Commercial Court awards reasonable fee of US$110.5 million

19/07/13

Judgment has been handed down by Gloster LJ in Energy Venture Partners Ltd v Malabu Oil and Gas Ltd [2013] EWHC 2118 (Comm).

The Claimant claimed to be entitled a fee from the Defendant, payable upon the disposal by the Defendant of an offshore oil concession in Nigeria. The Defendant was a company owned or controlled by Chief "Dan" Etete, who had been the Petroleum Minister under General Sani Abacha, the notorious military dictator and head of state of Nigeria through the mid-1990s. The claim was advanced on the basis: (a) that there was an express oral agreement as to the fee to be paid; alternatively (b) that the Claimant was entitled to a reasonable fee under an implied agreement / implied term; alternatively (c) that the Claimant was entitled to a reasonable fee by way of restitutionary quantum meruit.

In a very lengthy and detailed judgment, following a trial in November and December 2012, Gloster LJ concluded there was no oral agreement, but that the Claimant was entitled to a reasonable fee under an implied agreement / implied term, and determined that the quantum of that reasonable fee was US$110.5 million. In light of that conclusion, she did not consider it necessary to resolve the question of whether the Claimant was entitled to a reasonable fee by way of restitutionary quantum meruit.

The judgment was delivered, by coincidence, on the same day as the judgment of the Supreme Court in Benedetti v Sawiris (see news item here), another claim for a reasonable fee, but one brought exclusively on a restitutionary quantum meruit basis. The two cases illustrate the difference between a quantum meruit on an implied contract basis and an unjust enrichment basis. In this case Gloster LJ found that the Claimant had established an implied contractual agreement to a reasonable fee. Having established such an entitlement, the Court considered all the circumstances, including the parties' assessments of the value of the services (as revealed by discussions and negotiations between them); by way of contrast in Benedetti it was held that the parties' views of value were irrelevant, since on a restitutionary quantum meruit, which is designed to prevent unjust enrichment, the measure of recovery was limited to the objective market value of the service.

Another notable aspect of the case was that the Commercial Court sat in Paris for four days, following the submission a request under Article 17 of Regulation 1206/2001, which was granted by the French authorities. It did this to take the evidence of Chief Etete, who was barred from entering the UK. In a case in which issues of credibility were central, the Court considered it appropriate to hear the evidence live rather by videolink (and having done so, Gloster LJ concluded that Chief Etete was a dishonest witness, whose evidence could not be relied upon).

The judgment is here.