BACKGROUND

Petrec International INC. (Gulf Petro) in November 1998 filed Arbitration Proceedings against NNPC before the Chamber of Commerce and Industry Geneva.

The Subject matter of the arbitration was a claim in the sum of U$1.3 billion representing damages for a purported breach of contract by NNPC in respect of a joint venture agreement NNPC purportedly entered into with Gulf Petro in 1993.

ARBITRAL TRIBUNAL AND U.S. COURTS SUCCESSIVE DISMISSAL OF PETREC’S CLAIM OF US$1.3 BILLION

Gulf Petro’s claim of USD 1.3 billion against NNPC was dismissed by Arbitral Tribunal in 2001 as Gulf Petro was declared not to be legal entity at the time of entering into the contract with NNPC and therefore lacked the capacity to contract or maintain their claim against NNPC.

Gulf Petro’s appeal to the Swiss Federal Court, Geneva (seat of arbitration) was also dismissed in April 2002.

Gulf Petro on the same issues went to the US District Court Northern District of Texas, Dallas Division and the claim was further dismissed in 2003.

Gulf Petro applied for the reconsideration of the dismissal to the US District Court, Texas. Again, this was dismissed on January 5, 2004. Gulf Petro appealed the dismissal to the US Federal Court of Appeal 5 Circuit. Again, the Appeal Court dismissed the claim in December, 2004.

Not satisfied, Gulf Petro repackaged its claim and sued again in 2005. This time, with sensational and totally false allegations of conspiracy, corruption and bribery against NNPC officials and members of the Arbitral Tribunal. On March 15, 2006, the US District Court, Eastern District, Texas again dismissed the claim and allegations of bribery and corruption.

Dissatisfied with this, Gulf Petro instituted an appeal in 2006 at the US Court of Appeal of the 5th Circuit, New Orleans in another bid to overturn the Arbitral Award earlier made in favour of NNPC in 2001.

On January 07, 2008, the said US Court of Appeal ruled that the entire complaint was an attempt to set aside the Final Award and replace it with a modified Award. The US Court therefore dismissed the action and awarded costs in favour of NNPC.

NIGERIAN NATIONAL PETROLEUM CORPORATION
FEBRUARY, 2008