A HIGH Court judge has ruled in favour of JP Morgan and dismissed Nigeria's $1.7bn (£1.4bn) lawsuit against the bank over claims it acted negligently by transferring $875m to a bank account linked to convicted money launderer and former Nigerian oil minister Dan Etete.

The ruling comes after Nigeria first sued JP Morgan in 2017 over claims the bank breached its duties by transferring millions to a company controlled by the former oil minister during a long running dispute over the ownership of Nigeria's OPL 245 offshore oilfield.

The lawsuit alleged that JP Morgan had been "grossly negligent" in sending the money to the account controlled by Etete's own company, Malabu Oil and Gas, despite "red flags" around the transaction.

Specifically, Nigeria claimed JP Morgan breached its Quincecare duty, which requires the bank to ignore customers instructions if those instructions are likely to result in fraud.

The lawsuit said Nigeria had been a victim of fraud, as it alleged the funds were later siphoned off to Etete's "cronies"

after being paid into Malabu's accounts through three separate transactions between 2011 and 2013.

However, High Court judge Justice Sara Cockerill yesterday dismissed Nigeria's claim, as she ruled the country had failed to prove any fraudulent activity had actually taken place.

The payments came after oil majors Eni and Shell struck a deal to buy the OPL 245 oilfield for $1.3bn in 2011. Last year, a Milan court cleared both firms and their senior executives of any wrongdoing through their involvement in the sale of the Nigerian resource.

A JP Morgan spokesperson said: "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."

A spokesperson for the Federal Republic of Nigeria said it was "naturally disappointed" by the judgement and said it will be "reviewing it carefully before considering next steps".

Spotlight on Corruption researcher Helen Taylor said the verdict is a "huge setback in the fight against corruption".

(c) 2022 City A.M., source Newspaper