Law News
Shell Nigeria Case to Set Legal Precedent in US Corruption Cases
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The much-awaited decision of the Texas Supreme Court in the case involving a former employee of Royal Dutch Shell, Mr. Robert Writt and the company over an allegation of bribing Nigerian officials for which Shell was earlier fined $30 million under the United States Foreign Corrupt Practices Act (FCPA) may set a legal precedent in corruption cases in the United States, THISDAY has learnt.

The United States Justice Department had in 2007 launched investigations into the allegation that Shell and a contractor had schemed to bribe Nigerian customs officials to drill offshore.

But Shell officials volunteered to conduct an internal investigation and submit its findings to the Justice Department, a measure companies usually adopt to get soft landing and ensure that the authorities reduce their penalties.

In a 129-page report submitted to the Justice Department, Shell was said to have accused Writt of approving and facilitating the bribes to the Nigerian officials, thereby violating the company’s ethics.

The report also accused Writt of providing false information to Shell’s lawyers about his role in the bribery allegation.

Following what the Justice Department perceived as Shell’s cooperation, the company was fined $30 million penalty, about half the amount that the company should could have paid if it was seen not to have cooperated.

Though the petroleum engineer was sacked, he was never charged to court for any wrongdoing.

Writt dragged Shell to a US court, accusing the company of destroying his reputation in an attempt to cover up the truth and minimise financial consequences it could suffer.

In a publication in The Texas Lawbook, which was seen by THISDAY, Janet Elliott wrote that Writt, who lives in Houston, argued in the court documents that he raised initial concerns with Shell senior managers about suspect invoices being paid to contractors working with Nigerian officials.

He also argued that he recommended that the company halt the payments, adding that Shell officials also approved his recommendation.

But unfortunately, according to him, Shell’s top officials reversed their decision and ordered him to resume the payments when Nigerian officials retaliated.
Shell argued in court that its report to Justice Department was covered by immunity as part of the government’s official investigation and Houston trial judge agreed and rejected Writt’s case.

But the court of appeal in Houston reversed it, saying Shell issued the report voluntarily and, as a result, did not qualify for absolute privilege or immunity.
Though Texas Supreme Court is not expected to announce its decision for several months, legal experts and business groups have argued that the defamation case could significantly affect future investigations into potential violations of the United States Foreign Corrupt Practices Act.

According to them, corporations will not cooperate with the Department of Justice or Securities and Exchange Commission investigations into global corruption if they can later be sued by the individuals they indict.

Six former US attorneys general are said to have also filed a legal brief with the state’s highest court arguing that a ruling against Shell could impede investigations.

Elliott also wrote that in oral arguments before the Texas Supreme Court three weeks ago, Justice Eva Guzman asked whether granting absolute immunity would encourage companies to falsely shift blame to an employee.

A partner at Baker Botts representing Shell, Macey Reasoner Stokes, told the court that this possibility could happen but added that the risk is “greatly outweighed” by the benefits of encouraging free and full disclosure from participants in the process.

A representative of the US Chamber of Commerce, National Association of Manufacturers and American Petroleum Institute, Mr. James Ho, also noted that “If left intact, the lower court decision may force employers to make the difficult decision not to disclose all of the details in relation to potential FCPA violations as soon as they are aware of them.”

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