Expertise in Sovereign Lending and International Payments

3 August 2022

In the case, Federal Republic of Nigeria v JPMorgan Chase Bank NA [2022] EWHC 1447 (Comm), Martello provided the banking expert witness, appointed on behalf of JPMC. Our expert had specific coverage banking experience in Sub-Saharan Africa and it was noted by Mrs Justice Cockerill that the Martello expert evidence was more “manifest” compared to FRN’s banking expert who “appeared to approach the question very much from a compliance perspective rather than a banking perspective”.

 

The claim related to three payments, connected to the 2011 settlement of disputes surrounding the Oil Prospecting Licence for a Nigerian oilfield (OPL 245). The payments, totalling approximately US$1billion, were paid out of a Depository Account held by the Federal Government of Nigeria (FGN) at JPMC between 2011 and 2013, on instructions conveyed by authorised officers of the FGN.

 

Following a change of government in Nigeria, the Federal Republic of Nigeria (FRN) claimed that the 2011 Resolution Agreements were corrupt and that, in making the related payments, JPMC was in breach of its Quincecare duty (i.e., the duty on a bank not to execute a payment instruction if it reasonably believes that this will facilitate a fraud on the customer).

 

The banking expert evidence involved opining on the relevance of numerous “red flags” alleged by the FRN as regards the possibility that the payment instructions were part of a fraudulent scheme on the account holder. This was a document-heavy case and, working alongside the legal team from Freshifelds and Fountain Court Chambers, Martello submitted two independent reports and a joint statement. The experts gave evidence in the High Court over a seven-week trial.

 

In her judgment, Mrs Justice Cockerill rejected the FRN’s claim and found in favour of JPMC on both key areas of the dispute: a) whether there was sufficient factual evidence that the payment instructions constituted a fraud on the FRN, and b) whether JPMC breached its Quincecare duty and was grossly negligent in making the payments. The judgment contains significant and valuable discussion related to the nature and scope of Quincecare duty and “gross negligence”.

 

The judgment can be found here: https://www.bailii.org/ew/cases/EWHC/Comm/2022/1447.pdf