Supreme Court Sets Aside Freezing Order on Neconde, Nestoil Assets Over $1.1 Billion Debt Claim

The Supreme Court has set aside an order of the Court of Appeal that froze 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 by a five-member panel, Justice Stephen Adah, who delivered the lead judgment, held that the appellate court exceeded its powers by granting an ex parte application against the companies. 

The apex court faulted the Court of Appeal for assuming jurisdiction and issuing an injunction against Nestoil and Neconde when the matter was not properly before the court. The Supreme 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. 

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However, Nestoil, its affiliate Neconde Energy, and its principals obtained another high court injunction directing the receiver to suspend further action. The receiver later 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 Supreme Court’s order 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. The judgment effectively nullifies the appellate court’s intervention and returns the parties to the lower court for a proper hearing on the merits of the debt claim.