Supreme Court’s Verdict Restores Nestoil, Neconde’s Control, as Senior International Lenders Move Against FBN Trustees

The Supreme Court of Nigeria recently delivered a landmark judgment, setting aside the Court of Appeal's orders that had frozen the assets of Nestoil Limited and Neconde Energy, thereby restoring control to the indigenous oil and gas companies. This decision, which rebuked the appellate court for jurisdictional overreach and misuse of *ex parte* processes, has significant implications for corporate debt enforcement and due process in Nigeria. Concurrently, a consortium of international senior lenders is intensifying its legal challenge against FBN Trustees and its appointed Receiver-Manager, alleging breaches of fiduciary duty and the creation of unauthorized security interests. This multifaceted legal battle underscores critical issues surrounding creditor rights, trustee accountability, and the enforcement of security over strategic oil assets in the Nigerian financial landscape.

Nigeria's corporate finance and insolvency landscape has been significantly impacted by a recent Supreme Court judgment concerning Nestoil Limited and Neconde Energy. On June 1, 2026, the apex court delivered a decisive ruling that overturned previous orders freezing the assets of these prominent indigenous oil and gas firms, effectively restoring their operational control. This judgment has been widely watched, not only for its immediate impact on a multi-billion dollar debt dispute but also for its broader implications on the powers of appellate courts, the application of *ex parte* orders, and the enforcement of creditor rights in Nigeria.

The Supreme Court's pronouncement has, in turn, invigorated a separate but related legal offensive by a consortium of international senior lenders. These lenders are poised to return to court on June 22, 2026, to challenge what they describe as unlawful actions by FBN Trustees and its appointed Receiver-Manager. Their claims, which include allegations of breach of fiduciary duty and the creation of unauthorized security interests, add another complex layer to an already intricate legal saga, highlighting fundamental questions about the integrity of trust arrangements and the enforcement of security in Nigeria's energy sector.

The genesis of this protracted legal dispute lies in debt recovery proceedings initiated by a group of lenders, including FBNQuest Merchant Bank and First Trustees, against Nestoil and Neconde Energy. The lenders alleged liabilities exceeding $1.1 billion and substantial naira-denominated obligations arising from financing arrangements linked to strategic oil assets. In October 2025, the Federal High Court in Lagos granted an *ex parte Mareva injunction*, which froze the assets, bank accounts, and shareholdings of Nestoil and Neconde across numerous financial institutions.

However, Nestoil and Neconde challenged this order, arguing that such *ex parte* injunctions automatically lapse after 14 days under the Federal High Court Civil Procedure Rules once an application for their discharge is filed. Justice Daniel Osiagor of the Federal High Court subsequently upheld this position on November 20, 2025, ruling that the *ex parte* order had indeed expired by operation of law. Despite this, on November 29, 2025, the Court of Appeal, presided over by Justice Yargata Nimpar, granted an interim restorative injunction that effectively reinstated the Mareva order and returned control of Nestoil's assets and operations to a receiver-manager appointed by the lenders. This appellate intervention became the focal point of the subsequent Supreme Court challenge.

The Supreme Court's judgment, delivered on June 1, 2026, by a five-member panel led by Justice Stephen Adah, was a strong rebuke of the Court of Appeal's actions. The apex court held that the Court of Appeal had exceeded its jurisdiction by granting sweeping *ex parte* orders and misusing the judicial process, particularly by issuing injunctive orders and a stay of proceedings in a matter that was still properly before the Federal High Court. This ruling underscores the critical importance of due process and the limitations on appellate courts' intervention in interlocutory matters, especially when such interventions effectively pre-empt the substantive determination of a case at the trial court. The Supreme Court's decision effectively dismantled the legal scaffolding that had enabled the attempted takeover of Nestoil and Neconde's assets, restoring full control to the companies.

Parallel to this, a consortium of international senior lenders, including Glencore Energy UK Limited, Africa Finance Corporation, and Mauritius Commercial Bank, has initiated a separate action (Suit No FHC/L/CS/2545/2025) against FBN Trustees and its appointed Receiver-Manager, Abubakar Sulu Gambari SAN. These lenders allege serious breaches of fiduciary duty and trust, specifically claiming that FBN Trustees, originally appointed to protect their interests, unlawfully created a second, unauthorized security interest over Neconde's stake in Oil Mining Lease 42 (OML 42) without the requisite consent. They contend that this action violated binding loan terms and was an attempt to benefit a consortium of Nigerian banks that, in their view, had no legitimate debt claim against Neconde. The Companies and Allied Matters Act (CAMA) 2020, which primarily governs receivership in Nigeria, outlines the duties and powers of receivers and managers, emphasizing their role in realizing security for the benefit of the appointing party while also managing the company's interests. The international lenders' argument that there was no legal trigger for FBN's appointment of a receiver-manager directly challenges the fundamental premise of the receivership under CAMA.

The Supreme Court's verdict in favour of Nestoil and Neconde marks a pivotal moment in Nigerian corporate jurisprudence, reinforcing the principles of judicial restraint and due process, particularly concerning *ex parte* applications and appellate jurisdiction. For practitioners, this judgment serves as a crucial reminder of the strictures surrounding interim injunctions and the need for adherence to procedural rules, especially the 14-day lifespan of *ex parte* orders under the Federal High Court Civil Procedure Rules. The restoration of control to Nestoil and Neconde ensures that the substantive debt dispute will now proceed without the encumbrance of frozen assets and a receiver-manager whose appointment lacked proper legal foundation.

Looking ahead, the ongoing legal battle initiated by the international senior lenders against FBN Trustees presents another critical area for observation. The allegations of breach of fiduciary duty and unauthorized security creation raise profound questions about trustee accountability and the integrity of security arrangements in complex financing deals. The outcome of Suit No FHC/L/CS/2545/2025, set to resume on June 22, 2026, will undoubtedly shape future practices in syndicated lending, security perfection, and the role of trustees in Nigeria's financial sector. Legal professionals must closely monitor these developments, as they will likely influence how corporate debt is structured, enforced, and litigated, particularly within the vital oil and gas industry.