Stakeholders: How court verdict voiding Ararume’s sack may affect economy

Some experts in the legal and energy sector have enumerated the possible implications of the recent court judgement that reinstated Ifeanyi Ararume as the board chairman of the Nigeria National Petroleum Company Limited (NNPC).

President Muhammadu Buhari had appointed Ararume, a former senator representing Imo north, as a non-executive chairman of the NNPC Limited, but later removed and replaced him with Margret Chuba Okadigbo — the widow of late Chuba Okadigbo, a former president of the senate.

In a N100 billion suit filed at an the Abuja federal high court, Ararume challenged his replacement on the NNPC board by Buhari.

Delivering the judgement on the matter, Inyang Ekwo, the presiding judge, ruled that Ararume be reinstated as a non-executive chairman of the NNPC, with all rights and privileges due to him.

The court also set aside all decisions made by the board after the removal of the former senator since January 2022 till date.

Speaking to TheCable the court ruling, Omowumi Iledare, a professor of petroleum economics, said the judgement will not have any major effect on the economy of Nigeria or the oil industry.

Iledare said he did not see Ararume being reinstated despite the court order.

‘‘I am not a lawyer but I believe the president has the power to appoint and fire. It is never unusual to nominate and withdraw a nomination. Looking at the Petroleum Industry Act, the nomination has to be ratified by the senate. I don’t think he can be reinstated,’’ he said.

In his submission, Tayo Bello, a professor of law and energy economics, re-echoed the sentiments of Iledare.

He said while the country’s economy will not be negatively affected by the court verdict, the federal government can appeal the judgement and a situation of status quo ante will be maintained.

‘VERDICT IS VICTORY FOR PIA’

However, Debo Fagbemi, an energy expert, said the verdict was a victory for the Petroleum Industry Act (PIA) as it had shown that it is no longer business as usual.

Fagbemi said the development has also revealed the possibility of the NNPC achieving its objectives since it will now be governed by the Companies and Allied Matters Act (CAMA).

He said the reinstatement of Araraume would be a positive development for the economy and the oil industry.

COURT ORDER MAY DISRUPT INVESTMENT DECISIONS

Also speaking on the issue, Muda Yusuf, chief executive officer (CEO) of the Center for the Promotion of Private Enterprise (CPPE), cautioned that the court verdict has the potential to disrupt major investment decisions.

Yusuf, who is also a former director-general of the Lagos Chamber of Commerce and Industry (LCCI), argued that the development may erode investors’ confidence who may see the NNPC structure as unstable.

He said Ararume could decide to work on the probability that the oil firm has not been fully subjected to operate as a commercial entity, which some stakeholders have suggested should be quoted on the stock exchange locally and internationally.

“You know that the NNPC is now a CAMA company and it is expected to operate with minimal political interference,” Yusuf said.

“There is a high level of corporate governance compliance expectations and the NNPC is expected to operate within the framework of the Petroleum Industry Act, (PIA).”

On his part, Johnson Chukwu, CEO of Cowry Asset Management Limited, said the verdict may not totally affect investment decisions made in the past, noting that the federal high court is just a court of first instance as the federal government could appeal the judgement.

The NNPC, Chukwu said, is purely operating as a commercial entity under the new law and cannot be subjected to political interference.

WHY FG SHOULD NOT APPEAL JUDGEMENT

Also expressing his views, Frank Tietie, a lawyer and executive director of Citizens Advocacy for Social & Economic Rights (CASER), a civil society group, said the federal government should not appeal the judgement in the interest of the company.

“It is important to allow the standard of the rule of law to prevail in the interest of the international obligations and transactions of the NNPC so as not to create a trust deficit in its operations,” Tietie said.

“The judgement of a court is presumed to be obeyed by all parties until it is set aside. In the absence of any stay of execution, the judgement must be obeyed.

“For the sake of the stability of the company, the newly reinstated non-executive chairman of the board of the NNPC may decide to ratify decisions of the board since his removal so as not to create a situation where the operations of the company would be affected negatively.”

‘A POLITICAL SOLUTION NEEDED’

Meanwhile, Abdul Balogun, a senior advocate of Nigeria (SAN), said the government has no choice but to obey the judgement of the court unless it decides to appeal it.

For Balogun, no obeying the judgement “will send the wrong signal to the international business community”.

The senior lawyer added that if the government feels it has a strong case, it can appeal the judgement up to the supreme court.

“But not obeying the judgement of the court is dangerous for the image of the country because it will send a wrong signal to the international business community. The government can’t afford not to obey the judgement, if it hopes to win investors’ confidence in the judicial system,” he said.

Similarly, Fidelis Amobi, a constitutional lawyer, argued that the ruling would have far-reaching effects on the operations of the company, noting that a political solution was necessary.

“Despite Ararume winning his case in court, I think a political solution should be deployed to resolve the situation that has been created by the judgement of the court. Otherwise, the government may not be able to manage the situation,” he said.

Earlier on Wednesday, Buhari said he would appeal the decision of the court to reinstate Ararume.