Court Lifts Mareva Injunction in GHL vs FirstBank Case

A Federal High Court has vacated its Mareva orders that froze $225.8 million in assets and accounts linked to General Hydrocarbons Limited (GHL) and prominent individuals, including Nduka Obaigbena.

The ruling followed a motion by GHL’s legal team against First Bank of Nigeria Limited and FBN Quest Trustees Limited. The court’s earlier decision was based on allegations of unpaid loans totaling $225.8 million owed to First Bank.

Justice D.I. Dipeolu noted that the interim orders made by Justice Allagoa revolved around arbitration proceedings between GHL and First Bank. The judge ruled that First Bank had been restrained from making any calls or demands concerning GHL’s operation of OML 120 until the arbitration was concluded. The Mareva order granted on December 30, 2024, was set aside.

The court also overruled a motion by Obaigbena and other defendants seeking to dismiss First Bank’s suit for lack of jurisdiction or for being an abuse of court process. The matter has been adjourned to February 19, 2025, for further proceedings.

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General Hydrocarbons, an oil and gas company, is owned by Nduka Obaigbena, the publisher and founder of ThisDay Newspapers and Arise TV. The company is listed as the operator of OML 120, an oil-producing block in Nigeria.

The court had initially directed all major commercial banks and financial institutions in Nigeria to freeze the defendants’ accounts and restrict access to funds or assets up to the claim amount, pending further legal proceedings.

The interim injunctions had restrained banks such as GTBank, Access Bank, Zenith Bank, First Bank, and fintech platforms including Flutterwave, Paystack, and Piggyvest from releasing funds or handling assets linked to the defendants. This included accounts associated with key individuals like Efe Damilola Obaigbena and Olabisi Eka Obaigbena, as well as corporate entities such as GHL 121 Ltd, CESL Oyo Production, and other companies tied to the oil block operations.

Following this ruling, GHL’s lawyer, Ebun Awosika, approached the court with a motion on notice challenging the orders. Among other issues, GHL urged the court to determine whether First Bank is entitled to the remittance of all monies in the custody of commercial banks and fintech platforms standing to the credit of GHL’s account (No. 2041158591) domiciled in First Bank until the loan facilities are fully liquidated.

GHL also argued that the existing orders of the Federal High Court, delivered by Justice Allagoa on 12 December 2024, had restrained First Bank from “making any calls” or “taking any steps” against it pending the outcome of arbitration proceedings. Furthermore, GHL accused FBN of deliberately failing to bring the December 12 court order to Justice Dipeolu’s attention, urging the court to classify this as an abuse of court process.

Justice Dipeolu stated that the interim orders made by Justice Allagoa revolved around arbitration proceedings between GHL and First Bank, which were initiated under Clause 12(c) of the Agreement between GHL and FBN dated 29 May 2021. On the other hand, the judge noted that First Bank’s suit before his court was related to credit letters offered by the bank.

The judge further observed that the second order granted by Justice Allagoa restrained FBN from making any calls or demands, taking any steps whatsoever to enforce any security, receivables, instrument, finance documents, or assets of the applicant that had been charged as security for the facility agreements related to OML 120, enforcing the side letter, the amended, or restated agreements between the applicant and the respondent, and taking any action pending the hearing and determination of the arbitration proceeding between the applicant and the respondent under Clause 12(c) of the Agreement dated 29 May 2021.

The judge ruled that, given these facts, First Bank had been restrained from making any calls or demands or taking any steps concerning GHL’s operation of OML 120 until the arbitration was concluded.

He also clarified that although the interim orders made by the court on 30 December 2024 were related to a separate facility agreement between FBN and GHL, which did not extend to the receivables in the 29 May 2021 agreement, First Bank’s suit was not an abuse of court process as GHL claimed. However, in light of Justice Allagoa’s orders issued on 12 December 2024, the judge ruled that the Mareva order granted on 30 December 2024 was set aside.

The judge also noted that while there were existing preservative court orders requiring parties to comply with arbitration proceedings, First Bank had failed to attach these orders to its affidavit in support of its ex parte motion.

Despite this, the court disagreed with GHL’s jurisdictional argument, affirming that the court was legally empowered to have issued the interim Mareva orders on 30 December 2024.

Additionally, the court overruled the motion by Obaigbena and other defendants in the case that sought an order striking out or dismissing First Bank’s suit for lack of jurisdiction or for being an abuse of court process. The court stressed that the FBN motion was not an abuse of court process; however, the Mareva orders are set aside in line with the court’s position on GHL’s motion.

Further hearings on this case will determine its ultimate impact, with potential ramifications for Nigeria’s financial services sector. The outcome of this case could have far-reaching implications for corporate governance and the financial stability of the affected entities. The matter has now been adjourned to 19 February 2025 to allow all parties to respond to the substantive suit.