Niko loses in int’l court

An international court has thrown out Niko’s challenge against Bangladesh’s claim of $106 million in damages for twin blowouts at the Chhatak gas field.

Petrobangla Chairman Hossain Mansur on Tuesday broke the news to the media in Dhaka after receiving the copy of the ruling of the International Centre for Settlement of Investment Disputes (ICSID).

There is now no obstruction to moving on with the case the government had filed against Niko Resources Ltd in Dhaka District Judge’s Court.

“Now we are waiting for the verdict of the compensation case against Niko in a local court,” he said at a press briefing.

Measures would be taken to claim the damages if the court’s judgement came in favour, Mansur said, adding that Niko’s assets would be confiscated if necessary.

In July, 2010, the Canadian oil and gas company had moved the Washington-based international arbitrary institution against Bangladesh’s damages claim. It also stopped production of gas from Feni gas field in May same year.

Niko had filed two lawsuits – one on seeking payment on producing gas in the Feni gas field and the other questions the legality of the compensation case over the blowouts of the Tengratila gas field.

The hearing of the lawsuits took place on Oct 13-14, 2011, in London.

The ICSID, chaired by Michael Schneider, ruled that it had ‘no jurisdiction over Bangladesh, which therefore no longer be a respondent in this arbitration’.

Hossain Monsur said the court said Niko would have to come to it along with Bapex for the arbitration suit to be sustained since Niko and state-run Bangladesh Petroleum Exploration and Production Company (Bapex) formed the joint venture.

But, the chief of the state-run Bangladesh Oil, Gas and Mineral Corporation or Petrobangla added Bapex would not go to the ICSID.

Niko went into operation at Feni and Tengratila gas fields with their ownership under the joint venture agreement in 2003 with the Bapex which gave Niko an 80 percent share while the remaining 20 percent belonged to Bapex.

Petrobangla did not pay Tk 35 million in gas bill to Niko as the latter did not pay the compensation after Feni gas field was closed in 2010.

The Dhaka court in June 2011 fined Niko over charges of bribery. Niko had paid $9.5 million in fines at the time as punishment for bribing BNP State Minister for Energy and Mineral Resources, AKM Mosharraf Hossain in 2005.

Hossain quit his post on June 18 that year when bad press was heaped on Niko for a January explosion at the gas field.

It also admitted to bribing the junior minister with a $200,000 worth car and $5,000 -- a crime the judge of a Canadian court presiding over a case there called a “dark stain” on the heart of Canada’s oilpatch.

Petrobangla officials said there were two blowouts in January and June in 2005 at Tengratila gas field at Chhatak during gas explorations.

The then government lodged a money suit with the court against Niko in 2008 claiming Tk 7465 million ($106 million) as compensation over the blowout incidents. But Niko did not respond to the lawsuit.

Earlier in 2006, Bangladesh Environmental Lawyers Association (BELA) had moved the High Court challenging the legality of Bangladesh’s joint-venture agreement (JVA) with Niko and demanded the country pay the damages.

The public interest litigation subsequently drew an injunction order that had barred Petrobangla from paying the gas bills to the company until the compensation issue was settled.