Firm asks court  to wind up  Summit Oil over debt

limited liability company, Seistech Energy Company Limited (applicant) has filed a petition before a Federal High Court sitting in Lagos, Southwest Nigeria, urging the court to wind up Summit Oil International Limited (respondent) an exploration and production oil company, on the ground that the company is insolvent and unable to pay its debt .

In a petition filed before the court by a Lagos lawyer Fidel Albert, on behalf of Seistech Energy Company Limited against Summit Oil International Limited, it was alleged that Summit Oil International company is a joint leaseholder and joint developer of Oil  Mining Lease (OML 142) formerly OPL 205 , in respect of Otien-1Field located in the Anambra basin on the North edge of the Niger-Delta. 

It  averred that the company was granted the Oil prospecting licence but could not develop the asset for about 20 years, due to severe constraints in cash flow.

It further averred that the company lacked certain basic infrastructure to transport the crude Oil and condensate from the production wells to truck loading gantries, as well as the facility for transporting the hydrocabon fluids preparatory to export.

Consequent upon this acute infrastructural deficiency and the technical know-how, the company contracted the Petitioner Seistech Energy Limited vide the provision of installation and construction order: Delivery line contract of April, 2017 for an end to end design; construction and installation of delivery line for the company including provision of six storage tanks. 

The applicant/petitioner stated that upon the completion of the contract, it issued its invoice to the respondent for the payment of the first tranche of the contract sum due in the sum of N11,868,703.75, representing 50% of the contract price payable as mobilisation and same was duly paid by the respondent.

However upon payment of the first mobilisation sum, the respondent refused/failed to make subsequent tranche payments as at when due to the petitioner, as per the contract agreement. 
Besides, the respondent did not dispute the petitioner's invoices but rather gave several promises to liquidate them, but however failed to do so till date. 

Upon failure to pay the remaining contract sum,  the respondent was therefore alleged to be indebted to the petitioner to the tune of N69,210,671.75, as at June 2018, which accrued to the petitioner as payment for the installation and construction of the respondent's Otien delivery line, including tank rentals associated with the work scope. 

The Petitioner averred that it has repeatedly made applications to the respondent for payment of its debt but the company has failed and neglected to pay same on account of insolvency and is unable to pay its debts to its creditors as the obligation falls due. In the circumstances, it is just and equitable that the company be wound up. 
Consequently the Petitioner prays as follows:
"That Summit Oil international Limited be wound up by this honorable court under the provisions of the Company and Allied Matters Act( CAMA) on grounds of its inability to pay its debts."

But in an affidavit in support of notice of preliminary objection sworn to by Tajudeen Jinadu, the Chief Financial Officer of Summit Oil International Limited and filed before the Court by the law firm of G. Elias and company, the respondent company averred that the dispute between the two parties regarding the amount to be paid in relation to the actual work done by the respondent is one which ought to be resolved by parties through negotiations as the applicant is aware of the clause of the contract which is dispute resolution clause  that mandates both parties to resolve any dispute under the contract by arbitration. Respondent argued that rather than initiating arbitral proceedings to enable the dispute be resolved as agreed in the contract, the applicant maliciously commenced this winding up proceedings against the  respondent.

The respondent stated that it is willing and able, to expeditiously proceed to arbitration the moment it is  referred to arbitration by the court or the respondent gives it notice of reference to arbitration. 

Consequently the company is contending that the court lacks jurisdiction to entertain the petition, as the petition constitute an abuse of court process,adding therefore that it will serve the interest of justice if the petition is struck out. 
Meanwhile the case has been  adjourned till September 26, 2018 for hearing. 

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