- Says, FBN Action Amounts to Abuse of Judicial Process
By Abiola Olawale
In a resounding victory for General Hydrocarbons Limited (GHL), a pre-eminent player in the oil and gas industry, a Federal High Court in Port Harcourt has thrown out a lawsuit filed by Nigeria’s oldest bank, First Bank of Nigeria (FBN) against the former, designating it a blatant abuse of the judicial process.
The ruling which further throws up reputational crisis for FBN amidst a motley of issues marks yet another legal defeat for Nigeria’s oldest banking institution in its ongoing firestorm with the GHL, a Lagos headquartered energy firm.
Justice E.A. Obile, while presiding over the case, upheld GHL’s preliminary objection, ruling that the court lacked jurisdiction to entertain FBN’s suit.
The judge who cited a prior order by Justice Allagoa on December 12, 2024, in Suit No. FHC/L/CS/1953/2024, which padlocks First Bank from pursuing actions that contravened an existing Memorandum of Understanding (MoU) between the parties, proceeded to rule that any further legal action by FBN amounts to a gross abuse, and misapplication of legal process and authorization.
The judge also found that FBN’s latest legal attempts to undertake what it called manoeuvre breached this basic legal credo and order, labelling it a “classic case of abuse of court process.”
Before the ruling, the GHL, represented by its counsel Dr. ‘Biodun Layonu, a Senior Advocate of Nigeria(SAN) had argued that First Bank’s repeated breaches of a subsisting MoU were tantamount to clear attempts to not only circumvent judicial oversight but also a move aimed at derailing an ongoing arbitration process at the Lagos Court of Arbitration, where GHL is seeking hundreds of millions of dollars in damages for alleged contractual violations by the bank.
In addition, the court also upheld the argument of GHL that the ex-parte orders of 9th January 2025 had lapsed by the operation and spirit of the Law.
The ex-parte orders made on 9th January 2025 were as follows:
a) An order to arrest and/or attach or lien the entire cargo of crude oil on board the Floating Production Storage and Offloading (“FPSO”) vessel Tamara Tokoni.
b) An order directing the officers of the Nigerian Navy, NUPRC, NIMASA, Harbour Master of the Nigeria Ports Authority to render necessary assistance to the Admiralty Marshall of the Court in giving effect to the order of arrest made in (a) above.
The court held that the above orders had lapsed automatically by effluxion of time and consequently set them aside. Going the Judge’s pronouncement, this has consequently paved the way for an unrestricted arbitration at the Lagos Court of Arbitration where GHL had dragged FBN seeking humongous sums of money in damages for multiple breaches of FBN’s obligations.
Recall that the latest victory by the GHL is coming after the energy firm obtained a court ruling overturning a previous order in favour of First Bank, freezing GHL assets.
Recall that Justice Dehinde Dipeolu of the Federal High Court in Lagos State had, in a ruling, vacated an ex parte mareva injunction that froze the assets of GHL regarding a disputed $225.8m loan debt.
The presiding judge held that the order freezing GHL assets violated an existing order from a court of concurrent jurisdiction.
This comes amidst escalating disputes, arguments, and counterarguments between GHL and First Bank.
The dispute centres around a loan or series of credit facilities purportedly extended by First Bank to GHL for the development of Oil Mining Lease (OML) assets.
The relationship was reportedly formalized through a Subrogation Agreement in May 2021, where First Bank was required to fund GHL’s exploration and development activities in exchange for a share of the profits from oil proceeds.
But FBN had responded, stressing that it met its own side of the deal, maintaining that the energy firm was the one at fault.
However, GHL denied the claims by FBN, underlying the point that First Bank failed to meet its funding obligations under the agreement, which has led to operational setbacks, including the loss of significant equipment such as its Blackford Dolphin drill ship.
The development also comes amidst multiple issues. Recall that anoutvtwo weeks back, an Abia businessan, Dr Eke Agbai Eke, accused the financial institution’s staff of unauthorized and illicit withdrawal of the sum of N550 million from his fixed deposit account.
In a lawsuit filed by the customer’s lawyer, Ebuke Nwaeze, the businessman accused the FBN’s staff at the branch in question of undertaking inappropriate, unethical actions that jeopardize, evaporate customer’s confidence inn FBN. The matter has been adjourned to March 26 and 27, respectively, for hearing.
All these are coming amid ongoing struggle and war for control over First Bank Holdings Plc between Chairman Femi Otedola and some shareholders.
Recall that Oba Otudeko, an investment guru had initiated a legal action against FBN Holdings, seeking a court order to compel the financial institution to recognise his investment vehicle, Barbican Capital, as the largest shareholder in the bank. If he had succeeded this would have blocked Otedola from gaining recognition as the largest single shareholder in First Bank Holdings.
Otudeko, in the lawsuit (no. FHC/L/CS/1172/24), had maintained that Barbican Capital owns a 15.01 per cent stake amounting to 5.38 billion units.
However, the bank insists that Otedola, who holds a 9.41 per cent share, is the largest shareholder. In a major related matter, Oba Otudeko was slammed with allegations of N12.3bn fraud, a matter currently pending at the Federal High Court in Lagos.
Otudeko along with a former Managing Director of FBN, Mr Olabisi Onasanya and one Soji Akintayo and a brokerage firm known as Anchorage Leisure Ltd in the charge sheet marked FHC/L/20V/2025 are facing a 13 counts bordering on obtaining under false pretences monies. The charges are preferred against them by the Economic and Financial Crimes Commission (EFCC).
In a recent proceedings on Monday, Otudeko had , through his counsel, Wole Olanipekun, SAN apprised the court that the parties were exploring the option of out of court settlement. According to him, another meeting has been scheduled for April 9 on the subject matter.
