Court Reserves Ruling in First Bank vs. GHL Dispute
The Federal High Court in Lagos has reserved its ruling on an application filed by General Hydrocarbons Limited (GHL), seeking to lift restrictions placed on its accounts. The court’s decision comes amidst a contentious legal battle between GHL and First Bank of Nigeria Limited over an alleged $225.8 million loan.
First Bank, represented by its counsel Victor Ogude (SAN), argued that the court should maintain the order freezing GHL’s assets and accounts until the conclusion of its substantive case. The bank alleges that the loan, granted to GHL for its oil operations, remains unpaid.
Disputed Facts and Mareva Injunction
The Mareva injunction was issued on December 30, 2024, by Justice Deinde Dipeolu upon First Bank’s application, alongside FBNQuest Trustees Limited. This order barred GHL and its directors—Efe Damilola Obaigbena, Olabisi Eka Obaigbena, and other entities—from transferring or dissipating assets within Nigeria.
In its motion to lift the injunction, GHL argued that First Bank failed to disclose material facts when applying for the order. Represented by counsel Abiodun Layonu (SAN), GHL claimed the bank had previously been restrained from taking further recovery actions by Justice Ambrose Lewis-Allagoa, who ordered the parties to resolve their dispute through arbitration. Layonu characterized First Bank’s application as an abuse of court process, alleging it misled the court into granting the injunction.
GHL’s Defense
Layonu contended that the Mareva injunction had caused significant financial harm to GHL, crippling its operations and endangering its ongoing oil ventures. He argued that the existence of Justice Lewis-Allagoa’s earlier order invalidates the current proceedings, as First Bank is pursuing parallel actions in violation of due process.
First Bank’s Rebuttal
Countering GHL’s claims, Ogude insisted that the bank fully disclosed all relevant facts when obtaining the Mareva injunction. He dismissed the allegation of abuse of process, arguing that the parties before Justice Dipeolu differ from those involved in the arbitration matter presided over by Justice Lewis-Allagoa.
Ogude further emphasized that no legal provision restricts the bank’s right to seek judicial recourse for loan recovery. He maintained that the injunction is vital to preserving the disputed assets pending the resolution of the substantive case.
The council also defended the inclusion of the Obaigbenas as defendants, noting that they were named in their capacities as directors of GHL. Ogude urged the court to dismiss GHL’s application as baseless and set a date for the hearing of the main suit.
The Larger Implications
This high-stakes legal dispute highlights broader issues in Nigeria’s financial and corporate governance systems. The case underscores the challenges faced by financial institutions in loan recovery, particularly when disputes involve complex corporate structures and high-profile directors.
On the other hand, GHL’s defense raises critical questions about the use of Mareva injunctions and the potential for abuse in circumventing arbitration agreements. The financial and operational damage caused by such orders, if granted prematurely, can have far-reaching consequences for businesses.
What Lies Ahead
As the Federal High Court deliberates on the application, the ruling will not only determine the immediate fate of GHL’s accounts but could also set a precedent for future cases involving financial disputes and Mareva injunctions in Nigeria. Both parties now await the court’s decision, which will play a pivotal role in shaping the trajectory of this multi-million-dollar legal battle.
Reference
Court Reserves Ruling in First Bank vs. GHL Dispute