First Bank Wins Appeal Against Obaigbena’s GHL Over Crude Oil Deal

The Court of Appeal has overturned the judgment of Justice S. D. Obile of the Federal High Court, which had earlier dismissed a case filed by First Bank of Nigeria Limited against General Hydrocarbons Limited (GHL), a company linked to media entrepreneur, Mr. Nduka Obaigbena.

According to information,the appellate court delivered its ruling in favour of First Bank’s appeal, which was argued by Senior Advocates of Nigeria, Babajide Koku (SAN) and Victor Ogude (SAN).

The legal tussle stems from a credit facility extended to GHL by First Bank, with proceeds from the sale of crude oil cargo aboard the FPSO Tamara Tokoni pledged as collateral. However, the bank alleged that GHL fraudulently diverted the funds, depriving it of repayment.

In its judgment, the Court of Appeal held that GHL indeed acted improperly in diverting the proceeds of the crude oil sales. The court consequently ordered the sale of the disputed crude oil cargo, directing that the proceeds be deposited with the court’s registry, where they will remain in custody pending the resolution of the substantive suit.

This ruling marks a significant turnaround in the protracted dispute, as Justice Obile had earlier dismissed the bank’s claims, effectively giving relief to GHL. The appellate decision now revives First Bank’s bid to recover the debt and reasserts the validity of the security tied to the crude oil transaction.

Legal analysts suggest that the appellate ruling underscores the judiciary’s willingness to protect creditors’ rights where loan securities have been compromised. It also signals heightened scrutiny of corporate conduct in Nigeria’s oil trading sector, where allegations of diversion of proceeds are not uncommon.

The case will now proceed to substantive hearing, with the court’s custody of the disputed funds expected to provide assurance to all parties pending final judgment.

Neither First Bank nor General Hydrocarbons Limited had issued an official statement on the ruling at the time of filing this report.