In what industry analysts referred to as a landmark decision in the oil and gas sector, the Honourable Justice Ojukwu of the Federal High Court, Uyo Division, on Tuesday, May 16, 2017 held that the imposition of fines by Regulatory Agencies was unlawful. The Court delivered this Ruling on a Motion filed by Mobil Producing Nigeria Unlimited in Suit FHC/UY/CS/1623/2016 – National Oil Spill Detection & Response Agency (NOSDRA) vs. Mobil Producing Nigeria Unlimited.
NOSDRA had instituted a suit against Mobil Producing Nigeria Unlimited (MPN) claiming, N10 million as penalty for the alleged breach of the NOSDRA Act and its Regulations. Mobil, through its Counsel, Prof. Fabian Ajogwu SAN, filed a Motion asking the Court to strike out the suit on the ground that NOSDRA lacked the inherent powers to impose fines. In upholding the arguments for Mobil as canvassed by Mr Ituah Imhanze of Kenna Partners, the Federal High Court held that NOSDRA acted outside its powers by imposing fines on Mobil without first approaching the Courts. The Court further held that the power to impose fines is a judicial or quasi-judicial power, which a regulatory body cannot exercise without recourse to Court. NOSDRA was represented by Mr. Charles Ateboh. The Court frowned against the absence of a platform for aggrieved persons to object to Fines imposed by NOSDRA under its Act stating that this oversight does not accord with the rules of natural justice and fairness.
By implication, the Federal High Court has essentially struck down the provisions of section 6(3) of the NOSDRA Act on imposition of fines, for violating the right to fair hearing which is guaranteed under the 1999 Constitution.