Alleged Contract Breach: Court to Rule On N5.74bn Macobarb Suit Against NLNG July 16

The Port Harcourt High Court has fixed July 16, 2025, to deliver judgment in a N5.74 billion legal dispute between Nigeria Liquefied Natural Gas Limited (NLNG) and indigenous contractor, Macobarb International Limited, over allegations of contract breach.

Presiding Judge, Justice Chinwendu Nwogu, set the date after hearing final arguments from both parties, who each submitted that the court should rule in favour of their client following the adoption of their respective written addresses on June 24, 2025.

Macobarb is seeking judicial relief on the grounds that NLNG allegedly breached the terms of their contract, which, according to the claimant, remains active and continues to incur costs now totalling N5.74 billion.

While adopting their final address, lead counsel to Macobarb, Benefit Vilokpo, submitted that the “Claimants have shown by their pleadings and documentary evidence that NLNG breached its terms of contract, and that Macobarb has demonstrated that the purported letter of termination dated 27th November 2015, is unlawful, null, and void”.

Vilokpo argued that the contract contained provisions for ‘Standby Payments’ and that the Claimants had successfully shown their entitlement to such payments.

In the final address, Vilokpo also framed key issues for the court’s determination, including: “Whether the Claimants proved their case as required by law to be entitled to the reliefs sought in this case (a. Whether the purported termination letter dated 27th November 2015 was valid in view of the of the contract Agreement).”

The Claimants’ position rests partly on the assertion that Emeka Ohiri, who issued the termination letter, was not recognised under the contract. Instead, the designated Contract Holder, Dweller Francis, was the authorised party, and the Claimants maintain that no termination letter was issued to them by Francis.

The Claimants’ counsel further pointed to specific sections in the final address highlighting provisions in the contract for ‘standdown’ time.

Another area for judicial consideration is whether NLNG complied with the terms of the Close-out Meeting stipulated in the contract.

Macobarb submitted that the contract remains subsisting, referencing a “Project Close-out Meeting” convened by NLNG on February 19, 2016. According to the Claimants, the meeting minutes tendered as Exhibit YJ 5 outlined that to finalise the contract, NLNG would assess the cost of materials delivered, demobilisation expenses, and prepare payment certificates for completed items.

The Claimants also urged the court to consider NLNG’s acknowledgement of receiving materials, including a 20ft container, as further evidence that the contract had not been properly concluded.

Lead counsel to NLNG, Prof. Bayo Adarelegbe, called on the court to consider whether the second Claimant was legally a party to the contract and therefore entitled to institute an action under it. Macobarb countered this argument in their address, pointing out that the court had previously dismissed that contention during the preliminary objection stage and even imposed a N200,000 cost against NLNG.

The NLNG counsel also raised for determination whether the company breached the contract as alleged, whether the contract was wrongfully terminated, and whether the Claimants are entitled to the claimed N5.74 billion.

During the adoption of addresses on June 24, 2025, the defence counsel urged the court to dismiss the Claimants’ suit, asserting that the termination was lawfully executed by the appropriate party. He maintained that the contract was for a lump-sum amount and that the Claimants’ claims exceeded the agreed value without legal basis.

In response, the Claimants’ counsel argued that NLNG had failed to challenge the figures presented by their forensic accountant, the Claimants’ principal witness, and referenced Supreme Court precedent supporting such a position.

Moreover, the Claimants contended that NLNG failed to propose any alternative or more reasonable figure in its Statement of Defence.

Both parties addressed the contentious issue of the ‘Performance Bond’. NLNG contended that the Claimants failed to submit the bond within 14 days, which justified the contract’s termination.

The Claimants’ counsel, however, maintained that the contract did not specify which party contractor or client was responsible for submitting the bond. Therefore, the alleged failure should be deemed a mutual deviation, which, under legal principles, should not attract a penalty.

Macobarb further noted that NLNG only demanded the bond 16 months after contract commencement and even submitted a sample at that time. They argued that this delay did not prevent the contract from running for 18 months, thereby weakening NLNG’s reliance on the bond issue.

Additionally, Macobarb pointed to what they described as an inconsistency in NLNG’s submissions highlighting that NLNG’s own final address stated that the contract was “coming to an end” by November 27, 2015, thereby implying it had not yet ended. The Claimants argued this amounted to a legal inconsistency.

The court is now expected to determine whether the Performance Bond was indeed fundamental to the contract’s validity and whether the termination was executed by an authorised individual under the agreement.

Macobarb also drew attention to their numerous efforts to seek an amicable resolution, including taking the matter before the Nigerian Senate—possibly to establish that their actions were not merely disruptive.

Ultimately, the court’s decision will establish whether NLNG owes Macobarb any money and if so, whether the sum amounts to N5.74 billion.

A notable moment during proceedings was when Justice Nwogu cautioned Macobarb’s counsel that any new legal authorities introduced during oral adumbration but not contained in the written address would not be considered. The significance of this sensitive case may influence future relationships between multinational corporations and indigenous contractors in how they handle disputes bow and in future.