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Yar'Adua Is Not Serious About Probing NNPC - Jim Faulk



Mr. Jim Faulk

Mr. Jim Faulk is the president of Gulf-Petrec whose company lost at an Arbitration panel following a $50 Million bribe NNPC officials paid to the Arbitrators led by one Andrew Berkeley to secure favorable judgment. Documents showing the pattern of the bribe and those who gave and received the bribe money under the authorities of former President Olusegun Obasanjo and former Group Managing Director, NNPC, Mr. Gaius Jackson Obaseki have already been tendered at a U.S court where another round of litigation promises to open up can of worms. 

The litigation began with breach of contract by the NNPC and in compliance with the joint Venture Agreement, an arbitration filed first at the International Center for Settlement of International Disputes in Washington DC in 1998 and second in Switzerland an on to two US District Courts, and then the 5 th Circuit for the second time on 6 September 2007. It is now under review by the three Judges at the US 5 th Circuit Court of Appeals in New Orleans Louisiana. The decision is forthcoming at any time.

This case is a perfect example of what can happen to a Party that believes justice can be achieved through international arbitration. Unfortunately, there are too many opportunities for manifest corruption in the international arbitration system. As a result, International Arbitration is scattered with corrupt arbitrators preying on victims of disputes within the boundaries of corrupt countries such as Nigeria. The energy sectors of these countries create massive damages with agreements that contain arbitration clauses that command arbitration as the only way of resolving the dispute.

In this interview, Mr. Faulk wants President Yar’Adua to match his words with action by sanitizing the NNPC. Excerpts:

Q: President Umaru Musa Yar’Adua was in the United States recently where he promised to do all it takes to clean the corrupt NNPC. What do you make of such promises?

Faulk: I read a newspaper article today, ( December 14, 2007), referencing that “President Umaru Yar’Adua was in Washington DC yesterday (Thursday). The newspaper article indicated that it was his first meeting with President George Bush. The article quoted President Yar’Adua stating that he briefed the President Bush on his government’s efforts to anchor democracy on the rule of law, equity, transparency, accountability, and the fight against corruption. He added that he also informed Bush on his government’s zero tolerance for corruption. Yar’Adua wants Nigerians to understand that government’s adherence to the rule of law and transparency was imperative.

Rather than travel to the United States and profess “a zero tolerance on corruption” policy, “President Umaru Yar’Adua needs to stay at home in Nigeria and carry out his declarations in his own country. Results are what everyone is waiting for, and not lip action without results. Thus far the prosecution has been limited to second level dignitaries and officials. How does the President and the EFCC justify failing to investigate the Gulf-Petrec allegations against NNPC’s Sena Anthony and Prince Bola Ajibola? How has Sena Anthony avoided prosecution in other frauds committed by the NNPC when as NNPC’s Group General Manager Legal Division and Corporate Secretariat she is responsible for approving all the joint venture agreements and contracts between NNPC and other companies? If there is corruption connected to any contract that she approved, she must have been aware of it and received her share. 

If President Yar’Adua is serious and is not playing politics with our President Bush, the Gulf-Petrec vs. NNPC case, presents a golden opportunity for President Yar’Adua to practice what he decrees and prove that the Nigerian government actually has “zero tolerance for corruption” by investigating the case and, then, deciding what is in the best interest of Nigeria. The new regime needs to practice what it preaches and investigate and prosecute officials where undeniable compelling proof of bribery and corruption is available

Q. Do you think that the decision of the 5 th Circuit will be favorable to Gulf-Petrec?

Faulk : Petrec was well represented at the 5 th Circuit hearing, by Professor Bederman. He is well versed on appellate procedures and litigation and his knowledge of the case and argument before the court was exceptional and to the point.

The questions, comments and statements made by the Panel of Justices during the hearing indicated to me that the court was familiar with every aspect of the case. An Appellant or Appellee cannot ask for more than that of a Panel.

The court was responsive and understood the case and in particular the weaknesses of international arbitration that have, over the past few years, evolved into an incomplete solution for dispute resolution. Unfortunately, arbitration can be perverted to the point of providing corrupt countries with corrupt arbitrators who have a free hand in exploiting the system. I personally believe that this court is going to take advantage of this opportunity to teach the Nigerians a lesson in justice and in the name of justice, remand it to the Federal District Court in the Eastern District of Texas for trial.

Q. Has there been any indication on the part of NNPC to settle the case?

Faulk: In November we received an inquiry concerning settlement from Nigeria. The inquiry was in regard to the possibility of our having an interest in settling the case out of court? Our reply was “put it in writing and we will respond appropriately”, and that we would be interested, if the terms and conditions of the settlement are acceptable.

Everyone, including the NNPC, is aware that a reasonable out of court settlement, would save the NNPC from a billion dollars in damages up to and over $5 billion dollars in treble damages, under the US RICO Statute. It would also save additional losses amounting to over $800 million dollars on two Petrec vs. NNPC pending arbitrations. Taking this into consideration, we thought that it would seem likely that the NNPC would be petitioning to settle this case now and cut their losses and lessen the collateral damage to their already tarnished reputations.

Q. Is there a chance of a settlement, before Christmas?

Faulk: A Settlement by Christmas is not likely since we have not been contacted by anyone in that regard since November. We further do not believe that the Nigerians are serious and we have cooled off on any possibility of ever settling with NNPC, but in the interim if we win in court, we will be happy to take the $5 billion dollars.

A favorable decision by the 5 th Circuit will provide us with reasonable litigation financing that will give us more than enough money to finance the trial and, immediately, file the two pending arbitrations.

Our position is that it will be much more profitable for us to take the litigation and arbitrations to the end rather than settle the case out of court. Presently, our only option is to fund the balance of the case and the two arbitrations. Contrary to the defendants we are not greedy and even though there is a strong possibility of receiving several billion dollars by trying the case, we prefer settlement if it is reasonable.

If NNPC or their lawyers have any doubt that we have corroborated evidence proving conspiracy, bribery, forgery and fraud, they need, only, to visit the PBN website and review the forensically authenticated correspondence back and forth between the NNPC Officials, the Arbitrators, and their lawyers. 

Q. Will you be interested in settlement if the 5 th Circuit decision is favorable?

Faulk: Yes, but we will be much less generous with the number we presently have in mind. It would suit us to reach a settlement before the 5 th Circuit decision and we would be much more reasonable than after the decision. It is outrageous that the Nigerians are actually ignoring the possibility of losing over 6 billion dollars of the Nigeria’s money. 

If we go to trial it is likely that we will receive a judgment under RICO of treble damages and as a result we could receive several billion of dollars. This would be an expensive lesson for Nigeria to have to “cough up” $6 billion dollars in damages because they chose to ignore settling the case. You can send a message to the Nigerians that the settlement price is going up the nearer it gets to Christmas and/or the decision by the 5 th Circuit.

Q. How do you feel now that the case is coming close to the end?

Faulk: Let me make it clear to everyone that this case will only end if there either a settlement or the 5 th Circuit dismisses the case. When the arbitration began in 1998, I was 63 years old. I am now 72. My sons have gone forward with their lives in their own professions. We are relieved that one way or the other it will either end or if remanded it will start over under a completely different atmosphere here in the US. With jurisdiction established in the Eastern District of Texas, the Nigerians will face US Justice. The corruption of this arbitration and continuing litigation has cost our family nine years of our lives. I will refrain from any particular predictions until the case is either settled or a final judgment is reached by the court. Justice has its alternatives and if justice goes our way, we will review those alternatives at that time and proceed accordingly.


Q. We have reviewed all of the evidence provided Gulf-Petrec by the Nigerian Whistleblowers. This evidence confirms that Sena Anthony, Prince Bola Ajibola, Andrew Berkeley with the help of some unscrupulous lawyers are each guilty of their part in this bribery and corruption of the arbitration. If given the opportunity, will you prosecute them?

Faulk: Presently,we only havejurisdiction to prosecute Sena Anthony, but will review our available options under the Civil RICO accumulation of “predicate acts’ perpetrated by the defendants. Both the UK and Belgium have laws that provide substantial penalties and optimum opportunities for prosecution of their citizens for committing crimes outside their countries.

There are no refunds on the years we have lost, and there is no amount of money that will replace them. When the time is right, I will be pleased to share what is in store for these corrupt individuals. The arbitrators were paid over $200,000 dollars is fees by the parties for an impartial ruling. Instead they chose to disgrace their profession and their families by accepting a bribe.

Q: If the case is sent back to the District Court for trial, how will the Gulf-Petrec lawyers proceed?

Faulk: 1) It is up to our counsel to make that decision, but I anticipate a criminal complaint will be filed immediately against NNPC’s Group General Manager Legal Division and Corporate Secretariat, Sena Anthony for forgery and the filing of fraudulent documents with the court. The forged fraudulent documents are on file with the court but the case was dismissed before we could file a criminal complaint. A remand will re-open the opportunity to file numerous causes of action.

2) Appropriate motions for default judgments will be filed on all three arbitrators who were properly served summons to appear in court, but failed to answer the charges. Failing to answer the charges not only confirms their guilt, but at the same time provides grounds for us to file the motions for a default on Andrew Berkeley, Ian Meakin and Johanne Van Houtte.

Consequences of the case being remanded will cause the NNPC and the individual defendants to face discovery under the US Federal Rules of Civil Procedure (FRCP). Discovery will provide answers to many questions that have haunted all of us for the past nine years.

Discovery is the pre-trial phase in a lawsuit in which each party through the Federal Rules of Civil Porcedure can request documents and other evidence from the other parties or can compel the production of evidence by using a subpoena or through other discovery devices, such as requests for production and sworn depositions. US discovery is devistating to Parties involved in numerous questionable activities relating to a case in front of a US court because it has the complete support of the court along with its penalties.

An example of these penalties is covered in Rule 37. Of the FRCP “Failure to Make or Cooperate in Discovery; Sanctions”

In case a party does not respond to a discovery request, this rule allows sanctions to be placed upon them. In objecting to a discovery request as proclaimed, a party must write back to the requesting party their reasons for not answering. Both parties are then required to confer in good faith to reach an agreement. Failure to do so can result in fines for the offending party. Failing an agreement, the original party requesting the information must then petition the court for an order to force the other party to answer. These orders are in most cases automatically granted. Should the other party still refuse to answer, it may be fined, have its evidence prevented from being admitted, or have its claim dismissed partially or entirely. If remanded, this will be the manner in which we will proceed.  US discovery is good for the innocent and bad for the guilty.


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