Court rules against Petrofac after group refused to pay consultant

A multinational company has refused to pay for consulting work it commissioned for advising on a potential contract in Saudi Arabia. According to court documents, Petrofac received an invoice for £14 million from Urbania International Management Consultancy, however it failed to pay up after the Serious Fraud Office (SFO) launched an investigation into Petrofac’s business.

Petrofac is an oil and gas services company headed by Ayman Asfari, an ambassador for the British Prime Minister – who holds meetings on behalf of the British Government while travelling overseas – and in court papers filed in Jersey, Urbania alleged that Petrofac refused to settle its bill after, pending an SFO investigation into the oil company’s activities. Petrofac argued the payment would not be “appropriate”, despite a services agreement stipulating that if Petrofac won a contract to supply work to the Fadhili gas programme in Saudi Arabia, Urbania would receive 1.25% of the contract’s value as a fee for its services.

Urbania’s services included assisting with the development of a winning proposal to secure the tender, as well as providing advice on regional requirements, market conditions and laws. Following the subsequent award of the contract to Petrofac, Urbania submitted its invoice to the company, and in May 2017, Paolo Bonucci, Group Head of Business Development at Petrofac, assured Amer Samhoun of Urbania that the company had “already started processing” the payment.

This was two days before the SFO announced its investigation into Petrofac; a result of a separate bribery and corruption investigation into the Monaco-based oil and gas services company Unaoil. Unaoil has denied any wrongdoing, and has no connection to Urbania, according to the Jersey court, however in light of the investigation, Petrofac informed Urbania that, “it is not considered appropriate, at this point in time, for Petrofac to authorise payments of Urbania’s outstanding invoice.”

Four days later, Urbania commenced legal proceedings against Petrofac, which asked that proceedings should be stayed before the dispute could be resolved by arbitration. The royal court sided with Urbania and declined to stay the proceedings.

Commenting on the outcome, Petrofac said, “This court decision related to a dispute on a point of Jersey law between ourselves and a provider of technical support services with whom we no longer have a relationship. We were disappointed by the outcome but respect the royal court of Jersey’s decision.”

Urbania’s lawyers meanwhile contended that the company “has no knowledge as to why Petrofac failed to make payment on time” and added there was no suggestion of any wrongdoing by its client.

The SFO has been investigating allegations of large-scale bribery in the oil and gas industry for two years, and in May last year this saw Asfari and its Chief Operating Officer, Marwan Chedid, arrested by the SFO and questioned under caution, triggering a share slide worth £630 million. While both were subsequently released without charge, Chedid has since left his position. Asfari, a famous political donor who – according to the Electoral Commission – has handed almost £700,000 to the British Conservative Party since 2009, retained his position as CEO.

Earlier this year, Petrofac hired Bain & Company to explore options for its North Sea business.