The Court of Appeal sitting in Abuja has set aside the judgment of the Federal High Court delivered on April 18, 2023 which reinstated Senator Ifeanyi Ararume as non-executive chairman of the Nigerian National Petroleum Company Limited (NNPC Ltd.) and also awarded him ₦5 billion in damages.
The appellate court in its ruling delivered on Tuesday, upheld the appeal filed by the NNPC Ltd., holding that the trial court erred in law and that the claims brought by Ararume were statute-barred, having been filed outside the period allowed by law.
Justice Inyang Ekwo of the Federal High Court, had declared the removal of Ararume from the board as “illegal, unlawful, unconstitutional, null and void,” and accordingly, ordered his immediate reinstatement, and awarded him the sum of ₦5 billion as compensation for wrongful removal.
The court also nullified all decisions taken by the NNPC Ltd board since his removal in January 2022, a verdict that posed serious legal and operational implications for the company.
Following the Federal High Court judgment, the NNPC Ltd. and the Federal Government approached the Court of Appeal and challenged the decision on several grounds, including lack of jurisdiction, improper use of originating summons, and that the case was statute-barred.
The appellants also maintained that the Petroleum Industry Act (PIA) 2021, which transformed NNPC into a limited liability company, vested the President with the authority to appoint and remove board members, and that such powers were lawfully exercised in Ararume’s case.
In granting the appeal, the Court of Appeal has therefore relieved NNPC Ltd of the ₦5 billion damages and removed the threat that all its board resolutions since 2021 were nullified.
The Court of Appeal’s ruling is seen as a major boost to the company’s corporate stability, protecting key decisions, contracts, and investments made over the last three years from legal uncertainty.
It remains uncertain if Senator Ararume will proceed to the Supreme Court to contest the Court of Appeal’s decision which represents a significant legal victory for NNPC Ltd as it would allow it to focus on its operational mandate without the shadow of a multibillion-naira liability hanging over it.
