The Federal High Court in Lagos has set aside the appointment of a receiver over Neconde Energy Limited and its interest in Oil Mining Lease 42, holding that the security relied upon by the lenders had not yet crystallised to permit the enforcement action.
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Delivering judgment in Suit No. FHC/L/CS/2545/2025 — Glencore Energy UK Ltd & Ors v. Abubakar Sulu-Gambari, SAN & Ors, Justice Osiagor held that lenders to Nestoil, acting through FBN Trustees, could not at that stage enforce the facility by appointing a receiver over Neconde or its interest in OML 42.
The dispute centred on the Deed of Charge relied upon by the lenders as the basis for the receivership.
The court held that the Deed of Charge had not crystallised, and consequently found that the appointment of the receiver could not stand.
Justice Osiagor therefore declared the appointment invalid and ordered that it be set aside.
Going further, the court granted an injunction restraining the lenders from taking enforcement steps against Neconde or appointing another receiver over the company or its interest in OML 42 until the Deed of Charge crystallises.
In practical terms, the judgment means that Neconde remains in control of its operations and interest in OML 42 for now, while the lenders are prevented from exercising the disputed receivership powers until the contractual conditions required for enforcement have arisen.
The ruling is significant because it turns on the point at which a lender’s security rights become enforceable. In this case, the court found that the conditions necessary for the lenders to exercise the power relied upon in appointing a receiver had not yet occurred.
Reacting to the judgment, a spokesperson for the Nestoil Group welcomed the decision and said the company would continue engaging with stakeholders while maintaining its operations.
“We welcome the clear and well-reasoned judgment of the Federal High Court. We remain committed to engaging constructively with all stakeholders and to the continued responsible development of OML 42 for the benefit of Nigeria,” the spokesperson said.
The company described the decision as providing legal clarity around the enforcement of security interests, particularly the requirement that the underlying security must first crystallise before enforcement rights can be exercised.
The judgment also provides immediate relief for Neconde at a time when its interest in OML 42 remains a significant part of the Nestoil Group’s upstream oil and gas operations.
Nestoil said it and Neconde would remain focused on operational performance, value creation and their contribution to Nigeria’s energy sector notwithstanding the dispute.
Nestoil is an indigenous Nigerian energy and infrastructure company with interests spanning oil and gas exploration and production, engineering, construction and marine services.
Through Neconde Energy Limited, the group holds interests in OML 42, one of the assets around which the present receivership dispute arose.
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