JP Morgan Chase & Co won a $1.7 billion London court battle with the government of Nigeria over its role in the transfers of hundreds of millions of dollars to a former oil minister accused of corruption.
Nigeria’s government said a contract awarded by one of its predecessors to explore the deep waters off the Gulf of Guinea to Dan Etete was corrupt. But Judge Sara Cockerill ruled Tuesday the Nigerian government couldn’t show that it had been defrauded.
At a six-week trial, Nigeria argued that the US investment bank acted negligently when it transferred $875 million in funds between 2011 to 2013 from government accounts to Etete, who had been convicted of money laundering. The case examined the extent of a bank’s duty of care toward clients, and whether it should have halted payments even if that meant overriding assurances from government officials.
Nigeria alleged that the bank ignored “glaring” red flags, including “overwhelming” evidence of fraud and stark warnings from its own compliance staff when it authorized the payments. The West African nation was seeking damages of around $1.7 billion including interest.
It may be that “with the benefit of hindsight JPMorgan would have done things differently,” the judge said. “But again none of these things individually or collectively amount to triggering and then breaching” its duty of care to its client.
Judge Cockerill said that by the time of the 2013 payments, the bank was “on notice of a risk” of fraud. “There was a risk – but it was, on the evidence, no more than a possibility based on a slim foundation.”
“The Federal Republic of Nigeria is naturally disappointed by the outcome of the judgment and will be reviewing it carefully before considering the next steps,” a spokesman said. “The FRN will continue its fight against fraud and corruption and to work to recover funds for the people of Nigeria.”
“This judgment reflects our commitment to acting with high professional standards in every country we operate in, and how we are prepared to robustly defend our actions and reputation when they are called into question,” JPMorgan said in a statement.