Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The Supreme Court has delivered a landmark judgment in the protracted legal battle between General Hydrocarbons Limited (GHL) and First Bank of Nigeria, setting aside the orders of the Federal High Court and the Court of Appeal that had authorised the arrest and sale of crude oil cargo aboard the FPSO Tamara Tokoni. In a unanimous decision delivered on Friday, July 3, 2026, a five-member panel of the apex court held that the dispute between the bank and the oil company was purely contractual and did not qualify as an admiralty matter, thereby stripping the lower courts of jurisdiction to entertain the case. The Supreme Court consequently allowed GHL's appeal, quashed the judgment of the Court of Appeal and ordered the Chief Registrar of the Court of Appeal and the Admiralty Marshal to immediately hand over the crude oil aboard the FPSO Tamara Tokoni to General Hydrocarbons Limited. The court also awarded costs of N5 million against First Bank in favour of GHL.
The legal battle stemmed from financing arrangements between GHL and First Bank, with the lender seeking to retain control of crude oil stored aboard the FPSO as security for facilities extended to the oil company. First Bank had alleged that GHL failed to meet its repayment obligations, claiming that the company had not remitted proceeds from crude oil sales from Oil Mining Lease (OML) 120 into an account with the bank. The dispute escalated into multiple court cases and arbitration proceedings, culminating in the Federal High Court, Port Harcourt Judicial Division, ruling in favour of First Bank in January 2025 and ordering the arrest of the entire cargo onboard the FPSO Tamara Tokoni. The Court of Appeal subsequently upheld that decision on September 11, 2025.
In its unanimous judgment, the Supreme Court held that the case was a commercial dispute rather than a maritime matter, rendering the proceedings before the trial court and the subsequent orders of the Court of Appeal invalid. The court ruled that First Bank's claim centred on an alleged breach of an agreement requiring GHL to pay proceeds from crude oil sales from OML 120 into an account with the bank, and that such a dispute does not qualify as a general maritime claim capable of invoking the admiralty jurisdiction of the Federal High Court for the arrest or sale of cargo. Justice Habeeb Abiru, who read the lead judgment, held that the bank's allegation that GHL failed to remit crude oil sale proceeds into its account did not confer ownership rights over the cargo or the crude oil. The Supreme Court consequently set aside the September 11 judgment of the Court of Appeal, describing the orders directing the arrest and sale of the cargo as nullities because they were made without jurisdiction. The court also directed the Chief Registrar of the Court of Appeal and the Admiralty Marshal to immediately relinquish control of the seized cargo and return it to General Hydrocarbons Limited.
The ruling is expected to provide greater legal clarity for participants in Nigeria's oil and gas and maritime sectors, where offshore assets and crude oil cargoes are frequently linked to project financing and security arrangements. The decision underscores the importance of identifying the proper legal framework for resolving commercial disputes involving complex financing structures. For lenders, producers and investors, the judgment highlights the significance of carefully structured contractual agreements and the need to pursue enforcement actions through the appropriate legal channels. It also reinforces the role of jurisdiction in commercial litigation, a factor that can materially affect the outcome of disputes involving high-value energy assets.
The decision marks a significant setback for First Bank, which had sought to recover an alleged $225.8 million loan by seizing the crude oil cargo. GHL, owned by media mogul Nduka Obaigbena, has consistently argued that the dispute should be determined under the contractual agreements governing the financing relationship rather than through admiralty proceedings. Obaigbena has also claimed that GHL voluntarily rescued FBN from collapse in the past and that their collaboration helped resolve the bank's financial challenges while contributing to the development of OML 120.
With the Supreme Court's decision, the legal battle between GHL and First Bank has effectively come to a close. The apex court's judgment serves as a reminder that commercial disputes, no matter how closely they involve vessels or offshore assets, must be resolved through the proper legal channels, and that jurisdiction cannot be assumed where it does not exist.
📩 Stone Reporters News | 🌍 stonereportersnews.com
✉️ info@stonereportersnews.com | 📘 Facebook: Stone Reporters News | 🐦 X (Twitter): @StoneReportNew | 📸 Instagram: @stonereportersnews
Add comment
Comments