The Federal High Court in Uyo has upheld the governance structure created under the Petroleum Industry Act (PIA) 2021 by striking out a lawsuit challenging the management of the NNPC/Mobil Producing Nigeria Unlimited (MPN) Joint Venture Emoimee Host Community Development Trust (HCDT).

In a landmark ruling, Justice C. S. Onah dismissed the suit filed by the Incorporated Trustees of Esit Eket Youth Association against the Trust’s trustee, Seplat Energy Producing Nigeria Unlimited (SEPNU), and four other defendants, holding that the association lacked the legal standing (locus standi) to bring the action.

The association had sought inclusion in the Trust’s decision-making process and requested access to detailed records of the statutory three per cent settlor’s contributions allocated to host communities in Esit Eket Local Government Area of Akwa Ibom State.

The court, however, upheld the preliminary objection raised by SEPNU’s counsel, Dr. Jude T. U. Nnodum Jr. of KENNA LP, who led a legal team comprising Abasiemediong Etuk, MCArb, and Olusegun Akeju.

Justice Onah ruled that the plaintiff was not among the entities recognised under Chapter III of the Petroleum Industry Act to administer or challenge the activities of a Host Community Development Trust and therefore lacked the legal standing required to maintain the suit.

The court also rejected the plaintiff’s argument that the case was a public interest action, stating that merely describing a matter as being in the public interest does not replace the need for a legally enforceable interest, particularly where the reliefs sought are intended solely for the claimant’s benefit.

Justice Onah further held that the suit disclosed no reasonable cause of action against SEPNU, finding no evidence that the company had violated any provision of the Petroleum Industry Act. Consequently, the suit was struck out for want of jurisdiction.

The judgment is expected to have significant implications for the administration of Host Community Development Trusts across Nigeria’s oil and gas sector.

Legal observers say the ruling provides important judicial clarification on the Petroleum Industry Act by affirming that only entities expressly recognised under the law have the legal authority to participate in or challenge the governance of HCDTs.

The decision is also expected to provide greater certainty for settlors, trustees and operators, including SEPNU, by reinforcing that the administration of Host Community Development Trusts must strictly comply with the statutory framework established under the Petroleum Industry Act.