Supreme Court on Monday set aside an order of the Court of Appeal freezing the assets of Nestoil Limited, Neconde Energy Limited and two other companies over an alleged 1.1 billion dollar indebtedness to FBNQuest Merchant Bank Limited and First Trustees Limited.
A five-member panel of the apex court, led by Justice Stephen Adah, held that the Court of Appeal exceeded its powers in granting an ex parte application against the companies.
In the lead judgment, Justice Adah faulted the appellate court for assuming jurisdiction and issuing an injunction against the appellants when the matter was not properly before it.
The Supreme Court also criticised the Court of Appeal for what it described as a misuse of judicial process, particularly in issuing a stay of proceedings at the Federal High Court in Lagos while the substantive matter was still pending.
The dispute arose from debt recovery proceedings instituted by lenders, including FBNQuest Merchant Bank Limited and First Trustees Limited, against Nestoil and Neconde Energy over financing arrangements linked to oil assets and operations.
In October 2025, the Federal High Court in Lagos granted an ex parte Mareva injunction freezing the companies’ assets, bank accounts and shares across more than 20 financial institutions.
The companies subsequently challenged the order, arguing that it had lapsed after 14 days in accordance with the Federal High Court Civil Procedure Rules following the filing of a motion seeking its discharge.
In November 2025, Justice Daniel Osiagor of the Federal High Court ruled that the ex parte order had expired by operation of law and was no longer valid.
However, Justice Yargata Nimpar of the Court of Appeal, on Nov. 29, 2025, granted an interim restorative injunction that returned control of Nestoil’s assets and operations to a receiver-manager appointed by the lenders.
The appellate court also nullified actions taken by the company following the Federal High Court ruling and allowed the Mareva injunction to continue in force.
Dissatisfied with the decision, the companies approached the Supreme Court, seeking to overturn the appellate court’s ruling.
Delivering judgment, the apex court held that the Court of Appeal acted outside its jurisdiction in granting the interim orders and restoring the asset-freezing measures.
The Supreme Court consequently set aside the appellate court’s decision, effectively restoring full control of the companies’ assets and operations to their management.
The ruling also clears the way for the substantive dispute between the parties to continue before the trial court.
Legal observers say the judgment reinforces the principle that appellate courts must exercise caution in granting ex parte reliefs, particularly in matters that are still actively being determined by lower courts.
The decision marks a significant development in the protracted legal battle between the oil firms and their lenders over the disputed debt obligations.
