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Tuesday, April 7, 2020
Essar Exploration & Production Limited Mauritius (Essar Exploration) has filed a claim in the English High Courts against Shoreline Canoverseas Petroleum Development Corporation Limited (ShoreCan).
This legal claim relates to both companies’ respective interest in Essar Exploration and Production Limited (Nigeria) (Essar Nigeria).
ShoreCan is as a joint venture between the Canadian Overseas Petroleum Limited (COPL) and Shoreline Energy International Limited. COPL is listed on the London Stock Exchange and Canadian Securities Exchange.
The filing states that ShoreCan has committed a repudiatory breach of the Share Purchase Agreement and a material breach of the Shareholders’ Agreement, dated 17 August 2015.
The purpose of these agreements was for ShoreCan to receive 80% of the shares in Essar Nigeria, for an investment of USD$80 million. The remaining 20% of shares would belong to Essar Exploration Mauritius.
However, ShoreCan failed to provide the promised funding, and as a result, Essar are claiming damages of USD $63 million for the amount that it invested into this project.
The legal filing claims that as a result of this, both agreements are therefore terminated, and the initial transfer of shares by Essar Exploration to ShoreCan is void. This would require ShoreCan to transfer its shares to Essar Exploration.
Essar Exploration provided ShoreCan with more than adequate time to take corrective steps to remedy its defaults under the agreement and issued a notice of breach to ShoreCan in August 2018. Unfortunately, ShoreCan never took the necessary steps, and Essar Exploration have been forced to take legal action.
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