Supreme Court Unfreezes Nestoil, Neconde Assets

The Supreme Court has set aside a Court of Appeal order that froze the assets of Neconde Energy Limited, Nestoil Limited, and two other entities over an alleged $1.1 billion indebtedness to FBNQuest Merchant Bank Limited and First Trustees Limited.

In a judgment delivered on Monday, the apex court ruled that the appellate court exceeded its jurisdiction by granting an ex parte application against the companies, effectively restoring control of their assets and operations pending the determination of the substantive case.

Supreme Court Faults Appeal Court’s Actions

Delivering the lead judgment on behalf of a five-member panel, Stephen Adah held that the Court of Appeal acted beyond its powers when it entertained and granted orders affecting the companies.

The Supreme Court ruled that the appellate court improperly assumed jurisdiction over the matter and issued injunctive orders against Nestoil and Neconde despite the dispute not being properly before it.

The apex court further criticised the appellate court for granting a stay of proceedings in a case already pending before the Federal High Court in Lagos, describing the action as a misuse of judicial process.

According to the judgment, the proper venue for determining the issues raised by the parties remains the Federal High Court where the substantive matter is being heard.

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Dispute Centres on Alleged $1.1 Billion Debt

The legal battle stems from debt recovery proceedings initiated by a consortium of lenders led by FBNQuest Merchant Bank and First Trustees.

The lenders are seeking to recover debts allegedly owed by Nestoil and Neconde Energy under financing arrangements linked to oil and gas assets and operations.

According to court records, Nestoil was previously placed under receivership following an order of the Federal High Court over an alleged debt estimated at $1.01 billion and N430 billion.

The lenders subsequently moved to take control of certain assets as part of efforts to recover the outstanding obligations.

Conflicting Court Orders Escalated Legal Battle

Following the receivership order, Nestoil, its affiliate Neconde Energy, and their principals secured a separate injunction from another high court directing the receiver to suspend further actions.

The legal dispute became more complicated when the receiver later regained possession of the assets after the Court of Appeal granted a restorative injunction through an ex parte application filed by FBNQuest Merchant Bank and First Trustees.

The conflicting court decisions created uncertainty over the control and management of the affected assets, prompting the matter to be escalated to the Supreme Court for final determination on the procedural issues.

Judgment Restores Assets, Operations

With the Supreme Court’s decision, the order freezing the companies’ assets has now been nullified.

The judgment effectively restores full control of the companies’ assets and operations to Nestoil and Neconde pending the final determination of the substantive debt dispute.

Legal observers say the ruling reinforces the principle that courts must exercise jurisdiction strictly within the limits prescribed by law, particularly in matters involving ex parte applications and ongoing proceedings before lower courts.

The decision also means that any measures taken pursuant to the appellate court’s order can no longer stand.

Case Returns to Federal High Court

The Supreme Court’s ruling does not determine the merits of the alleged debt claims but instead focuses on the procedural validity of the Court of Appeal’s intervention.

As a result, the substantive dispute between the lenders and the companies will now continue before the Federal High Court in Lagos, where both sides are expected to present their cases.

The judgment returns the parties to the lower court for a full hearing on the debt recovery claims and related issues, while ensuring that the companies retain control of their operations until the matter is finally resolved through due judicial process.

Segun Lasisi

A Lagos-based journalist with a passion for disseminating factual information and a deep appreciation for good music, good food, movies, and beautiful cars. He hopes to travel the world someday, documenting its beauty and diverse cultures through his storytelling.