The Supreme Court has said that Shell Petroleum Development Company of Nigeria (SPDC) could appeal a judgment that directed the company to pay compensation for an alleged pollution of its host communities.

The legal dispute is currently delaying the oil giant’s efforts to sell some assets in Nigeria.

But the apex court allowed an application made by Shell’s local unit and its joint venture partner, the Nigerian National Petroleum Company Limited (NNPC).

Shell and NNPC are challenging a November 2020 ruling by a federal court ordering the Shell to pay N800 billion ($1.8 billion) to residents of the Niger Delta over an alleged oil spill.

“We believe in the merits of our case and are encouraged that the Nigerian Supreme Court is hearing this matter,” a spokeswoman for the Shell subsidiary said by email.

“We look forward to the hearing of our main appeal,” she added.

An appeal court ruled in March that Shell could not sell onshore and shallow water oil blocks it was trying to offload until its appeal against the compensation order is determined.

The oil major announced it was suspending the divestment process in June, pending the outcome of the Supreme Court case, Bloomberg reported.

However, the Supreme Court ruled that it had jurisdiction over the matter and would hear the substantive case. The court did not immediately set a date for the hearing.

The case started with a Federal High Court ruling in November 2020 that ordered Shell to pay the sum to communities of Egbalor Ebubu in Rivers State, who accused the firm of an oil spill that damaged waterways and farms. Presiding over the matter, Justice Rita Pemu, had earlier in the year, ordered that Shell Nigeria and its parent companies, should deposit the judgment debt of N8OO billion in an interest-yielding escrow account controlled by the court.

She also halted any further sale of the company’s onshore and offshore assets, pending the determination of the substantive appeal.

The court ordered that Shell: “Whether acting by itself or through its agents, officers, employees, servants, privies, representatives, subsidiaries or otherwise howsoever called or described from selling, allocating, vandalising and or disposing off any of its assets/properties including official structures, oil wells, oil fields, installations, vehicles, equipment, investments, offshore or onshore or any of its properties of Nigeria, pending the hearing and determination of this appeal.”

In the case between Chief Isaac Obor-Ntito Torchi & 87 others, the court urged the oil giant to deposit the said judgment sum into the court’s interest yielding account, pending the determination of the appeal.