Nigeria’s judiciary again in focus as First Bank, Obaigbena’s firm secure conflicting rulings from same court

A high-stakes legal dispute between General Hydrocarbons Limited, chaired by media mogul, Nduka Obaigbena, and First Bank of Nigeria Limited has drawn attention to a procedural conflict within Nigeria’s judiciary.

The case involves two contradictory rulings issued by the Federal High Court, creating uncertainty over the enforcement of a $225.8 million debt claim.

The controversy began with a December 30, 2024, ex parte order by Justice Deinde Dipeolu of the Federal High Court in Lagos, freezing the accounts and assets of General Hydrocarbons Limited across all Nigerian banks. This order was secured by First Bank of Nigeria Limited and FBNQUEST Trustees Limited, which allege the company owes $225.8 million in unpaid debts tied to loan facilities as of September 30, 2024.

However, General Hydrocarbons has pushed back, arguing that the December 30 order directly conflicts with a prior judgment by Justice Allagoa of the same court on December 12, 2024. The earlier ruling explicitly barred First Bank from taking any enforcement action on the loan facilities pending the resolution of ongoing arbitration.

Company Raises Concerns Over Abuse of Process

In a notice signed by its counsel, Dr. A.I. Layonu (SAN), General Hydrocarbons accused First Bank of abusing the court process by failing to disclose the December 12 judgment when seeking the ex parte order from Justice Dipeolu.

Read also: Nigerians groan as banking service disruptions obstruct businesses, taint reputations?

“This is a most blatant case of abuse of court process by FBN, which has sought to overreach our client by approaching another Judge of the same Court to obtain favorable orders that directly contravene an extant order of the Court which has not been set aside on appeal or otherwise,” Layonu stated.

The December 12 ruling by Justice Allagoa, which followed a hearing involving both parties, restrained First Bank from enforcing any security or assets tied to the disputed loan agreements, particularly those connected to OML 120, a critical oil and gas asset.

Layonu emphasized the binding nature of Justice Allagoa’s decision: “The restraining order of the Federal High Court, per Allagoa, J, emanated from a final judgment that has not been set aside on appeal. This earlier judgment was issued after both parties were heard, unlike the subsequent ex parte order obtained by First Bank.”

Warnings to Banks and Legal Remedies

General Hydrocarbons has urged all commercial banks to refrain from enforcing the December 30 order and instead seek clarification from the court. The company warned that any attempt to enforce the contested order could result in severe legal consequences.

“Please be assured that we are already taking steps to bring FBN’s contemptuous act and abuse of court process to the attention of the Court,” Layonu stated.

The company further accused First Bank of attempting to exploit the judicial system by securing conflicting orders from two judges within the same court.

Conflict of Court Orders

The legal battle underscores the procedural challenges within Nigeria’s judicial system, particularly in cases involving substantial financial claims. Justice Allagoa’s December 12 ruling granted General Hydrocarbons temporary relief by restraining First Bank from enforcement actions. Conversely, Justice Dipeolu’s December 30 order froze the company’s accounts and assets, favoring First Bank’s position.

The conflicting rulings have raised questions about judicial consistency and the mechanisms for resolving procedural conflicts.

Commitment to Arbitration

General Hydrocarbons reiterated its commitment to resolving the dispute through arbitration as stipulated in the original loan agreement. The company condemned First Bank’s actions as undermining this process.

Layonu concluded: “The plausible explanation for this is that FBN deliberately omitted to bring the orders of the Court made on 12th December 2024 to the attention of the Court in the subsequent suit coram Dipeolu, J.”

The outcome of this legal battle will not only determine the fate of General Hydrocarbons’ assets but could also set a precedent for how Nigeria’s judiciary handles procedural conflicts in disputes that could bring it into disrepute.

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