The Supreme Court has set aside an order of the court of appeal freezing the assets of Neconde Energy Limited, Nestoil Limited and two other entities over an alleged $1.1 billion indebtedness to FBNQuest Merchant Bank Limited and First Trustees Limited.
In a judgment delivered on Monday, a five-member panel of the apex court held that the appellate court exceeded its powers by granting an ex parte application against the companies.
Stephen Adah, who delivered the lead judgment, faulted the court of appeal for assuming jurisdiction and issuing an injunction against Neconde and Nestoil when the matter was not properly before the court.
The apex court also accused the appellate court of misusing the judicial process, particularly by granting a stay of proceedings in a matter pending before the federal high court in Lagos.
The dispute arose from debt recovery proceedings instituted by lenders, including FBNQuest Merchant Bank and First Trustees, against Nestoil and Neconde Energy over financing arrangements linked to oil assets and operations.
Nestoil was placed under receivership by a consortium of lenders over an alleged debt of $1.01 billion and N430 billion following an order of a federal high court.
However, Nestoil, its affiliate, Neconde Energy, Azudialu-Obiejesi and Obiejesi obtained another high court injunction directing the receiver to suspend further action.
The receiver retook possession of the property after the court of appeal granted a “restorative injunction” in an ex-parte application filed by FBN Merchant Bank and First Trustees.
The order from the supreme court clears the way for the trial to continue before the federal high court while restoring full control of the companies’ assets and operations to Nestoil and Neconde.
