In a major legal victory that could set a new precedent for loan recoveries, First Bank of Nigeria Limited has won its appeal at the Court of Appeal against General Hydrocarbons Limited (GHL), a company owned by media mogul Nduka Obiagbena.
The Court of Appeal, in its judgement on Thursday, September 11, 2025 set aside an earlier trial court ruling that had dismissed the bank’s claims and authorized the sale of crude oil cargo from a Floating Production Storage and Offloading (FPSO) vessel, Tamara Tokoni.
The dispute stems from a substantial loan that FirstBank extended to GHL for the development of oil mining lease assets. According to the bank, the crude oil aboard the FPSO was pledged as security for the loan, but GHL allegedly diverted the proceeds from its sale.
This prompted FirstBank to file a lawsuit, which a lower court had initially dismissed, stating that the matter was a simple debt recovery case and not a maritime claim. The Court of Appeal, however, reversed that decision, affirming the maritime nature of the claim and emphasizing the importance of preserving the “Res,” or the crude oil cargo, as the central issue in the dispute.
The ruling is a significant win for FirstBank and reinforces its commitment to protecting its assets. The appellate court’s decision, which allowed FirstBank’s appeal, authorizes the sale of the crude oil.
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However, in a move to ensure transparency and accountability, the court directed that the proceeds from the sale be deposited into an interest-yielding escrow account under the custody of the Chief Registrar of the Court of Appeal. This measure ensures that the funds are protected and secured until the case is fully heard and determined at the trial court and a court of arbitration.
The protracted legal battle between FirstBank and GHL has drawn significant attention due to the high-profile nature of the individuals and companies involved. While FirstBank has now secured the authority to sell the collateral to recover part of its outstanding debt, the case’s final resolution, and the ultimate destination of the funds, will depend on the outcome of the ongoing legal and arbitration proceedings.
The judgment, nonetheless, establishes a strong precedent for the enforcement of collateral agreements in high-value commercial transactions within the Nigerian oil and gas sector.
