01 Apr 2007 |
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A US-based Nigerian-managed firm that bided for and initially won the deal for the privatization of ALSCON has reacted cautiously to the decision of a US Court dismissing its lawsuit against RUSAL, its competitors whom the federal government handed over the company to recently.
The US Court in New York presided over by William C. Conner ordered March 23 that the case be transferred to Nigerian courts dismissing BFIG's case on condition that RUSAL submits to the jurisdiction of a Nigerian court.
RUSAL, on its website had claimed victory in its own reaction to the judgement saying the ruling is a vindication of its stand that the case was without merit. However the US Court did not rule on the merit of the case, but that Nigerian courts offer an adequate forum presumbly instead of the US.
In its reaction, BFIG, a US firm led by a Nigerian Niger Delta indigene, Dr. Ruben Jaja, said it was pleased with the ruling, but added that BFIG "continues to believe that it should be allowed to sue RUSAL in the US." Nonetheless Jaja said "we have succeeded in packing them together and will now ship them to Nigerian courts, and they must face the court."
And in a statement by its law firm, BFIG added that it will review the decision and evaluate its options before legally responding to the decision.
In its case against the Russian aluminum company, BFIG sought to claim damages of $2.8B from RUSAL for allegedly interfering with its contract with the BPE and violating an agreement previously signed between both bidders and the BPE.
BFIG, based in California filed the lawsuit against RUSAL for what it called "tortuous interference with contractual relations, tortuous interference with prospective business advantage, unfair competition, and conspiracy to commit fraud."
RUSAL had been declared winner of the ALSCON privatization deal after BFIG made the highest bid of $410M and RUSAL had made a bid for about $200m. But BPE alleged that BFIG did not come up to meet its contractual obligations after winning the initial open bidding on national TV. BFIG in turn denied arguing that it made all obligations and that the BPE refused to sign a Share Purchase agreement which was required.
The case is also in the Nigerian Federal Appeals Court where a ruling is being awaited. In dismissing the case from the US, Judge Conner ordered RUSAL to submit to its within 14 days from the time of the order-March 23- a stipulation its agreement to "submit to jurisdiction and waive service of process in a Nigerian court and waive any statute or other law of limitations that would otherwise apply under Nigerian law to any action hereafter brought by BFIG in a Nigerian court."
The US Judge then concluded that the case, brought before him, would be more convenient for the parties if it was brought before Nigerian courts.
In his ruling the Court opined: "the courts of Nigeria constitute an adequate alternative forum and that the applicable public and private interest factors mandate a dismissal of the action pursuant to the doctrine of forum non conveniens.
But the Judge then added that in order not to prejudice plaintiffs-BFIG-the dismissal is conditioned on defendant's-RUSAL-submitting to Nigerian courts in the matter.
Although observers say the ruling is not new in that a foreign court has determined that Nigerian courts are available to try the case, the conditions imposed on RUSAL is seen as unprecedented in that RUSAL had been mandated and compelled to accept the Nigerian trial of the case.
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