Appeal Court Overturns High Court Ruling, Authorises Sale of Crude in First Bank vs General Hydrocarbons Case

The Court of Appeal sitting in Abuja has overturned a ruling by the Federal High Court in Port Harcourt and upheld the appeal filed by First Bank of Nigeria against General Hydrocarbons Limited (GHL).

In its decision, the appellate court granted an order for the sale of crude oil aboard the FPSO Tamaru Tokoni, with the proceeds to be paid into a high-interest-yielding escrow account managed by the court's chief registrar. This arrangement will remain in place pending the final outcome of the matter at either the trial court or arbitration.

Justice Polycarp Kwahar, who delivered the lead judgment, also appointed the Court of Appeal’s chief registrar to take custody of the crude oil cargo to prevent its dissipation or unauthorised transfer during the ongoing legal proceedings.

The ruling overturns an earlier decision by Justice Emmanuel Obile of the Federal High Court, Port Harcourt, who dismissed First Bank’s suit. The bank had alleged fraudulent diversion of proceeds from crude sales, which it claimed GHL had pledged as collateral. Justice Obile, however, upheld GHL’s preliminary objection, ruling that the case was not a maritime matter but a debt recovery dispute.

First Bank has claimed that GHL owes it $225.8 million — an allegation GHL has denied. GHL, in turn, accused the bank of misusing a prior ex parte freezing order by selectively releasing crude from the FPSO to Conoil and the NNPC.

Unhappy with the High Court’s ruling, First Bank appealed, resulting in this latest judgment by the Court of Appeal, which now sets the stage for further proceedings at the trial court or arbitration.

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