- GHL Moves to Defreeze Order, First Bank Opposes, Fights Back
- S/West State Governor Leads Team to Broker Truce
By Abiola Olawale
The contentious and raging legal dispute between General Hydrocarbons Limited (GHL), a major player in the oil industry, and First Bank of Nigeria, the nation’s oldest financial institution, has skyrocketed in recent days with both parties ferociously battling in and out of courts, to safeguard their respective business interests as the stakes heighten.
The New Diplomat checks reveal that this development has triggered serious concerns amongst shareholders and depositors who are said to be nervous about the potential status of their investment portfolios given the raging battles in and out of the court rooms.
Deeply concerned about the deepening crisis and new dynamics, sources confided in The New Diplomat that a prominent SouthWest governor who is also a big player in the oil and gas industry has been tipped to lead a reconciliation team to mediate, broker truce and cessation of hostilities amongst the warring parties. Also on the team is said to be a seasoned retired former Nigerian Ambassador, who is adept in negotiations. It is not clear what the terms cessation of hostilities would be should the parties agree to a roundtable peace negotiation.
In the meantime, the battle rages between First Bank and GHL. This is as GHL has begun legal steps to vacate, and indeed, defreeze an asset-freezing order imposed by the court in Lagos.
It would be recalled that on December 30, 2024, Justice Deinde Dipeolu of the Federal High Court Lagos State, granted an ex-parte order restricting all commercial banks from releasing or dealing with any assets or monies belonging to General Hydrocarbons Limited, its agents, subsidiaries, or sister companies up to the amount claimed by First Bank.
However, the GHL through its legal counsel, a Senior Advocate of Nigeria(SAN), Abiodun Layonu, prayed to the court to vacate the order.
Layonu argued that First Bank’s suit, which led to the court giving the asset-freezing order, represents an abuse of the court process, and should accordingly be vacated.
He also maintained that the bank failed to disclose an earlier order granted by Justice Ambrose Lewis-Allagoa which restrained the bank from taking further action to recover the loan until the parties subjected themselves to arbitration.
Layonu asked the court to dismiss the Mareva Injunction, arguing that the court was misled into granting it, asserting that the same has caused grave sfinancial harm to GHL.
In a counter-argument, First Bank, through its counsel, also a Senior Advocate of Nigeria,(SAN)Victor Ogude, First Bank of Nigeria Limited opposed the move and asked Justice Dipeolu to uphold his order freezing the assets, pending the outcome of a substantive suit aimed at recovering the said loan of $225.8 million extended to the oil company.
Ogude submitted that First Bank did not mislead the court to obtain the order. He emphasized that the bank provided all relevant facts in its affidavit supporting the suit.
Meanwhile, following arguments from both sides, Justice Dipeolu reserved ruling till a later date.
The judge disclosed that the date would be communicated to both parties in due course.
This comes amidst escalating disputes and arguments and counter arguments between General Hydrocarbons Limited (GHL) and First Bank.
The dispute centers around a said loan or series of credit facilities extended by First Bank to GHL for the development of Oil Mining Lease (OML) assets.
The relationship was formalized through a Subrogation Agreement in May 2021, where First Bank was to fund GHL’s exploration and development activities in exchange for a share of the profits from oil proceeds.
However, First Bank has claimed GHL owes it around $225.8 million, leading to legal actions including freezing GHL’s and its affiliates’ accounts.
GHL, on the other hand denied the claims, saying First Bank failed to meet its funding obligations under the agreement, which has led to operational setbacks, including the loss of significant equipment like the Blackford Dolphin drill ship.n
