Abuja — The Court of Appeal has overturned a ruling of the Federal High Court in Port Harcourt, granting First Bank of Nigeria (FBN) a major reprieve in its long-running dispute with General Hydrocarbons Limited (GHL).
In a judgment delivered by Justice Polycarp Kwahar, the appellate court authorized the sale of crude oil aboard the floating production storage and offloading vessel (FPSO) Tamaru Tokoni. Proceeds from the sale, the court ruled, must be deposited into an interest-yielding escrow account to be supervised by the chief registrar of the Court of Appeal. The registrar was further directed to take charge of the crude cargo and ensure its protection against “dissipation or unauthorized disposition” until the matter is resolved either at the trial court or through arbitration.
The decision marks a reversal of an earlier judgment by Justice Emmanuel Obile of the Federal High Court, who in March dismissed First Bank’s suit. The bank had alleged that GHL diverted proceeds from the oil cargo that had been pledged as security for a transaction. Justice Obile sided with GHL, holding that the dispute was not a maritime claim but merely a debt recovery issue.
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At the heart of the conflict is FBN’s claim that GHL owes $225.8 million, a debt the company denies. GHL has, in turn, accused the bank of misusing an ex parte freezing order by selectively releasing parts of the crude to Conoil and the Nigerian National Petroleum Company Limited (NNPC).
Dissatisfied with the Port Harcourt ruling, First Bank lodged an appeal — a move that has now yielded this latest order in its favor.
The case, involving one of Nigeria’s largest banks and an oil trading firm, is set to continue at the trial court or arbitration, where the substantive issues of debt, security, and alleged mismanagement of crude sales will be tested.