The Supreme Court of Nigeria has annulled an order by the Court of Appeal that had frozen the assets of Nestoil Limited, Neconde Energy, and their principal promoters. The apex court ruled that the appellate court had overstepped its authority by issuing an ex parte application against the oil firms.
Presiding judge Stephen Adah stated that the Court of Appeal had assumed jurisdiction and granted an injunction when the dispute was not properly before it. The Supreme Court also criticized the lower court for misusing the judicial process in granting a stay of proceedings at the Federal High Court in Lagos.
The legal battle stemmed from efforts by FBN Quest Merchant Bank and First Trustees to recover debts reportedly exceeding $1 billion and N430 billion from Neconde and Nestoil, as well as their principal promoters, Azudialu Obiejesi and Nnenna Azudialu-Obiejesi. As part of the recovery efforts, Abubakar Sulu-Gambari was appointed receiver/manager over Nestoil and Neconde.
A Mareva injunction was initially issued by Justice Deinde Dipeolu of the Federal High Court, Lagos, freezing the companies' accounts and shareholdings across numerous financial and corporate institutions. Security agencies were also directed to assist in enforcing the receivership, which included taking possession of Nestoil’s headquarters and assuming control of Neconde’s interest in OML 42.
Following allegations of bias, the case was reassigned, and the subsequent judge, Justice J. Osiagor, revoked the receivership-enforcement order. However, FBN Quest Merchant Bank and First Trustees appealed this decision.
The Court of Appeal, in a ruling delivered by Justice Yargata Nimpar, subsequently issued a restorative injunction, reversing Justice Osiagor’s decision and restraining Nestoil, Neconde, and their agents from obstructing the receiver/manager pending the appeal hearing.
Earlier, on January 12, the Supreme Court had directed parties to return to the Court of Appeal to resolve a procedural issue concerning legal representation. The Court of Appeal had then disqualified lawyers representing Neconde and Nestoil, ruling that the receivership had suspended Mr. Azudialu-Obiejesi’s powers.
