First Bank of Nigeria Limited (FirstBank) has scored a major legal victory against General Hydrocarbons Limited (GHL), with the Court of Appeal ruling in favor of the bank and setting aside a prior Federal High Court decision that dismissed its claims over the alleged fraudulent diversion of proceeds from crude oil pledged as collateral. The case was handled by FirstBank’s legal team, Babajide Koku SAN and Victor Ogude SAN.
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The dispute centers on crude oil aboard the Floating Production Storage and Offloading (FPSO) vessel Tamara Tokoni, which GHL had pledged to FirstBank as security for substantial loan facilities. Contrary to the pledge agreement, GHL allegedly diverted proceeds from the sale of the cargo, prompting the bank to seek legal redress.
FirstBank appealed the trial court’s ruling, which treated the matter as a simple debt recovery case. In a unanimous decision on Thursday, 11 September 2025, a three-man panel of the Court of Appeal led by Justice Polycap Kwahar affirmed the maritime nature of the claim and emphasized the importance of preserving the Res the crude oil cargo as the central issue in dispute. The appellate court set aside the Federal High Court’s order vacating the arrest of the 2nd respondent and authorized the sale of the crude oil, with proceeds to be held in an interest-yielding escrow account under the custody of the Chief Registrar of the Court of Appeal, pending the hearing and determination of the case at the trial court and arbitration.
Justice Kwahar held that preserving the cargo was in the interest of justice, noting the potential risks of expropriation or waste. He directed that, once the storage tanks on the FPSO are ready, the crude oil be sold and the proceeds deposited into an escrow account managed by the court. The Chief Registrar, in collaboration with the Admiralty Marshal, was appointed to take possession of the cargo and ensure its protection against dissipation or unauthorized disposition.
FirstBank originally sued GHL for $225.8 million, obtaining a Mareva injunction from the Federal High Court in Rivers State in 2024 to freeze the assets of GHL and its associates. However, the order was lifted in January 2025 by Justice E.A. Obile, prompting the bank to appeal. GHL, in turn, has denied the claims, asserting that FirstBank breached the 2021 Subrogation Agreement and alleged that no payment is due. The oil company also accused the bank of abusing ex parte freezing orders by selectively releasing portions of the crude to Conoil and NNPC.
The Court of Appeal has now halted all such actions by GHL and granted full possession and control of the crude in the FPSO to the Chief Registrar, assisted by the Admiralty Marshal.
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