GHL vs FirstBank: Court Overturns Mareva Injunction, Rules Against Obaigbena’s Request

Mareva orders that froze $225.8 million in assets and accounts connected to General Hydrocarbons Limited (GHL), its affiliates, and well-known people, including media tycoon Nduka Obaigbena, were overturned by a Federal High Court on Wednesday.

After GHL’s legal team filed a motion on notice against First Bank of Nigeria Limited and FBN Quest Trustees Limited, Justice D.I. Dipeolu rendered the decision.

According to earlier reports, the court’s earlier interim ruling came in response to claims that First Bank owed $225.8 million in unpaid loans.
Nduka Obaigbena is the owner of the oil and gas company General Hydrocarbons.

The business is identified as the operator of Nigeria’s oil-producing block, OML 120.

Initially, the court ordered all of Nigeria’s largest commercial banks and financial institutions to freeze the defendants’ accounts and prevent them from accessing assets or money up to the claim amount while additional legal action was taken.
Motion Filed by GHL

According to reports, banks like GTBank, Access Bank, Zenith Bank, and First Bank, as well as fintech companies like Flutterwave, Paystack, and Piggyvest, were prohibited from disbursing money or managing assets connected to the defendants by the interim injunctions.
In addition to corporate firms like GHL 121 Ltd, CESL Oyo Production, and other businesses connected to the oil block operations, these accounts were linked to important persons like Efe Damilola Obaigbena and Olabisi Eka Obaigbena.
Part of the court order says:

“An order of Mareva injunction restraining all commercial banks in Nigeria, including Guaranty Trust Bank Limited, Access Bank Plc, Citibank Nigeria Limited, Carbon Bank, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Limited, First City Monument Bank Plc, Flutterwave, Globus Bank, Heritage Bank Limited, Jaiz Bank, Keystone Bank Limited, Opay Digital Services Limited, PalmPay Limited, Paystack Payments Limited, Piggyvest, Momo Payment Service Bank Limited, Polaris Bank Limited, Providus Bank, Stanbic IBTC Bank Nigeria Limited, Standard Chartered Bank, Sterling Bank Plc, SunTrust Bank Limited, Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc, and all other financial institutions operating in Nigeria, from releasing or dealing with any funds or assets due to the GHL up to the sum of $225,802,379.69, being the outstanding indebtedness on the GHL’s account with First Bank as of 30 September 2024 in respect of the loan facilities granted to GHL by First Bank pending the hearing and determination of the Motion on Notice for an interlocutory injunction.”

Ebun Awosika, the attorney for GHL, challenged the orders in a move on notice after this decision.
Among other things, GHL asked the court to decide whether First Bank has the right to receive all funds held by commercial banks and fintech companies that are credited to GHL’s First Bank account (No. 2041158591) until the loan facilities are completely repaid.
Additionally, GHL said that First Bank was prohibited from “making any calls” or “taking any steps” against it until the arbitration proceedings were concluded by the Federal High Court’s current decisions, which were delivered by Justice Allagoa on December 12, 2024.
In addition, GHL urged the court to declare this an abuse of court procedure, accusing FBN of willfully neglecting to alert Justice Dipeolu about the court order dated December 12.
The Court’s Remarks
In his January 29 ruling on the motion, Justice Dipeolu said that the arbitration proceedings between GHL and First Bank, which were started in accordance with Clause 12(c) of the Agreement between GHL and FBN dated May 29, 2021, were the focus of the interim orders issued by Justice Allagoa.
However, the judge pointed out that First Bank’s lawsuit in his court had to do with the bank’s credit letters.
The judge said, “The share structure, the Deed of All Assets Debenture, the Deed of Assignment of Insurances, the Amendment and Restatement Deed of Assignment of Contracts and Receivables, the Deed of Account Charge, and the Amendment and Restatement Deed of Account Charge are the main issues in this suit.”

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He added that FBN was prohibited by Justice Allagoa’s second order from:

Making any phone calls or requests,
Taking any action to enforce any assets, financial records, receivables, instruments, or security that the applicant had pledged as collateral for the OML 120 facility agreements,
Enforcing the respondent’s and applicant’s revised or restated agreements, the side letter,
acting in any way while the arbitration between the applicant and the respondent is being heard and decided in accordance with Clause 12(c) of the Agreement of May 29, 2021.
Given these facts, the judge decided that First Bank was prohibited from calling, requesting, or acting in any way related to GHL’s operation of OML 120 until the arbitration was over.

Additionally, he clarified that First Bank’s suit was not an abuse of court process as GHL alleged, even if the court’s interim orders on December 30, 2024, were connected to a different facility arrangement between FBN and GHL that did not apply to the receivables in the May 29, 2021 agreement.
However, the judge decided that the Mareva ruling made on December 30, 2024, was overturned in light of Justice Allagoa’s directives issued on December 12, 2024.
The judge also pointed out that First Bank had neglected to include the preservation court orders that required the parties to follow arbitration procedures in its affidavit supporting its ex parte motion.
The judge said, “The plaintiff (FBN) should have attached the preservative order, even though the plaintiff disclosed that GHL obtained preservative orders to abide by the resolution of the dispute submitted to arbitration.”

In spite of this, the court rejected GHL’s jurisdictional defense and upheld its legal authority to issue the interim Mareva directives on December 30, 2024.

“The Defendant/Applicant’s Motion on Notice dated January 13, 2025, is successful based on everything I’ve found thus far. The court decided to set aside the Mareva Order of December 30, 2024.

Furthermore, Obaigbena and other defendants’ move to have First Bank’s claim dismissed or struck out for lack of jurisdiction or abuse of court process was overruled by the court.

In accordance with the court’s stance on the GHL’s request, the Mareva orders are set aside, however the court emphasized that the FBN motion was not a misuse of the legal system.

In order to give all parties time to reply to the substantive suit, the case has now been postponed until February 19, 2025.

What Comes Next?
According to sources, more hearings on this matter will decide its final outcome, which could have implications for Nigeria’s financial services industry.
The case’s verdict may have a significant impact on the impacted businesses’ financial soundness and corporate governance.