Supreme Court Orders Handover of Crude Oil to GHL, Citing $70 Million Loss in Bank Dispute

Nigeria's Supreme Court has delivered a landmark judgment in a protracted oil industry dispute, ordering the immediate handover of crude oil from the FPSO Tamara Tokoni to General Hydrocarbons Limited (GHL). This decision effectively overturns a prior ruling by the Court of Appeal, which had mandated the sale of the crude and the placement of proceeds into a court-administered escrow account pending the resolution of a dispute between First Bank of Nigeria (FBN) and GHL.

The apex court's ruling came after it set aside the Court of Appeal's orders. The appellate court had previously directed that the crude oil aboard the FPSO be sold, with the proceeds held in custody pending the outcome of arbitration and other ongoing legal processes. The justices at the Court of Appeal had justified their order as necessary to preserve the "res" or subject matter of the case.

However, GHL challenged the appellate court's verdict, arguing that it erred in making orders against its assets and that the court lacked the jurisdiction to hear FBN's case. The Supreme Court, in its judgment read by Justice Habeeb Abiru, agreed with GHL. The five-member panel held that the suit filed by First Bank of Nigeria was contractual in nature, not an admiralty matter, and that the trial court lacked the jurisdiction to entertain FBN's suit.

Following the Supreme Court's decision, Ojukwu Chikoso, SAN, a lawyer for GHL, highlighted the significant financial impact of the legal battle. He stated that Nigeria lost over $70 million due to the dispute between FBN and GHL. Chikoso urged the Central Bank of Nigeria to increase its oversight of commercial banks, suggesting that the case revealed a lack of sufficient control over certain banking activities.

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Nigeria lost over $70 million due to the legal battle between FBN and GHL.