A High Court judge today ruled in favour of JP Morgan, after dismissing Nigeria’s $1.7bn (£1.4bn) lawsuit against the bank, over claims it acted negligently by transferring $875m to an account linked to convicted money launderer and former Nigerian oil minister Dan Etete.
The ruling comes after Nigeria first sued JP Morgan in 2017, over claims the bank breached its duties by transferring millions to a company controlled by the former oil minister, during a long running dispute over the ownership of Nigeria’s OPL245 oilfield.
The lawsuit alleged that JP Morgan had been “grossly negligent” in sending $875m to an account controlled by Etete’s own company, Malabu Oil and Gas, despite “red flags” around the transaction.
Specifically, Nigeria had claimed JP Morgan had breached its Quincecare duties, which require the bank to ignore customers instructions, if those instructions are likely to result in fraud.
The country had also claimed it had been a victim of fraud, as it alleged the funds were later siphoned off to Etete’s “cronies,” after they were paid into Malabu’s accounts via three separate transactions between 2011 and 2013.
However, High Court judge Mrs Justice Sara Cockerill today dismissed Nigeria’s claim, as she ruled the country had failed to prove a fraud had actually taken place.
The payments came after European oil majors Eni and Shell struck a deal to buy the OPL245 offshore oilfield in 2011. Last year, a Milan court cleared both firms and their senior executives of any wrongdoing through their involvement in the sale of the Nigerian resource.
A JP Morgan spokesperson said: “This judgment reflects our commitment to acting with high professional standards in every country we operate in, and how we are prepared to robustly defend our actions and reputation when they are called into question.”
The Federal Republic of Nigeria said it is “naturally disappointed” by the judgement, as the country said it will be “reviewing it carefully before considering next steps,” according to the Financial Times. “The FRN will continue its fight against fraud and corruption and work to recover funds for the people of Nigeria.”
Helen Taylor, a legal researcher at Spotlight on Corruption, said the verdict comes as a “huge setback in the fight against corruption” as she argued the ruling will give “a free pass to banks who choose to ignore financial crime.”