Supreme Court Orders BPE to Sell ALSCON to BFI Group

Eight years after the Federal Government refused to sell the Aluminium Smelter Company of Nigeria to BFI Group Corporation, the Supreme Court has ordered the Bureau of Public Enterprises (BPE) to execute the share purchase agreement with the company to enable the company pay the agreed ten per cent of the accepted bid price of $410 million within 15 working days from the date of the execution of the share purchase agreement.

In a judgment delivered last Friday, the five justices of the court unanimously agreed that there was a binding contract between BFI Group and the BPE which should be enforced.

The apex court also issued an order of perpetual injunction restraining BPE from inviting any further bidding for the sale and acquisition of ALSCON.

It also awarded the sum of N50,000 cost against BPE.

When told that the aluminium company had since been concessioned to Russal, a Russian company, Justice Afolabiyi Fabiyi who delivered the lead judgment said BPE should not have gone ahead to sell the company to Russal or any other company.

He also said that Russal should have refrained from buying the company when it was aware that BFI Group, which was chosen as the preferred bidder before BPE unilaterally frustrated the contract, was already in court to challenge BPE’s refusal to consummate the transaction.

Justice Fabiyi said: “The Respondent (BPE) must be made to appreciate the purport of the doctrine of lis pendens which is aimed at preserving the subject matter of litigation. Any extraneous body including Russal which buys the subject of litigation does so as its own risks.”

He noted that Russal was the second bidder whose bid sum of $205 million with conditionality was rejected by BPE. His lordship noted that the reason given by BPE for abrogating the contract was most unjustified and contrary to the agreement of parties.

He identified as the crux of the dispute the unilateral insertion of an offensive clause that the ten per cent bid price must be paid within 15 days of the receipt of the letter informing BFI Group that it had been selected as the prefer bidder whereas the initial agreement was that the ten per cent bid price should be paid within 15 working days of signing the Share Purchase Agreement while the remaining outstanding 90 per cent bid price was to be paid within 90 days.

According to Justice Fabiyi the reason given for abrogating the contract does not accord with the stipulations in Exhibit 5 –the pre-bid conference resolutions which expressly provides that payment of the initial ten per cent of the purchase price shall be made within 15 working days after the signing the share purchase agreement. He held that BPE had no power to unilaterally change the mode of payment of the bid price.

BPE had terminated the contract when BFI Group failed to pay the ten per cent initial bid price within 15 working days of the receipt of its letter. The apex court held that the reason given by BPE for terminating the contract was untenable in view of the various documents tendered in court which showed the agreement between the two parties.