FirstBank Secures Victory at Appeal Court in High-Profile Dispute with General Hydrocarbons Ltd

The Court of Appeal in Lagos has ruled in favour of First Bank of Nigeria Plc in its long-running commercial dispute with General Hydrocarbons Limited (GHL), overturning earlier decisions of the Federal High Court and reinstating measures to safeguard crude oil assets linked to the case. The ruling, delivered on Thursday, September 11, 2025, represents a major development in a high-stakes legal battle that has captured attention across Nigeria’s financial and oil sectors. The case has raised critical questions about how banks enforce loan agreements, the handling of pledged oil cargoes, and the legal safeguards available to lenders in complex energy transactions. In its judgment, the Court of Appeal ordered the Chief Registrar of the court, working with the Admiralty Marshal, to take the custody of crude oil stored aboard the Floating Production Storage and Offloading vessel Tamara Tokoni. The appellate court also directed that any proceeds from the crude oil must either be held in escrow under an interest-yielding account or applied strictly in accordance with future court directives. This decision was intended to prevent the dissipation of assets while the substantive trial continues. The dispute began after FirstBank accused General Hydrocarbons of diverting proceeds from the sale of crude oil that had been pledged as collateral for a loan. According to the bank, the alleged diversion left an outstanding debt of about $225.8 million. FirstBank sought court intervention, arguing that its interests as a secured lender needed to be protected through interim measures. General Hydrocarbons, however, has consistently denied wrongdoing, insisting that the bank failed to uphold its contractual obligations. The company has also filed counterclaims, arguing that FirstBank’s enforcement attempts were premature and unlawful. Earlier this year, the Federal High Court had sided with GHL, setting aside freezing orders and dismissing parts of the bank’s claims. The latest ruling by the Court of Appeal reverses that position and restores the measures FirstBank had sought to protect the disputed cargo. Legal analysts describe the decision as a significant boost for creditors, as it reaffirms the principle that assets tied to disputed debts can be preserved under judicial authority until the courts reach a final determination. Industry watchers note that the case has broader implications for Nigeria’s banking and energy sectors. For banks, the ruling underscores the judiciary’s recognition of their rights to enforce loan agreements and protect collateral. For energy companies, it highlights the legal and financial risks of using crude oil as security for credit facilities, especially when disputes arise over repayment or sale proceeds. The case, which involves complex financial dealings and has drawn widespread attention due to GHL’s high-profile connections, is expected to continue attracting scrutiny as the substantive issues move forward in court. Many believe the eventual outcome could set a precedent for how similar disputes between lenders and energy firms are resolved in Nigeria’s commercial and legal environment.