance that he would sign the necessary addendum, thereby fixing EVP's fee, once a deal with ENI had been closed and that he, Chief Etete had no problem with the fee of $85 million. It was in fact clear that by this time Chief Etete had already contemplated the possibility of circumventing EVP altogether.

On 3 and 4 November 2010, Mr Obi sent emails to ENI/NAE and his advisory team confirming that Malabu and ENI were not able to reach an understanding and that the deal was off. According to Mr Obi, this email was a negotiating tactic and everyone was clear that the negotiations would continue thereafter and that the 30 October offer would be improved upon. I accept Mr Obi's evidence in this respect.

On 15 November 2010 a meeting was held at the offices of the Attorney General of Nigeria in Abuja. EVP was not invited to the meeting, and Mr Obi did not receive advance notice that it was going to happen. The meeting was attended by representatives of Shell, ENI/NAE, Malabu and the FGN. The representatives of Malabu who attended the meeting were Mr Munamuna, Mr Gbinigie and an external legal adviser, Dele Adesina. Neither Chief Etete nor Mr Agaev attended. Mr Armanna attended on behalf of ENI (and possibly also Mr Casula) and Mr Peter Robinson attended on behalf of Shell. Mr Obi found out about the meeting and what had been discussed at it, from communications and conversations with Mr Agaev (who had been informed about it by Chief Etete), and also from communications and discussions with Mr Descalzi of ENI.

I accept Mr Howard's submission that on the evidence the likely catalyst for the meeting was Malabu's precipitous and uncommercial letter rejecting the 30 October 2010 offer. It is likely that ENI and Shell had become exasperated by Chief Etete’s reaction and so sought the assistance of the Attorney General. I also accept that the SPA which had been negotiated between EVP and ENI/NAE was used as the basis for an effort to conclude the transaction, and that Chief Etete agreed on the phone in principle to accept a price of $1.3 billion after NAE had offered to increase the price by $40 million. The latter fact is supported by the fact that the figure of $1.3 billion was discussed at the meetings that followed in late November 2010. This was denied by Chief Etete in cross-examination, although he was unable to explain how it was that the price was increased by $40 million. Mr Gbinigie also denied in cross-examination that the SPA which had been negotiated between EVP and ENI/NAE or ENI's offer of 30 October 2010 was discussed at the meeting on 15 November. I find this impossible to accept, given the necessary involvement of both Shell and ENI in the offer and a joint presence at the meeting.

I am able to accept Mr Gbinigie's evidence in general terms that, at the meeting, the Attorney General said that the FGN’s objectives were to settle the ICSID arbitration proceedings and finally to put the oil-field into operation; that a deal was essential; that he expected Malabu and Shell to compromise to get a deal done, without the disputes dragging on; and that his approach was to reach negotiated solutions to the conflict for the good of all. I am also prepared to accept that various solutions were discussed including: a joint venture between Malabu on the one hand, and SNUD with ENI on the other; Malabu taking OPL245 with a third party investor and refunding SNUD for any costs incurred in relation to the block; and the FGN allocating a different block to SNUD, and Malabu surrendering the block to the Government for cash. It was clear that there was discussion generally about how the settlement talks were to be progressed.

I should say that, by detailed reference in cross-examination and closing submissions to certain Italian newspaper articles, and texts passing as between Mr Obi and certain of the ENI representatives, Mr Graham submitted that the evidence demonstrated that Mr Obi had "private arrangements to be remunerated by ENI (whether as part of a fraud on that company or not)"; see paragraph 413(3) of Malabu's closing submissions. The allegations were un-particularised and changed over time. I do not find them proved.

However it did appear from the evidence given by Mr Obi in cross-examination that he took the view that certain representatives of ENI had "circumvented EVP with the [Nigerian] Government" and that a friend of his attempted to prevent that from happening.

Following the meeting on 15 November 2010, details also began to emerge of a lawsuit that had been filed by Mohammed Sani, the son of General Abacha, on 24 November 2010 against inter alia Malabu, its shareholders as shown on the register and Shell, in an attempt to obtain recognition of his shareholding in Malabu, and that he had commenced injunction proceedings in connection with the sale of the block. In his evidence in the ILC Arbitration, Mr Agaev, who was informed of this development by Shell, said of this development:

“The name of Chief Etete did not shine but the ghost of Sani Abacha’s reputation seemed likely to kill the deal. Moreover the legal risks around OPL 245 effectively doubled...”

I conclude that it was probable that, as submitted by EVP, the Mohammed Abacha claims prompted Shell and ENI to rethink their willingness to be seen to deal with Malabu, which ultimately led to the transaction being structured in the form of two separate resolution agreements with the FGN. This avoided the need for either ENI or Shell to contract directly with Malabu, something that was emphasised in the later press release by ENI, in which it denied that it had entered into any direct transaction with Malabu.

On 27 November 2010 Mr Obi met Mr Agaev in London. Mr Agaev requested Mr Obi’s assistance in arranging a meeting in Milan between Malabu and the ENI executives. Mr Obi claims that he agreed, but made clear that Chief Etete would need to "reconfirm" in writing EVP’s fee entitlements, including the right for the purchase consideration to be held in escrow pending the deduction of EVP’s fees. It would not have been surprising if Mr Obi had indeed insisted that his fee arrangements should be agreed and reduced to writing but what was precisely discussed between the two men I do not need to decide.

It was common ground that Mr Obi arrived in Milan on 29 November 2010 and that Chief Etete and Mr Agaev had arrived earlier the same day and that various meetings took place in Milan on that date and on the days following. What was in dispute was the people between whom the meetings took place and what was discussed at the various meetings. It is not necessary for me to rehearse the extensive evidence relating to these meetings summarised in both sides' closing submissions or to make detailed findings of fact. Having reviewed the relevant evidence, I basically, but subject to important exceptions, accept Mr Obi's evidence and reject that given by Chief Etete. In summary, I make the following findings:

For the first time in cross examination, Chief Etete gave evidence to the effect that a meeting took place in Paris following the meetings in Milan, which was attended by Mr Armanna, Mr Akinmade and Chief Etete. He gave an account of a dinner which he said took place at the Hotel Bristol after which the three men went to the Chief's room. There Mr Armanna allegedly threatened Chief Etete that if Chief Etete took the OPL 245 deal elsewhere the Chief was a “living dead man”; this was said to have prompted an emotional response from Chief Etete along the lines that he would hunt down Mr Armanna and his colleagues if they threatened the Chief's life, following which both Mr Akinmade and Mr Armanna in turn knelt down and held the Chief's feet, repeatedly saying that they were sorry and asking for forgiveness. Whilst I am perfectly prepared to accept that, as the Chief suggested, in Nigeria it is a custom that a person seeking forgiveness would behave in such a way, I am wholly unable to accept that Chief’s evidence that such a meeting in fact took place. The whole incident, which I can only suppose the Chief thought lent credence to his earlier suggestion that he had been blackmailed into signing the EVP Exclusivity Agreement, was so unusual that, if it had been true, it is inconceivable that it would not have featured earlier in any of his witness statements. Chief Etete's account of this alleged meeting was incredible, apart from being inconsistent with his earlier evidence that, because of concerns for his personal safety, following an earlier meeting with Mr Armanna, he had fled from Milan. Unsurprisingly, the alleged incident did not feature in Malabu's written closing submissions. It provided another reason why I was unable to rely on the Chief’s credibility as a witness.

On 11 December 2010 Mr Obi had a meeting with the Attorney General of Nigeria at the Hilton Paddington Hotel in London. Mr Obi's evidence was that the Attorney General passed on to Mr Obi information from Malabu to the effect that it was prepared to accept a "reduced" fee of $55 million, plus any amount negotiated above $1.3 billion; and that Mr Obi confirmed to the Attorney General that this was unacceptably low.

Chief Etete's evidence in his witness statement was to the following effect; in the middle of December 2010, he was called by the Attorney General who told him that Mr Obi had come to see him, and told him that he had previously been Malabu’s agent and involved with the introduction of ENI as an investor in OPL245; that Mr Obi had pleaded with the Attorney General to persuade Malabu to pay him a fee if a sale to ENI went ahead; and that Mr Obi had told the Attorney General that he, Mr Obi, thought that $50 million was appropriate for the work which he had undertaken; the Attorney General told Chief Etete that he knew nothing of Mr Obi’s relationship with Malabu, and that Mr Obi should deal directly with Malabu.

In general terms I accept Mr Obi's evidence about what was said at this meeting with the Attorney General, except that I do not accept that the word "reduced" was used by the Attorney General. In paragraph 83 of Mr Obi's first affidavit, this was not how he then described what was said at the meeting. In that description, it was Mr Obi who was said to have claimed that "a reduction of the minimum fee from the original $200 million to $55 million was totally unacceptable". It was clear from Mr Obi's own evidence and his contemporary notes, and indeed other evidence from the Malabu side that, by this stage, the Attorney General was attempting to broker a satisfactory deal, which provided an equitable result for all participants in the transaction, in order to achieve a final resolution of the historic problems which had befallen OPL 245, and the start of production at the oilfield. That was no doubt why the Attorney General was prepared to meet with Mr Obi, not only on 11 December 2010 but also on subsequent occasions.

I do not accept what Chief Etete said was the thrust of his telephone conversation with the Attorney General. The notion that the latter would have said that "he knew nothing of Mr Obi’s relationship with Malabu, and that Mr Obi should deal directly with Malabu" is inconsistent with the Attorney General's subsequent meetings with Mr Obi. I find that Chief Etete did indeed inform the Attorney General that Malabu would be prepared to pay EVP a fee of $55 million by way of commission, and indicated that such a proposal could be communicated via the Attorney General to Mr Obi, which duly happened at the meeting in London between the two men on 11 December 2010.

On 15 December 2010 a further meeting was held at the Attorney General’s offices in Nigeria. The meeting was not attended by EVP or Malabu, but was attended by ENI/NAE and Shell. A new transaction structure was discussed at the meeting, which involved the FGN cancelling Malabu’s licence to OPL 245, re-issuing the license to ENI/NAE and Shell, and paying compensation to Malabu out of the proceeds.

Mr Obi attended a further meeting with the Attorney General on 17 January 2011 in Abuja. I accept his evidence that the Attorney General sent for Mr Obi specifically for the purpose of discussing EVP's fees; there was every reason why, in the context of the resolution of the problems relating to OPL 245, the Attorney General would have been keen to ensure that the sale or other disposal proceeded smoothly, without EVP attempting to create difficulties by blocking the sale or otherwise. Mr Obi's evidence was that he used the influence of his friends and associates in Nigeria in an attempt to ensure that EVP was not cut out of the envisaged transaction and in an attempt to create a situation where the Attorney General and "the Government people recognised that… they needed me in this transaction". In that respect he failed, however. Mr Obi’s handwritten notes of this meeting support EVP's case.

In cross-examination, Mr Graham attempted to suggest that Mr Obi’s notes of the meeting, with their cryptic reference to the Attorney-General saying “Adviser needs to finalise mandate with seller”, demonstrated that EVP indeed did not have any mandate from Malabu, as it had been terminated since 27 April 2010. As Mr Obi said in cross-examination, the fact that the Chief had, or may have, told the Attorney General that Mr Obi "didn’t have a mandate” was hardly surprising. The Chief's attitude by this stage was clearly that he was reluctant to pay anything to EVP under the EVP Exclusivity Agreement and such a statement made by him did no more than reflect his reluctance to accept that Malabu had any obligations to EVP under the terms of the agreement. Such a stance was consistent with the stance which he adopted throughout cross-examination in this case; including repeated allegations of blackmail and forgery as against EVP and others. The fact that such a statement was made however provides no serious evidential support as to whether the EVP Exclusivity Agreement in fact remained in force as at this date.

On 18 January 2011, Mr Obi had yet another meeting with the Attorney General, this time also with Mr Casula, to discuss the monies payable to Malabu, Shell’s conduct, the proposed settlement agreement, approval of the licence, fiscal terms and the proposed reallocation strategy.

I accept that EVP continued its efforts to achieve a sale in early 2011 to achieve an improved offer from ENI/NAE. Mr Obi attended a number of further meetings with ENI/NAE representatives, including a number of meetings with Mr Casula. But I find that it was apparent to Mr Obi by this stage that EVP was being increasingly cut out of the transaction, not only by Chief Etete but also by ENI, who, no doubt in the light of the multi-party negotiations with Shell and the Attorney General, saw little need to deal directly with EVP.

I also accept that by early 2011 Malabu was coming under increased pressure from the FGN to resolve the position in relation to the disposal of all of its interest in the OPL Assets; that Malabu was told by the FGN that SNUD and ENI/NAE were keen to undertake a joint venture; and that the FGN was willing to accommodate that, as a minimum the FGN wanted a net profit of at least the amount of the signature bonus; and that Malabu’s position was that Block 245 was worth at least $2.2 billion. I am also prepared to accept that at a meeting between Malabu and the Attorney-General in early 2011, the Attorney General told Malabu’s representatives that the Malabu could "do" a deal for $1,092,040,000, being the maximum that SNUD and ENI/NAE were willing to pay to the FGN minus the Signature Bonus or face years more disputes with an uncertain outcome. He also said that Malabu’s relationship with Government could be damaged if a resolution could not be achieved, and that it was difficult to see how Malabu could pay the signature bonus and move ahead with the development in light of all of the disputes. I am also prepared to accept that the FGN put a certain amount of pressure on Malabu to do a deal at $1,092,040,000.

Malabu, through Mr Gbinigie, also had direct discussions with Mr Casula of NAE in January 2011 and wrote requesting an offer that was an improvement on those that had previously been made. However, no offer was made to Malabu by ENI. In addition, Malabu held some preliminary discussions with the Nigerian subsidiaries of the Korea National Oil Company, but these came to nothing.

Meanwhile, the settlement discussions with the FGN continued and, save as described above and below, neither Mr Agaev nor Mr Obi played any part in those negotiations.

Chief Etete did, however, meet with Mr Agaev again on a couple of occasions in Paris in the early part of 2011, and Chief Etete spoke with him fairly regularly. Mr Agaev asked how the settlement discussions were progressing and asked Chief Etete to keep him informed.

Mr Obi met with Mr Casula on 14 April 2011. Mr Casula gave Mr Obi a “status update” on the all party negotiations that preceded the 29 April 2011 Settlement Agreements. Mr Casula explained that the negotiations involved back to back agreements but was far from concluded, and that nothing had been signed. By this time Mr Obi was becoming increasingly concerned that the deal was proceeding without EVP's involvement, that both ENI and Malabu were trying to cut EVP out of the process, and that he was being lied to by ENI about progress. At the meeting he accused ENI of breaching the terms of the confidentiality agreement which it had signed with EVP, as well as accusing Malabu of breaching the terms of the EVP Exclusivity Agreement. In response to this accusation, Mr Obi recorded Mr Casula as saying that NAE had not breached its confidentiality agreement with EVP because “This is a separate transaction”. According to Mr Obi, such a comment was not surprising in circumstances where Mr Casula was keen to give the impression that ENI was not in breach of the agreement.

After the meeting, Mr Obi drafted a letter for Raiffeisen to send to NAE complaining about breaches and potential breaches of “certain provisions contained in the binding legal agreements executed bilaterally between EVP and some of the parties to the proposed transaction.” The letter reiterated EVP's entitlement to "fees [which] were payable by Malabu and were to be deducted from the proceeds of the said transfer of the OPL 245 assets regardless of the transaction structure ultimately adopted." Contrary to Malabu's submission, I find nothing surprising in the fact that Mr Obi instructed Raiffeisen to write to NAE in such terms or did not write to Malabu until 5 May 2011. Certainly I do not regard the terms of the letter or Mr Obi's explanation of his tactics in writing it in any way supportive of Malabu's case that somehow Mr Obi regarded EVP's commission as payable by ENI/NAE as opposed to by Malabu.

A further three-way settlement meeting was held, arranged by the Attorney General and held at his office in Abuja, on 11 April 2011. According to Mr Gbinigie’s evidence:

As I have already mentioned in paragraph 44 above, Malabu finally disposed of the OPL Assets by means of the 29 April 2011 Transaction. This involved the execution of three inter-related agreements as between variously two or more of Malabu, the FGN, NAE and the two Shell companies, SNEPCO and SNUD. The agreements were executed at a meeting in the Federal Ministry of Justice on 29 April 2011.The transaction was effected by the execution of three inter-related agreements as between two or more of variously Malabu, the FGN, NAE and Shell respectively. Again, as I have already mentioned, these comprised:

However an intermediate draft "Resolution Agreement" disclosed by Malabu, as part of its late disclosure, apparently dated sometime in December 2010, envisaged that Malabu would be a party to one composite settlement agreement to which FGN, Malabu, SNUD, NNPC, SNEPCO and NAE would all be parties, reflecting the earlier multi-party settlement agreement that had been drafted by ENI with EVP’s input and which I have referred to above. It can therefore be inferred that, at a comparatively late stage, and particularly following the additional risks presented by the Mohammed Abacha claim, ENI/NAE and Shell had cold feet about executing the same agreement as Malabu; and accordingly, Malabu was consequently removed as a party to the proposed agreement, but instead entered its own two-party “Block 245 Malabu Resolution Agreement” with the FGN.

In a press release dated 20 May 2012, the Attorney General stated as follows:

“In furtherance of the Resolution Agreement, SNUD and ENI agreed to pay Malabu through the Federal Government acting as an obligor, the sum of US$1,092,040,000 Billion in full and final settlement of any and all claims, interest or rights relating to or in connection with Block 245 and Malabu agreed to settle and waive any and all claims, interest or rights relating to or in connection with Block 245 and also consented to the re-allocation of Block 245 to Nigerian Agip Exploration Limited (“NAE”) and Shell Nigeria Exploration and Production Company Limited (“SNEPCO”).

It is therefore quite evident from the foregoing that the role played by the Federal Government, its agencies and officials in relation to Block 245 was essentially that of facilitator of the resolution of a long standing dispute between Malabu and SNUD over the ownership and right to operate Block 245. At all times material to the resolution of the dispute, the Federal Government was not aware of any subsisting third party interest in Malabu’s claim to OPL 245 and neither did any person or company apply to be joined in the negotiations as an interested party.

Government has overtime demonstrated its commitment to attract investment in the oil and gas sector of the economy and encourage genuine investors (local and foreign) by creating the enabling environment for their business to thrive. The resolution of the lingering dispute over Block 245 was in furtherance of that objective. Accordingly, the FGN, its agencies and officials should not be dragged into a purely commercial dispute between Malabu and its purported partners. It is also clear that the allegation of round-tripping levelled against the FGN is without basis and cannot be substantiated having regard the role it played as mere facilitator of an amicable settlement between two disputing parties over a long standing dispute with obvious economic implications for the country.”

The evidence at trial did not demonstrate the background against, or the context in, which this press release was issued.

In his evidence in the ILC arbitration. Mr Agaev described the revised proposal as follows. He stated that shortly before the end of January 2011, he was approached by ENI/Shell, and this revised proposal was then accepted by Chief Etete in March 2011. He described the new transaction as follows:

“The proposal involved replacing the SPA with a resolution document and, despite the new form of the transaction, the substance of the final outcome was the same, as Malabu was to receive $1.1 billion. During further negotiations with the active participation of the Attorney General’s team and agreement was reached as to the payment procedure, entailing the establishment of escrow accounts through which ENI and Shell would pay FGN and FGN would pay Malabu. On 3 March 2011, I met with Mr. Etete in Paris and discussed this proposal and verified his consent to it”

On 1 May 2011, a fax was sent from EVP to Chief Etete, which was later forwarded on 5 May to the Bristol Hotel. The letter was addressed to the CEO of Malabu and enclosed a draft of a letter dated 1 May 2011 which EVP wanted Malabu to send to EVP confirming that unspecified fees would be paid to EVP. The draft provided, in relevant part:

“As you are aware, Malabu is in the process of settling all outstanding claims in connection with the relinquishment of its interest in OPL 245 to the Federal Government of Nigeria (the “FGN”) by way of a series of settlement agreements to be executed by various parties including Malabu and the FGN (collectively referred to as the “Settlement Agreements”).

Pursuant to the contractual agreement between Malabu and EVP dated January 27^th 2010 (the “Exclusivity Agreement”) and the Addendum to the Malabu/EVP Engagement Letter dated July 15 2010, we are pleased to provide, in line with our recent discussions, a confirmation of the fees payable to EVP as full and final settlement of all fees and compensation due to EVP, for services rendered to Malabu, in connection with Malabu’s exit from its interest in OPL 245

We confirm that the fee payable to EVP, subject to EVP’s acceptance, is as follows:

1.

Malabu shall ensure that EVP is paid, as EVP’s fees, a lump sum of € {TBA} MM (TBA Euros) (the “Fees”) ...”

Mr Obi gave an explanation in cross-examination as to why the amount of the fee was left as “TBA”; he said that this was a final attempt on his part to reach a mutually acceptable amount in full and final settlement without the need for recourse to litigation. He said:

“So all I was doing here was saying: chief, I have a legal entitlement to US$200 million, that’s fine, what I’m trying to do here is to give you one last chance so we can agree a sensible figure, you know, with the range of the 100 and the 200 that I can be comfortable with before I start, commence to take legal action. So this was a last ditch attempt to reach a sensible figure between 100 and 200 that the chief could live with.”

I accept Mr Graham's submission that the terms of the letter are inconsistent with a previously binding agreement that Malabu would pay EVP an agreed fee of $200 million. If Mr Obi had seriously considered that such were the case, I have no doubt that the letter would have said something to that effect. What the letter would not have done is suggested that EVP was in fact only asking for the fee payable under the draft addendum bearing the date 15 July, which had been produced by Mr Obi at the Milan meetings in November/December 2010, discussed by both Mr Obi and Chief Etete at those meetings, and which had never been signed. Mr Obi’s explanation was not convincing in this respect.

A further email was sent by Mr Obi to Mr Gbinigie, and from EVP’s advisers, seeking payment of fees. No reply whatsoever was sent by Malabu or Chief Etete to these demands.

On 11 May 2011, Mr Obi forwarded a draft case outline, which he had prepared himself, to Raiffeisen that set out an anonymised précis of EVP’s case against ENI/NAE. The document did not refer to a $200 million fee, a fixed fee, or an oral agreement or variation. Whilst, given that it was prepared as a brief summary for lawyers, I do not regard the document as having the significance which Mr Graham sought to attach to it, I accept Mr Graham's submission that the absence of any reference to an orally agreed fee of $200 million is corroborative of the absence of any such agreement. However I do not accept that the terms in which the outline is drafted support Malabu's case that EVP had some sort of commission agreement with ENI/NAE or that EVP was working exclusively as an independent broker.

On 1 July 2011, Mr Obi e-mailed Mr Agaev in the following terms:

“As discussed I am preparing to take legal action with respect to my unpaid fee for EVP’s work on OPL245.”

Given your involvement in a-number of the key meetings I had with Etete, I would appreciate it if you could please confirm that the following details are correct to the best of your recollection or let me know if you have any differing recollections"

Paragraph 5 of Mr Obi's summary of facts was in the following form:

“Etete had insisted that I introduce him to at least one of my prospective investors. You will recall my concerns about doing this especially in the absence of a finalized EVP mandate. After you persuaded and reassured me, I took a representative of the investor to meet Etete at his Lagos house where we all had lunch together. You will recall that both you and Etete were pleasantly surprised and happy by the quality of investor that I had introduced. Following the meeting, Etete and I proceeded to negotiate and finalize the EVP mandate after having agreed a minimum fixed fee of $200 mm based on $1 bn of cash proceeds. Whilst you were not present, we had both independently confirmed this amount to you.”

On the same date, Mr Agaev e-mailed back in the following terms:

“Basically the facts in your statement are corresponding to my recollection of the facts. The only detail: the former Hilton Hotel is not in the suburbs, but in Paris, near Tour Eiffel. Upon checking once more all the facts, I shall send to you my statement of facts. There have been many important facts that happened in fall 2010 in Milano, where your role was crucial to keep the transaction alive and when the investor was ready to walk out... “

However, Mr Agaev never did respond with his "statement of facts" and it is quite clear from evidence which he gave in the ILC arbitration on 25 February 2013 (i.e. after the conclusion of the trial in this case) that he regarded Mr Obi's request for confirmation as an irritant and that he was not prepared to support the statement about the agreement of the $200 million fee at the Lagos meeting, in relation to which in any event he was not present at the critical time. Indeed he stated that “there are many lies.. in these documents".

In the circumstances I do not rely on Mr Agaev’s e-mail, as in any way supporting Mr Obi’s case in relation to the alleged agreement in relation to the $200 million fee or otherwise. Where I have relied on the other evidence given by Mr Agaev in the ILC Arbitration, I have specifically said so in the narrative of this judgment.

In the light of my factual findings as set out above, my determination of the issues is as follows.

As is apparent from the findings of fact which I have made above, I find that that EVP and Malabu did indeed conclude a binding written agreement in January 2010 in the terms of the EVP Exclusivity Agreement in the form contended for by EVP. I reject Malabu's various assertions that the parties were not ad idem as to its terms, that Malabu had not authorised the final version of the EVP Exclusivity Agreement or that it was a forgery. It did not appear that Chief Etete's allegations that he was blackmailed or forced to enter into the EVP Exclusivity Agreement formed any part of Malabu's case as presented to me. If, and in so far as, it might be said hereafter that such allegations did form part of Malabu's case, I reject those allegations as well. Apart from Chief Etete's wild and incredible allegations, there was no evidence to support such a case.

As is clear from my detailed findings of fact, as set out above, EVP has not proved that there was any such oral agreement by Chief Etete, on behalf of Malabu, to pay EVP a fixed success fee of $200 million. There was clearly discussion about the figure of $200 million but I reject EVP's case that Chief Etete ever agreed, in a contractually binding way, to this figure. In the circumstances, whether such an agreement was excluded by other provisions of the EVP Exclusivity Agreement does not arise.

As I have already found, Chief Etete’s evidence to the effect that there was a proposal by Mr Armanna that Malabu should assist in a fraud on ENI/NAE by agreeing to a proposal whereby $200 million should be diverted from the sale price paid by ENI/NAE for the benefit of certain ENI/NAE representatives and Mr Obi, was incredible and I rejected it. Accordingly I conclude that the EVP Exclusivity Agreement is not to be regarded as a fraudulent scam which gave no enforceable rights to EVP as against Malabu.

Likewise, in my judgment, there was no evidential basis to support Malabu's alternate case that, even in the absence of fraud, the reality was that:

“(1)

….EVP was indeed acting for ENI in relation to the possible disposal by Malabu of all or part of its interest in OPL245, with the result that the EVP Exclusivity Agreement was a sham which can give no rights to EVP as against Malabu;”

see paragraph 15(1) of Malabu's closing submissions.

Moreover any such analysis would be contrary to the express terms of the Confidentiality Agreement as between EVP and NAE which expressly stated that EVP was acting on behalf of Malabu. It was also belied by Chief Etete's own evidence which accepted that the EVP Exclusivity Agreement was a genuine agreement.

Accordingly I reject this argument.

Malabu's further alternative case, as set out in paragraph 15(2) of Malabu's closing submissions, that:

“from the end of April 2010 or subsequently, EVP was actually acting as an independent broker or intermediary trying to put together a deal between Malabu and ENI, without being retained by either side, but acting in the hope that it would be able to control the process sufficiently closely to be able to persuade Malabu and/or ENI to reward it by means of a spread or a commission.”

was dependent upon Malabu establishing that the EVP Exclusivity Agreement had indeed been terminated, which is the issue to which I next turn.

As is clear from my findings of fact set out above, I reject Malabu's case on termination.

Apart from what was said in the letter dated 18 February 2010, it was common ground that there was no document in writing from Malabu terminating EVP's mandate as from the expiration of the three months Exclusivity Period. In the absence of any written termination EVP's mandate continued automatically.

I have already set out above my conclusions on the facts in relation to the withdrawal of the letter dated 18 February at the meeting on 6 March 2010; and in rejection of Malabu's case that Mr Agaev agreed with Chief Etete on 27 April 2010 that the EVP Exclusivity Agreement had indeed come to an end and that Mr Agaev was authorised on EVP's behalf to waive a month's written notice of termination and to agree to such discharge.

Furthermore the evidence did not support Malabu's contention that the EVP Exclusivity Agreement was abandoned in July 2010 when Malabu decided that it wanted to sell 100% of its interest in OPL 245 (and not the 40% expressly provided for in the EVP Exclusivity Agreement). On the contrary, as I have found, regular meetings continued to take place between Chief Etete and Mr Obi throughout the summer and autumn of 2010 and Mr Obi and his retained advisers worked hard to procure an offer from, and negotiate draft documents with, ENI/NAE up to the production to Malabu of NAE's offer dated 30 October 2010 on the agreed basis that EVP was being retained to secure an offer for 100% of the OPL Assets. Nor is there any evidence to suggest that, whatever Chief Etete’s reluctance may have been about discharging Malabu's contractual obligations under the EVP Exclusivity Agreement, that agreement was consensually abandoned on 30 October or in early November 2010, following the rejection by Malabu of NAE’s offer.

Mr Graham presented detailed submissions as to why:

In particular Mr Graham submitted that:

In my judgment, the 29 April 2011 Transaction is to be regarded as a qualifying transaction which entitled EVP to a fee under the terms of the EVP Exclusivity Agreement (subject to the point raised by Malabu in relation to non-agreement as to the AMP, which I address in the next section of this judgment).

My reasons may be summarised as follows:

In circumstances where I have rejected EVP’s case as to a contractually binding agreement for a payment of a fee of $200 million, the issues arising in relation to EVP’s secondary claim accordingly fall for determination.

In paragraph 33 of EVP's Amended Particulars of Claim, it is pleaded as follows:

“In the further alternative, if no agreement was made as to the amount of the fee to be paid to EVP then a term is to be implied in any contract between EVP and Malabu that EVP should be paid a reasonable fee for the services provided to Malabu, such term being implied as a matter of business efficacy from the circumstances of the transaction and the conduct and communications of the parties as more particularly set out above”

In argument and in his written submissions, Mr Howard contended that, in the absence of an agreement for a specific fee, there was an implied agreement to the effect that EVP would be paid a reasonable sum for its services. Alternatively he submitted that there was an implied term in the EVP Exclusivity Agreement to that effect.

It was immaterial, Mr Howard submitted, whether one analysed the position as an implied term of the EVP Exclusivity Agreement (as varied or not) or as a fresh agreement that EVP would be paid a reasonable sum for its services, although Mr Howard preferred the implied agreement analysis. Such an implied agreement, Mr Howard submitted, was supported by the evidence as to the manner in which the parties had conducted themselves;

Mr Graham submitted that EVP's case rested on implication of a term in the original EVP Exclusivity Agreement that EVP would be paid a reasonable sum for its services, and he referred to the Amended Particulars of Claim, paragraph 55(1); but, he submitted, the implication of such a term was "flatly inconsistent with the express terms of the EVP Exclusivity Agreement, including, in particular the mechanism for fixing EVP's fee by reference to the AMP, the "For the Avoidance of Doubt" clause, clause 5.4, the "Entire Agreement" clause and the "Long Stop" clause. He submitted that it was not legitimate for an implied term to do violence to the express provisions of the EVP Exclusivity Agreement. In particular he submitted that, by its terms, the EVP Exclusivity Agreement was an agreement for a success-based fee where success depended upon achieving a spread over an agreed price. He submitted that the proposed implied term appeared to provide that EVP should receive a reasonable sum regardless of success, which was entirely at odds with the remuneration agreed in the EVP Exclusivity Agreement.

Mr Graham also rejected Mr Howard's analysis that an implied agreement could be inferred from the conduct of the parties. He complained that there had been no adequate pleading of such an agreement and that no agreement could be inferred from the conduct of the parties. He submitted that likewise any such agreement would be excluded by the express provisions of the EVP Exclusivity Agreement referred to in the previous paragraph.

Malabu also contended that there was no scope for the implication of any such implied term or implied agreement, on the grounds that at all relevant times EVP was acting on its own account as an independent broker, or alternatively retained by ENI/NAE.

I conclude that the correct analysis, on the basis of the contractual arrangements as I have held them to be is that there was indeed an implied agreement between the parties that EVP would be paid a reasonable fee for its services in the event that it produced an offer in relation to which it would have been entitled to commission under the terms of the EVP Exclusivity Agreement as varied. That implied agreement is to be inferred from the parties' conduct at, and following, the 6 March 2010 meeting and subsequent meetings, and, in particular, on their express agreement that the AMP mechanism (which was the contractual mechanism under the terms of the agreement for calculating EVP's fee) should not apply. Once that agreement had been reached between the parties, not only was it necessary to imply some sort of agreement catering for the calculation of EVP's fee, but such a term could no longer be regarded as being inconsistent with the express terms of the EVP Exclusivity Agreement as varied. I emphasise that my conclusion is not based on whether or not Chief Etete ever expressly stated "Malabu agrees to pay EVP a reasonable fee". Rather it is based on my finding that such an agreement is to be inferred from an objective assessment of the entirety of the parties' conduct in the period from 6 March 2010.

Further or alternatively, I also conclude, if it is necessary to do so, that it was an implied term of the EVP Exclusivity Agreement, as originally concluded, that, in the event that subsequently, by variation to the original agreement, the parties agreed not to utilise the AMP contractual mechanism for the purposes of the calculation of EVP's fee, or to defer the specification of the AMP until such time as an offer, or acceptable offer, was forthcoming, that EVP would be paid a reasonable sum for its services.

My reasons for rejecting Mr Graham's arguments can be summarised as follows.

There is nothing in Malabu's pleading point in relation to the implied agreement allegation. The Amended Particulars of Claim adequately signalled the point and it was addressed in both EVP's opening and closing submissions.

The express clauses of the EVP Exclusivity Agreement (the "For avoidance of doubt" clause and the "Entire Agreement clause") do not operate, in the particular factual circumstances of this case, to preclude an agreed oral variation to the AMP mechanism or the implication of an agreement based on conduct. Malabu had an obligation to agree the AMP, so as to enable the agreed contractual mechanism for the calculation of EVP's remuneration to operate. In circumstances where the parties expressly agreed that Malabu's obligation to do so would not be discharged in that way, it cannot lie in Malabu's mouth subsequently to contend that such variation was not effective because of the Entire Agreement clause or the For avoidance of doubt clause. The variation to the terms of the original EVP Exclusivity Agreement had been supported by consideration, namely EVP's agreement not to compel performance of Malabu's obligation to agree the AMP. Moreover, if necessary to invoke it, the principle of estoppel by convention would have precluded Malabu from relying on the entire agreement clause. This was essentially a case where the parties, from 6 March 2010, conducted their contractual relationship on the basis of an assumed and shared state of facts - namely that the previously agreed contractual mechanism for calculation of EVP's remuneration would not operate, but that some other mechanism would do so. In such circumstances the doctrine of estoppel by convention would have precluded Malabu from relying on the express contractual clauses, since it would be unjust for it to do so, having been relieved of the requirement to discharge its original contractual obligations in accordance with the prescribed contractual mechanism; see e.g. per Lord Steyn in Republic of India v India Steamship [1998] AC 878 at 913E. Thus there was no inconsistency between the express clauses in the EVP Exclusivity Agreement and the implied term/ implied agreement for which EVP contends.

Mr Howard submitted in paragraph 45.3 of EVP's closing submissions:

“The contrary conclusion is only supportable on the basis that the parties should be taken in their initial agreement to have anticipated the risk that they would not employ or adopt, and would agree not to employ or adopt, the mechanism and they have allocated the risk of that occurring to the service provider. This would mean that the parties would originally have agreed: that there was to be a mechanism for setting the fee to be obtained by the service provider (here, the AMP); that in the event that the mechanism was not agreed for whatever reason and/or the parties agreed not to employ the mechanism for whatever reason, the service provider would remain subject to the obligations and responsibilities imposed on him by the contract, but would have no entitlement to be paid at all. This conclusion is simply unreal. It makes no commercial sense. There is no basis to conclude that that was the position in this case. The contention should be rejected. ”

I accept that submission.

There was some debate in the written arguments as to the circumstances in which a subsequent oral agreement or oral variation can override the provisions of an entire agreement clause. Thus EVP submitted that the law was correctly stated in Spring Finance v HS Real Company LLC [2011] EWHC 57 (Comm), a decision of HHJ Mackie CBE QC. In paragraph 53 of his judgment, having drawn attention to

“the somewhat differing guidance given by the Court of Appeal in two decisions, World Online Telecom Limited v I-Way Limited [2002] EWCA CIV 413 and United Bank Limited v Asif, unreported, CA 11/2/00 ”,

HHJ Mackie CBE QC expressed the view that there

“could be an oral variation, notwithstanding a clause requiring that to be in writing, but that the court would be likely to require strong evidence before reaching such a finding.”

In the subsequent case of Globe Motors Inc and another v TRW Lucasvarity Electric Steering Ltd [2012] EWHC 3134 (QB), 2011-645, a decision of the same judge, HHJ Mackie QC confirmed his view as expressed in the earlier case and added:

“there may be more force in an argument to overcome the effect of art 6.3 [the relevant entire agreement clause] where, as Globe claims in this case the parties, without giving thought to the written contract, make significant changes to their basis of dealing.”

In an earlier skeleton argument dated 21 July 2011, served for the purposes of argument at the return date of the freezing injunction, Malabu similarly argued that the law was as stated by EVP:

“45.2.

Malabu will submit that though at first glance those authorities may appear not to be speaking with one voice, in fact they do. They are all consistent with the position being that such an Entire Agreement clause can of course be over-ridden when the evidence suggests that the parties intended to over-ride it, but that such evidence must be strong and convincing.

45.3.

The purpose of such clauses, is "not to prevent the recognition of oral variations, but, rather, [to prevent] causal and unfounded allegation of such variations being made.

45.4.

So here, Malabu is entitled to rely on the above Entire Agreement clause to prevent EVP from establishing a good arguable case for these purposes based on the causal [sic - but query - casual?] and unfounded allegations of Mr. Obi.”

So far as the entire agreement clause was concerned, the cases were not revisited by Mr Graham in his closing submissions.

The two cases before HHJ Mackie QC and the Court of Appeal cases of World Online Telecom Limited v I-Way Limited and United Bank Limited v Asif were all decisions on strikeout or summary judgment applications. None authoritatively decided what the relevant law was. Because both counsel appeared to accept that in appropriate circumstances an entire agreement clause can be overridden and that the enquiry was very much a fact-based one, I was not referred to whatever other authority there may be in relation to this issue. In such circumstances I do not consider that it is appropriate for me to decide the point, although, as at present advised, I incline to the view that there can be an oral variation in such circumstances, notwithstanding a clause requiring written modifications, where the evidence on the balance of probabilities establishes such variation was indeed concluded.

In many cases, such as United Bank Limited v Asif (where the relationship between the parties was a formal banking relationship) the factual matrix of the contract and other circumstances may well preclude the raising of an alleged oral variation to defeat an entire agreement clause. In others, the evidence may establish on the balance of probabilities that the parties by their oral agreement and/or conduct have varied the basis of their contractual dealings, and have effectively overridden a written clause excluding any unwritten modification. Such a situation might well arise in circumstances where, as in the present case, there are effectively only two individuals negotiating a variation to, and subsequently operating under, the terms of an unusual agreement in unusual circumstances. But the question whether the entire agreement clause has been overridden is necessarily fact-sensitive. This point is emphasised in the guidance given by Sedley LJ in World Online Telecom Limited v I-Way Limited at paragraphs 10-13:

"[10]…….In a case like the present the parties have made their own law by contracting, and can in principle unmake or remake it. Among other things, far from fettering their freedom of contract, Mr Nasir can legitimately say that a preclusive clause like clause 21.1 gives effect to that freedom. But as he also recognises in his argument no firm authority in this country closes the door upon fact-based arguments to the contrary. One reason may be that the principle itself is neither simple nor unitary. A consensual oral variation, after all, is also an exercise of freedom of contract. In his skeleton argument Mr Nasir has relied on the United States Uniform Commercial Code, section 2-209(2), which provides:

“A signed agreement which excludes modification or rescission except by signed writing cannot otherwise be modified or rescinded.”

[11] The previous position at common law in the United States, we are told, did allow the informal overriding of a written clause excluding any unwritten modification. Although this appears in its time to have been an American and not an English doctrine, it does to my mind illustrate well enough, in the absence of decisive English authority, that there is room for debate and movement on the question. Indeed, Mr Freedman QC in his skeleton argument, has been able to deploy both textbook and judicial support for a markedly more flexible approach than that taken by United States code.

[12] In my judgment it was a sufficient justification of the refusal of Mitting J to give summary judgment on the counterclaim that the law on the topic is not settled. Mr Nasir's invitation to this court on what is an interlocutory appeal to declare the law of England and Wales to be the same as that of the United States is an essay in optimism which is doomed, I am afraid, to disappointment. It is of no assistance to him, beyond that point, to show us the inconclusive correspondence about the revision of the 80/20 split. The appellant says this was neither evidence of a variation, nor did it amount to an unequivocal course of conduct. The respondent says that it was part, though not necessarily the whole, of both things. These are issues which plainly have to be tried out. They cannot be short-circuited by Mr Nasir's submission, powerful though it is, that to countenance any variation by parole or by conduct is to render any clause like clause 21.1 a dead letter.

[13] The reasons go further than this. I-Way have pleaded that World Online is estopped from relying on the prohibitory clause. No doubt because he did not need to do so the judge did not deal with that submission. But unless World Online can show it too to be an untenable pleading it affords a separate ground for letting their defence to the counterclaim go to trial. It may be that it should not have been pleaded in the claim, since one cannot sue on an estoppel; but it was certainly available in answer to World Online's counterclaim. Although Mr Nasir now argues that the evidence cannot sustain an estoppel by conduct, the fact that in their written argument in support of summary judgment World Online had to rely on a considerable body of contested evidence again demonstrates the unsuitability of the issue for summary disposal. Both issues – construction and estoppel – are capable in one measure or another of being fact-sensitive, the former in relation at least to the factual matrix of the contract, the latter in relation to transaction and reliance. …."

Accordingly I conclude that, despite the various express clauses of the EVP Exclusivity Agreement:

There was no dispute between the parties as to the law in relation to the implication of terms. In this context I was referred to recent authorities such as Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988, Mediterranean Salvage & Towage Ltd v Seamar Trading & Commerce Inc (The “Reborn”) [2009] EWCA Civ 532, [2009] 2 Lloyds Rep 639 and Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900. As Lord Hoffmann in the Judicial Committee of the Privy Council said in Attorney General of Belize v Belize Telecom Ltd (at [21]):

“ … in every case in which it is said that some provision ought to be implied in an instrument, the question for the court is whether such provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. …. There is only one question: “is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?”

In my judgment the requirements for implication of the relevant term are satisfied in the present case, given the background to the agreement or, on the basis of the analysis at paragraph 275(ii)(b) above, the varied agreement. Whichever of the various indicia for the implication of a term one applies, construed as a whole against the relevant factual background, the EVP Exclusivity Agreement would reasonably be understood to have provided for EVP to have received a reasonable fee, in the event that, by subsequent variation, the parties agreed not to apply the AMP mechanism. Looked at objectively, on my analysis of the facts, it cannot be said that the parties intended that nothing should be payable to EVP; what they intended was merely to depart from the contractually agreed AMP mechanism in circumstances where, as I have found, the understanding was that a fee would be agreed at a later date. As Mr Howard submitted, in that situation the law imposes an implied agreement to pay a reasonable fee.

Malabu's further arguments against EVP's implied agreement/ implied term case, namely that EVP was operating on its own account, as an independent broker (or on the account of ENI/NAE), or on the basis that there was no subsisting contractual relationship between the parties, do not arise in the light of my factual findings that the EVP Exclusivity Agreement was not terminated and that EVP was not acting on ENI/NAE's behalf.

In the light of my factual findings, this issue does not arise. Because its determination would raise a number of hypothetical questions (in particular as to the factual reasons why there was no contractual entitlement), I do not consider that it is appropriate or necessary for me to determine the issue on an alternative, hypothetical basis.

In the light of my finding that there was indeed an implied agreement / implied term to the effect that EVP would be entitled to be paid a reasonable fee, the only issue which now arises under this head is what is a reasonable sum for the court to award on the basis of the implied agreement/term. Accordingly I do not address the different question as to what would be a reasonable sum for the court to award on the basis of a restitutionary claim in unjust enrichment.

There was no dispute between the parties that there is an important distinction between: (a) the situation where the court has to determine what is a reasonable sum, in a case where a contract either expressly or impliedly provides that a reasonable sum shall be payable; and (b) the situation where the court is having to assess what is the appropriate figure to award a claimant by way of quantum meruit, in a restitutionary claim for unjust enrichment claim. In the former case, the assessment of such a sum will depend upon all of the circumstances, the objective being to ascertain what the parties to the contract would have considered to have been a reasonable amount. In contrast, the objective in a restitutionary quantum meruit assessment is to reverse the unjust enrichment of a defendant, with the measure of any award reflecting the benefit to that defendant of the services received.

The distinction between the two was explained by Lord Justice Etherton at paragraph 140 of the Court of Appeal’s decision in Benedetti v Sawiris [2010] EWCA Civ 1427, a restitutionary case:

"140.

It would be impossible to fault the careful and detailed analysis of the Judge if the legal issue was, as he posed it, to determine in the wide discretion of the Court what would, as between the parties, be a fair and reasonable sum to be paid by Mr Sawiris to Mr Benedetti for the services rendered by Mr Benedetti: ….. that, however is not a proper characterisation of the legal issue. Judicial decisions and academic commentary in recent times have clarified that a quantum meruit claim is a restitutionary claim for unjust enrichment. The amount recoverable by a claimant is the objective value of the benefit at the time of receipt, namely the price which a reasonable person in the defendant’s position would have had to pay for the services. It is to be contrasted with an express or implied contractual term to pay a reasonable amount for services provided pursuant to the contract. In such a case, the court can have regard to all the circumstances to determine what would be a reasonable amount as contemplated by the parties to the contract’. (Emphasis supplied.)

141.

The common law cause of action for a quantum meruit, like other restitutionary claims, was formerly perceived to rest on the theory of an implied contract. That theory was rejected implicitly in Lipkin Gorman v Karpnale Ltd [1991] AC 548 and expressly in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1994] 1 WLR 938. In BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783 Robert Goff J expressly characterised a quantum meruit claim for services as a claim, founded on the principle of unjust enrichment, which is concerned with restitution in respect of the benefit obtained by the defendant. The historical development and demise of the implied contract theory were described in Sempra Metals Ltd v Inland Revenue Commissioners [2007] HLUK 34, [2008] 1 AC 561 by Lord Nicholls at paragraphs [105] and [107] and Lord Walker at paragraph [174].

142.

In assessing an award of restitution in such a case, it is the defendant’s benefit which must be identified and valued. Concentration is on the defendant’s benefit rather than the expense, loss or other personal aspect of the claimant’s condition: BP at pp. 839-840. In Sempra Lord Hope said that, for restitution, it is the gain that needs to be measured, not the loss of the claimant; that the claimant’s remedy is the reversal of the defendant’s gain; and that the process is one of subtraction, not compensation: [28] [33]. That gain is to be measured objectively, that is to say, what a reasonable person would pay for the benefit in question; and so, where there is a market, by reference to market rates: BP at p. 840; Sempra at [45] [103], [116]."

Accordingly I approach the question that, for the purposes of EVP’s implied agreement/term case, the court has to approach the ascertainment of what is a reasonable sum, by reference to all the relevant circumstances in order to determine what the parties would objectively have considered to have been a reasonable amount and then award damages in that amount. I emphasise that the exercise of ascertaining what objectively Malabu and EVP would have contemplated was a reasonable amount, is a very different exercise from that which is required of the court in the context of a restitutionary quantum meruit claim. In the latter case the court has to ascertain the objective value of the benefit to the defendant at the date of receipt; in other words, what a reasonable person would pay for the benefit in question, and thus, where there is a market, by reference to market rates.

EVP's case was that, on the analysis of implied agreement, a reasonable amount for its fee was $200 million (which was equivalent to 15.3% of $1.3 billion or 18.2% of $1.1 billion). Alternatively, Mr Howard submitted that, even if the Court were not persuaded that $200 million represented a “reasonable fee”, nonetheless, in the unique circumstances of this case, a “reasonable fee” was a substantial, three-figure sum, well in excess of $100 million. Mr Howard submitted that $100 million represented a figure which Mr Obi was, when in a vulnerable position, prepared to accept for his services; that which the parties (or indeed the market) would have considered to be a reasonable sum would on any view be higher than such a low point. Alternatively he submitted that, if the matter were to be approached on a percentage basis, then, for essentially the same reasons, a reasonable percentage would be a double-digit percentage, well in excess of 10% (calculated by reference to a total transaction value of $1.3 billion).

Mr Graham, on the other hand, essentially focused his attack on rejecting the implied agreement analysis on the grounds that the express terms of the EVP Exclusivity Agreement in relation to EVP's fee entitlement, and the "For the avoidance of doubt" clause, prevented the implication of any term or agreement that "EVP would be paid a reasonable sum for its services." Accordingly he submitted (at paragraph 633 of Malabu's written closing submissions) that:

“ EVP is therefore not entitled to contractual damages assessed as a reasonable sum (quantum meruit) for the services provided. It is left to its claim (if any) in unjust enrichment. ”

(I have already dealt with this argument above.)

No doubt for this reason, Malabu's detailed submissions as to quantum addressed the issue on the hypothesis that EVP was (contrary to Malabu's submissions that there had been no unjust factor and no enrichment) successful in its restitutionary quantum meruit claim. On this basis, Mr Graham submitted that the appropriate measure was nothing like the $200 million claimed by EVP, but was an amount which had to be calculated by reference to the market value of these services provided by EVP to Malabu, which was a question for expert evidence. He further submitted:

“On the basis of Mr Moyes’ [Malabu's expert] evidence, Malabu submits that the claim should therefore be assessed at a figure of no more than US$7 million. Further, as (i) much of the work done by EVP was done on its own account (especially the engagement of Bayphase) and (ii) the work done by EVP was below the standard of a competent market professional like Moyes & Co, the award of quantum meruit must be discounted to reflect the diminished value of the services to Malabu."

Despite the fact that Mr Graham was addressing the quantum issues on what I have held to be an inappropriate restitutionary unjust enrichment premise, I have taken into account the evidence from Malabu's expert and Mr Graham's submissions in coming to my conclusion as to what objectively the parties would have considered to have been a reasonable amount. I have not taken into account, or made any discount for, Malabu's allegation "that much of the work done by EVP was done on its own account", since I have held that EVP was operating under the terms of the EVP Exclusivity Agreement and not as an independent broker. Nor have I taken into account or made any discount for the allegation that "much of the work done by EVP was below the standard of a competent market professional”, since this allegation was neither pleaded nor adequately put to Mr Obi in cross-examination.

In coming to my conclusion as to what is a reasonable amount, I have had particular regard to the following evidential matters:

In paragraphs 89 to 93 of Annex 1 to EVP's written closing submissions, EVP summarised the work which it claimed that it carried out under the terms of the EVP Exclusivity Agreement. I adopt that summary, as modified by me in the light of my factual findings, as set out below, for the purposes of my quantum calculation.

Following the conclusion of the EVP Exclusivity Agreement, during a period of almost one and half years, EVP allocated substantial time and resources in its attempt to achieve a successful disposal of Malabu’s interest in OPL 245. There was little or no challenge by Malabu to the fact that such work had indeed been carried out by EVP and its advisory team.

Whilst it is correct, in my judgment, to characterise the role played by EVP as a broker/dealmaker, the services which EVP provided in fact went significantly beyond traditional brokerage services. It is not necessary for me to rehearse in any detail the work carried out by EVP; a summary was set out at paragraphs 190 - 339 of Mr Obi’s First Witness Statement, which in general terms I accept. A detailed chronology of the work carried out by EVP was also annexed to Mr Obi’s First Witness Statement, which likewise - at least in broad terms - I accept. These accounts were supported by the extensive disclosure which EVP provided of communications between EVP and ENI/NAE and other potential investors and between EVP and the multiple sets of advisers that were instructed to assist in bringing the project to completion. I accept that a large amount of time and effort was spent on the transaction by EVP in the period from December 2009 to May 2011 and that the costs expended by EVP on the project, including the significant costs of retaining the professional advisory team, exceeded US$1.3 million. None of the work and none of the expenditure was challenged when Mr Obi himself gave evidence. However, when Dr Dharan gave evidence, Mr Graham sought to question the propriety of certain of the expenditure, on the grounds inter alia that some apparently related to money spent at nightclubs or at hotels. In the absence of the matter being expressly raised with Mr Obi in cross-examination, I am not prepared to assume that such expenditure was not properly incurred in connection with the project.

I find as a fact that the work carried out by EVP (in addition to the matters to which I have already referred to in earlier sections of this judgment) included (but was not limited to) the following:

I deal first with the expert evidence. EVP and Malabu each called an expert witness to support their case as to quantum.

EVP called Dr Bala Dharan Ph.D., CPA (“Dr Dharan”). He described himself in his first report as follows:

"I am a vice president at Charles River Associates ("CRA"), a global business, economic and litigation consulting firm. I am a Certified Public Accountant, and have a Ph.D. in accounting. I also hold a certificate in financial forensics (CFF) and am accredited in business valuation (ABV). I have thirty years of teaching, research and consulting experience in accounting and finance generally and also with respect to transactions in the energy industry. I have extensive experience acting as an expert in matters concerning corporate finance and accounting, valuation and investment analysis, due diligence, energy and utility industry issues, transactional and forensic analysis and quantum analysis. I have acted over twenty times as a testifying expert in accounting and finance matters, including the Enron and Parmalat litigation. I have also provided expert testimony in various international arbitrations in London, Geneva, New York and Houston. I have served as a consultant on several dozen other litigation and business consulting engagements."

Malabu called Mr Christopher Moyes (“Mr Moyes”), who is the founder and principal partner in Moyes & Co, a professional advisory firm that provides evaluation, strategic planning, investment advice, and assistance in finding funding for the natural resource industries and the power and petrochemical sector. He had a BSc in geology from the University of Western Australia and an MSc from London University, Imperial College of Science & Technology, and had over 40 years of industry experience. According to his report, he formed the group comprising Moyes & Co. in 1983, and since then has provided a wide range of consulting services to a variety of clients from super-majors to small international startups. He described the firm as having wide experience in US and international energy projects. He described the role of Moyes & Co as follows:

"3.3

The core of our professional advice is related to energy transactions, and to raising industry capital for small (less than $25million) and medium sized (less than $1billion) companies in the domestic and international oil and gas and mining industries, although we work for companies across the sector including the major international oil companies.

3.4

We provide a comprehensive range of professional advice covering most disciplines required for transaction management. These disciplines include geology, geophysics, reservoir, petroleum and surface facility engineering, economics and financial analysis including cross border tax analysis, and comparable transaction value.

3.5

We have extensive experience in international trade and regulations and are very familiar with the business climate in most oil and gas producing countries. Consequently, an important area of our business is advising corporations and investors on foreign legal and taxation regimes in connection with the oil and gas sector.

3.6

We maintain a proprietary database of energy projects, ownership, activity, business potential and risks, together with investment opportunities covering over 38,000 companies and more than 64,000 oil and gas related projects, integrating technical, geologic and engineering information, capital and operating cost data, and contract and foreign tax attributes, together with the details of 37,000 companies holding or providing services in those assets and over 72,000 professionals. Transaction analyses on 4,700 trades are also held in the database. This database provides a strong and deep understanding of industry activity."

Both experts gave their evidence in a helpful and objective way and I have no doubt that they were both doing their best to assist the court. The experience and expertise of the two men was somewhat different. In their joint memorandum both experts agreed that the factors which I have identified at sub-paragraphs 288 (i) – (v) above were relevant to a determination of a reasonable sum for EVP's services. In coming to my conclusion on the quantum issue, I have taken into account the evidence given by the experts not only in relation to these factors, but also more generally.

Dr Dharan accepted that he was not a broker or a dealer, with experience of working or deal making in the upstream oil and gas industry (i.e. exploration and production). However, notwithstanding that he was also an academic, he clearly had considerable experience in providing consultancy services to, and working with, companies operating in the upstream oil and gas industry. That experience included advising in relation to remuneration packages for executives and third parties. Contrary to the submissions of Mr Graham, I did not find Dr Dharan’s evidence in any way "untrustworthy". His report addressed both the wider quantum issues relevant to the implied agreement analysis and those relevant to the restitutionary claim. Thus Dr Dharan said that he had been instructed to prepare a report:

“on the quantum meruit/reasonable remuneration issues in the case, including (i) whether it is commercially plausible that the parties could have agreed to a fee of $200 million for EVP in this case, and (ii) if there is no agreement as to the quantum of EVP’s remuneration, whether the remuneration claimed by EVP is reasonable in the circumstances, and if not what would be reasonable remuneration in these circumstances”.

Dr Dharan concluded that a fee of $200 million could be regarded as a reasonable fee for the services provided by EVP. In his first report he said:

“Overall, as the above discussion shows, the total compensation earned or expected to be earned by a participant in a deal would depend on the specific value-contributing factors that the dealmaker provides and brings to the table and the circumstances. In a particularly complex transaction, the dealmaker’s fee could potentially be in the range of 15% to 20% of the deal value."

He did not consider that it was appropriate to characterise the services provided by EVP simply as "advisory services". In his first report he described EVP as a "dealmaker"; in his second report he elaborated this description by expressing the view that:

"For my part, I do not think that "advisory services'' is an accurate description of the role performed by EVP in the OPL 245 deal. ……. EVP was not merely "an adviser"; rather it was fundamentally engaged in an entrepreneurial venture in this transaction, more akin to that of a venture capitalist."

He did not agree with Mr Moyes' approach that there was a determinable market price for the services provided by EVP in relation to the OPL 245 deal based on the underlying premise that other parties, rather than EVP, could and would have provided the services which were provided by EVP. Based on his view of the evidence (which he accepted was a matter for the court), Dr Dharan pointed out that Malabu had not concluded arrangements with other dealmakers/advisers in relation to the transaction other than ILC, and that there were considerable difficulties facing Malabu in obtaining advisers prepared to act on the project, not least Malabu's lack of funds and reputational issues surrounding the circumstances in which the OPL Assets had been acquired and Chief Etete himself. In such circumstances Dr Dharan regarded Mr Moyes' view - that the situation was one where competitive market rates for advisory services would have applied, and that the parties would have agreed "Lehman formula rates" subject to a $7 million cap - as wholly unrealistic and inapplicable to this specific case. (The Lehman formula is a formula commonly used to describe a commission/success fee arrangement, for brokers, with a declining percentage commission rate applicable to higher tiers of value of the transaction asset. The total fee may sometimes be capped by agreement between the parties.) Dr Dharan expressed the view that, because of the high level of complexity, risk and difficulty attached to this transaction, the range and depth of challenge facing EVP and the nature of the services supplied by it, the transaction was highly unusual and completely unlike the example advisory mandates described in Mr Moyes' Report and that there was no likelihood that such fee arrangements would have been regarded as suitable in the present case. He pointed out that there was no fixed universal or common Lehman formula and that, ultimately, client companies and dealmakers or advisers agree to fee arrangements that fairly reflect the expected services provided. He also commented that EVP was not acting as an investment bank, and indeed had hired Raiffeisen as its own investment bank; moreover the fees which EVP had agreed to pay Raiffeisen under the terms of its mandate showed that the $7 million, which Mr Moyes considered was the appropriate fee, might not have even covered EVP's maximum fee exposure to Raiffeisen which did not make economic sense. He commented that a low capped fee of $7 million would be counterproductive for Malabu as it would not incentivise EVP. On the formula proposed by Mr Moyes the fee would be earned for a deal value as low as $660 million.

In his second report he reiterated the view expressed in his earlier report that there was a wide spectrum in the range of appropriate fees, depending on specific risks and complexity. Thus he concluded that:

“At the low end of the range of risks” the fee to the advisor might be as low as 0.1% to 1% of the transaction value. Continuing on the spectrum of deal complexity, the remuneration percentage for a plain-vanilla asset sale where multiple advisors compete to be the broker or investment banker to provide a commoditised investment banking services is likely to be based on the Lehman formula of the type discussed by Mr Moyes, and might range from 0.5% to 2.5% of the transaction value.

As another data point further to the right of the above examples in terms of deal complexity, I noted in my Report that underwriter fees for initial public offerings of shares of a small or medium-sized firm can amount to as much as 11 to 14% of the transaction value.

Finally, I noted in my Report that fees to the dealmaker in very complex/difficult deals with bespoke risks increasing complexity could potentially be in the 15-20% range.

As discussed earlier here, venture capitalists' transaction fees typically are in the 20% range as well. EVP should, at a minimum, in my opinion, be substantially higher than the 6% agreed by ILC for its role in the venture."

Dr Dharan expressed the view that the complexity and difficulty of the OPL 245 transaction were at the very high end of the scales which he had discussed. In his view, that factor, taken together with the “dynamics of the situation between EVP and Malabu (i.e. the extent to which Malabu needed EVP and EVP's services)" meant that EVP's reasonable fee as dealmaker would be in the form of a "slice of the action" fee of a co-venturer of around 20% of the transaction value. He accepted that the question, of how complex and difficult the OPL 245 transaction in fact was, was a question for the Court and that if the court were to take the view "that the transaction was not as complex and difficult, as it appeared to him and that Malabu's need for EVP was less great than it appears to me to have been, then the fee for EVP could be correspondingly lower but still a substantial slice of the transaction value.”

Mr Moyes has substantial experience of dealing with international oil companies in general, having spent 40 years in the oil and gas industry. His role, and that of his firm, was essentially as a provider of advisory services. Like Dr Dharan, neither he nor his firm had acted as a broker or dealmaker. His report primarily addressed the quantum issues on the basis of a restitutionary claim. Thus he said that he had been instructed;

“to provide an independent expert report regarding the market value of the advisory services said to have been provided by Energy Venture Partners Limited (EVPL) in relation to the possible disposal of all or part of the oil prospecting license, OPL245, a Nigerian offshore oil asset.

2.2

In particular, I am asked to consider what a party in Malabu’s position in 2010 would have had to pay in order to have an advisor provide services to it of the type that EVPL claims to have provided to Malabu.”

Mr Moyes' evidence was based on his own firm's experience. He essentially approached the matter on the basis that the services provided by EVP should properly be characterised as advisory services. He described how, in his view, the upstream oil and gas transaction advisory market place in which Moyes & Co. operates was extremely competitive; although fees and fee structures were typically kept confidential, there was a well-developed market for sell site transactions involving emerging markets oil and gas assets; typical fee ranges were well-known and understood by participants in the industry, by reference to which participants would pitch and negotiate bids. Subject to that proviso, he described various fee structures adopted in the industry for sell side oil and gas transactions. Although he occasionally came across odd arrangements that did not reflect standard industry practice, in his experience those appeared to involve an adviser who was a related party, or involved with a related party or parties to one or both sides of the transaction. He described that success fees were the norm for the established advisers which were active in marketing upstream oil and gas projects, as such a structure put the onus on the adviser to get the deal closed. He explained that typically success fees were calculated on the amount paid to the client, usually net of transaction taxes and other deductions from sale proceeds; success fees for Moyes & Co.’s current mandates had a range of 1% to 7.0%; the highest percentage of 7.0% was for a small project with an expected transaction value of under $10 million. He expressed the view that, in his experience, with larger transactions the practice was for brokers’ fees to be structured by reference to different "value tiers" that might be generated from the transaction; in such cases the lower "value tiers" attract relatively high percentages and the higher "value tiers" relatively low percentages. He explained that this "layered" structure where the percentage success fee decreases as disposal values increases was commonly referred to as "The Lehman Formula" and that, additionally, on the larger projects, fee caps were often agreed as a product of the competitive nature of the market. He said that, in his experience, fees of US$3 to US$7 million were substantial fees, even for large transactions, and that any advisory company seeking these in excess of such figure would lose projects to competitors willing to cap their fees. He set out a table of typical retainer and success fees according to expected deal size and nature of the transaction.

He disagreed with much of Dr Dharan's evidence; in particular, whilst he did not quarrel with most of the risks and issues that Dr Dharan had identified in relation to the sale of the OPL Assets, in Mr Moyes' view the reality was that the existence of such risks in relation to a transaction, such as the instant one, was not unusual and mainstream advisers were able to address them. In practice the risks were reflected in the low transaction prices applicable to such deals, but the consequence was that advisers did not receive larger fees, in absolute terms for such risky projects, even if the percentage success fees were higher.

Mr Moyes concluded by expressing the view that it was implausible that the parties would have agreed to a fee of $200 million "if they had reference to and were paying attention to market rates in the industry." He concluded that the market value of the services provided by EVP justified a fee of $9.7 million, reduced by application of a cap to $7 million. In this respect he said:

“the market value of the services said to have been provided by EVPL” in relation to OPL245 (an asset that has been de-risked, with wells confirming the presence of potentially significant oil discoveries), can be sensibly assessed using the Lehman Formula applying the following percentages: 3.0% of the first $50 million, 1.0% of the next $450 million and 0.625% of the value over $500 million. In addition, I believe this fee structure would have been subject to a fee cap of $7 million. I believe this is what a company in Malabu’s position would have had to pay in order to have an advisor to provide services to it of the type that EVPL claims to have provided to Malabu."

In circumstances where I was attempting to ascertain objectively what would be a reasonable amount as contemplated by the parties to the contract for services provided by EVP pursuant to it, the views of the experts were ultimately of limited assistance. That was because, as was common ground, I was entitled to take into account all the circumstances including, in particular, the negotiations between the parties. Nonetheless the expert evidence provided a useful insight into the experts' respective views as to the various levels of appropriate fees. In one sense they provided two different reference points from two wholly different perspectives.

Mr Moyes’ conclusion that a fee in the region of $7 million to $9 million was appropriate was squarely premised on the approach which he had been instructed to take to the issues involved. As I have already set out, he was effectively instructed to give his views on the basis that he was addressing a restitutionary unjust enrichment claim, where what was relevant was the market value of the services provided to Malabu. But because the exercise which the court has to carry out requires consideration of a far broader spectrum of factors, I cannot accept the conclusion which he reached that $7 million was an appropriate fee in the circumstances of this case. The basis upon which Mr Moyes was instructed to approach the quantum issue meant that he was looking at the problem through far too narrow a prism. Second, I found Dr Dharan's characterisation of the role played by EVP as a broker/dealmaker more accurate than Mr Moyes' characterisation of the role as merely advisory. However I did not accept Dr Dharan's yet more extensive characterisation of EVP's role as effectively one of venture capitalist. That appeared to me to exaggerate EVP's actual role.

Third, and perhaps more importantly, as Mr Howard submitted, Mr Moyes described a transparent and competitive market, in which competitive pressures (whether through lobbying and/or competitive bidding or general market knowledge, on the part of both service providers and service users, of market norms) operate to drive down fees. It was in that context that Mr Moyes expressed the view that the Lehman formula and fee cap should apply, because of the competitive pressures of the market place. But, as I have already held, in an earlier section of this judgment, because of the history of the acquisition of OPL 245, the disputes with Shell and the FGN, and the serious reputational issues surrounding Chief Etete, Malabu simply did not have easy access to the conventional market of brokers or potential purchasers to dispose of its only asset. Nor did it have the financial means with which to pay retainers or many of the other types of fee. Thus Mr Moyes' evidence did not really address the particular market context in which Malabu and EVP were operating. Mr Moyes fairly admitted as much in cross examination.

Fourth, as was also clear from his report and his oral evidence, Mr Moyes did not, or did not adequately, take into account the particular and unusual circumstances and risk factors surrounding the transaction and affecting Malabu. He took the view that such risk factors were not out of the ordinary and would not have affected the quantum of the fees for EVP's advisory services. Insofar as he did address these particular risks or factors in his report, I take the view that he under-emphasised them in coming to his conclusion as to the appropriate fee for EVP’s services. Of course it was a difficult path for an expert witness to tread, since the court is not assisted by an expert's comments on the factual matters which the court itself has to decide, but the basic premise of Mr Moyes' views were undermined by the narrowness of his approach.

For all the above reasons Mr Moyes' evidence was of very limited assistance in the task which the court had to perform.

Dr Dharan’s evidence was expressly directed at the extremely unusual circumstances of the case and in that sense provided more useful, but still limited, assistance to the court. Mr Graham subjected Dr Dharan's views, essentially, to two principal attacks in cross-examination: first, it was suggested that he did not have the relevant expertise to give an opinion on the subject; and second, it was put to him that the situation was not in fact as “risky, complex and difficult” as he considered it to be.

Whilst it was correct that Dr Dharan did not have direct experience as an adviser or broker or first-hand knowledge of the upstream oil and gas transaction advisory market, nonetheless his experience and expertise in the consulting field was sufficiently adequate and relevant to enable him to offer an expert opinion as to an appropriate remuneration structure and amount in the unusual circumstances of the case. Second, I considered that Dr Dharan's description of the transaction as one which "was at the extreme end of the range of complexity and difficulty’ was justified, and provided support for his view that a very substantial success fee was reasonable.

Nonetheless, I could not accept Dr Dharan's view that, in all the circumstances of the case, a fee calculated at a rate of 15 to 20% would objectively be regarded as a reasonable amount as contemplated by the parties to the EVP Exclusivity Agreement, as varied. Perhaps not surprisingly, he did not provide any satisfactory concrete examples or comparators to support his view that, if there had been no agreement as to the quantum of EVP’s remuneration, the $200 million claimed by EVP was "reasonable in the circumstances".

But I accept Dr Dharan's general evidence that transactions in the oil and gas industry can involve a wide range of participants from oil majors and governments to individuals, together with a wide range of advisers; that there is no set formula or mechanism for remuneration; that many transactions in assets in the sector are large, high-value and bespoke transactions; that the nature of the remuneration is highly deal-specific and the subject of individual negotiation, and can include remuneration that in effect affords the broker/dealmaker "a slice of the action". I also accept his view that, in a transaction such as the present case, and given the nature of the broker/dealer role undertaken by EVP, there would not have been any application of the Lehman capped formula referred to by Mr Moyes. I agree with Dr Dharan that the application of a fee cap of $7 million (which in accordance with Mr Moyes' formula applied once the transaction consideration reached $660 million) would have been unlikely, not least because it would have eliminated any incentive to EVP to increase the purchase consideration, in circumstances where Malabu clearly took the view that even the final cash consideration it received was too low. It would also, as Dr Dharan pointed out, have been commercially inconsistent with EVP's contingent obligations to pay Raiffeisen’s maximum success fee of €5 million and EVP's own expenses in connection with the transaction which amounted to some $1.3 million.

I also accept Dr Dharan's view that in the present case there were clearly applicable risk and other factors that supported EVP's remuneration being a higher (rather than lower) amount. Both experts accepted that there were geological and technical risk factors applying to OPL 245 because it was located on the southern edge of the Niger Delta in water depths ranging from 1700 to 2000 metres. Indeed Mr Moyes referred in his report to the fact that several companies, which might have had the technical and financial capability to invest in deep water oilfields, actually banned their employees from travelling to Nigeria. Thus I accept Dr Dharan's analysis and expert view that, in addition to the technical factors, the factors applicable to a determination of EVP's remuneration would, if established on the evidence, include the following:

Of course whether such factors existed was a matter for the court to determine on the evidence.

There was a substantial amount of evidence relating to the risk and other factors. I accept Mr Howard's submissions that the evidence does indeed establish the following matters which are relevant for me to take into account in looking at the value to Malabu of the services provided by EVP and the figure that the Court should award as a reasonable fee, as objectively contemplated by the parties to the contract. The matters set out below are, for the most part, matters which I have already found established in earlier sections of this judgment. I set them out here by way of summary in the context of the court's determination of an objectively reasonable fee, as contemplated by the parties to the contract.

So far as Malabu itself is concerned, to the extent set out below I accept Mr Howard's submissions that the evidence showed as follows:

So far as Mr Obi and EVP were concerned, the evidence established that Mr Obi, and therefore EVP, had attributes which were valuable to Malabu. Mr Obi had both Nigerian and Western credentials and connections, as well as Government and private sector experience and connections. He had a good relationship with ENI, and in particular, with the senior ENI staff who were newly arrived in Nigeria (Mr Casula and Mr Armanna). He had experience of dealing and working with, and relationships with, relevant Western transactional and legal advisers. He had experience of developing, negotiating and closing transactions of the size of a sale of OPL 245. He thus had the relevant knowledge, access, experience and capabilities to effect a disposal of OPL 245.

So far as the transaction itself was concerned, the evidence showed that:

All these factors informed my decision as to what objectively was a reasonable fee in the contractual context. They supported the proposition that a substantial fee would have been in the contemplation of the parties.

I have already set out in the chronological section of this judgment, my detailed factual findings in relation to the negotiations between the parties. For the purposes of my determination as to what, objectively in all the circumstances, would be a reasonable amount for EVP 's fee as contemplated by the parties, it is relevant to note the following headline points in the negotiations:

It is also relevant to take into consideration the fee agreed by Chief Etete with ILC, which was 6% of the disposal consideration, plus expenses. Both Dr Dharan and Mr Moyes agreed that ILC's fees were a relevant factor. The services which ILC provided were, I accept, in one sense less valuable to Malabu than the services provided by EVP, not least because they did not include sourcing the buyer or negotiating with and procuring an offer from that buyer. For that reason it seems to me that there is every reason to conclude that EVP 's fees should not be less than ILC's fees. However, beyond that, it does not seem to me to be appropriate to assess the appropriate fee for EVP by reference to ILC's fees since it has not been relevant for this court to explore the basis for the fee structure in the ILC mandate, or the work or role played by Mr Agaev pursuant to its terms. On a deal value of $1.1 billion, ILC's fees were $66 million; on a deal value of $1.3 billion, they were $78 million.

I also take into account the fact that on 31 May 2010 NAE paid EVP €500,000 by way of participation fee, which was said to be a payment relating to access to the data room, which went some way to meeting EVP 's expenses in relation to the transaction.

Taking into account all the above factors, I conclude that a reasonable amount for Malabu to pay EVP for the services which the latter provided pursuant to the EVP Exclusivity Agreement contract is 8.5% of the disposal consideration of $1.3 billion, which amounts to a sum of $110.5 million. My reasons for arriving at this figure are as follows:

In the alternative, if I am wrong to apply any uplift to the figure of 7⅔% proposed by EVP in December 2010, then the appropriate fee is $100 million.

Finally I turn to consider the issues which arise in relation to Malabu’s defence that the Secret Commission Agreement barred any contractual or restitutionary claim by EVP for commission.

As I have already held, in an earlier paragraph of this judgment, I am not satisfied on the evidence before me in these proceedings that Malabu has established on the balance of probabilities that EVP ever reached any binding commission agreement with ILC to receive one third of the 6% commission to which ILC was apparently entitled under the terms of the ILC Agreement. But since it was EVP's case that it had done so, I propose to approach Issues 11 and 12 on the basis that there was such an agreement ("the Secret Commission Agreement").

Given the length this judgment, and my views on the merits of Malabu's arguments in relation to this issue, I do not propose to address it in any detail. In my judgment, there was nothing in the express contractual duty of good faith (clause 2.4) or any of the other terms of the EVP Exclusivity Agreement, that imposed a fiduciary or contractual duty on EVP that would have rendered it a breach of such duties for EVP to have entered into the Secret Commission Agreement.

Moreover clause 3.3 of the EVP Exclusivity Agreement Clause 3.3 expressly entitled EVP to

“fully retain (without accounting to you) any and all fees or remuneration agreed with any third parties or potential investors in or buyers of the OPL Assets...’.

I accept Mr Howard's submission that, on the true construction of this clause, EVP was fully entitled to obtain and retain fees or remuneration from any third party, including Mr Agaev/ILC. The “or” makes it clear that the “third parties” in question are not “potential investors or buyers”; they are other third parties. The use of the word “any” has the result that the provision is of wide application.

Accordingly none of the consequences for which Malabu contended arose, even if, contrary to my conclusion, the Secret Commission Agreement had indeed been concluded.

Accordingly I dismiss Malabu's counterclaim.

In the light of my conclusion in relation to Issue 11, the answer to this question is "no".

It follows that:

I express my gratitude to both parties' respective teams of counsel and solicitors for the quality and detail of the extensive oral and written submissions. They have been an invaluable aid to the completion of this judgment. The fact that not all the evidential and legal points, comprehensively analysed in the lengthy written submissions, feature in this judgment, does not mean that they have not been considered, and taken into account, in reaching my conclusions.

There were also a number of other features which significantly contributed to the smooth-running of the trial and its conclusion within a reasonably short timescale, given the amount of evidence which was relevant. Perhaps most importantly, the extensive documentation and case materials, the authorities and daily transcripts were presented in a highly organised and easily accessible electronic format, with the result that, apart from reliance on hardcopy versions of the written arguments, and, to a limited extent, the disputed versions of the EVP Exclusivity Agreement, I was able to conduct what, at least so far as I was concerned, was a paperless trial. There can be no doubt that this enabled the trial to be concluded within the allotted timetable, and with the maximum efficiency. It also provided the considerable advantage, from my perspective, of being able to access the trial bundles electronically. I am grateful to the parties’ solicitors for the assistance which I received in this respect.