In a major legal victory for General Hydrocarbons Limited (GHL), the Federal High Court in Lagos has set aside a Mareva injunction that had frozen the assets of the oil and gas company and its directors in a $225.8 million loan dispute with First Bank Holdings Plc.

The court, ruling on the matter yesterday, upheld the arguments of GHL’s lead counsel, Abiodun Layonu (SAN), as well as Olumide Aju (SAN), who represented the 2nd to 5th defendants. The judge found that First Bank had obtained the freezing order in violation of an existing ruling from another court of equal jurisdiction.

At the heart of the ruling was the claim by GHL’s legal team that the Mareva order—which blocked the company’s access to its bank accounts and assets—was an abuse of court process. According to Layonu, First Bank failed to disclose that an earlier order by Justice Lewis-Allagoa, issued on December 12, 2024, had already restrained the bank from taking further action on the loan dispute until arbitration was concluded.

The court found that First Bank had deliberately “suppressed facts” in its ex-parte application for the Mareva injunction, misleading the judge into granting an order that should never have been issued in the first place.

Justice Dehinde Dipeolu, in his ruling, stated that when compared with the earlier order issued by Justice Ambrose Lewis-Allagoa in Suit No. FHC/L/CS/1953/2024, the Mareva injunction was incompatible and had to be set aside.

“The Mareva order granted by this court on 30th December 2024 is hereby set aside,” Justice Dipeolu ruled.

The judge emphasized that the Mareva order had been improperly obtained, adding that the court had no choice but to vacate it entirely.

Severe Financial Harm to GHL

Layonu and Aju argued that the Mareva injunction had caused severe financial harm to GHL and its directors. The order had restricted all commercial banks from dealing with GHL’s funds, effectively paralyzing its business operations.

GHL maintained that First Bank had acted in bad faith by obtaining the order through “fraudulent misrepresentation and concealment of material facts.”

The company accused the bank of misleading the court despite the existence of a previous ruling that prohibited such actions until the conclusion of arbitration.

Background of The $225.8m Loan Dispute

The legal battle between General Hydrocarbons Limited (GHL) and First Bank Holdings Plc stems from a loan facility of $225.8 million granted to GHL and its associated entities. The facility was intended to finance GHL’s operations in the oil and gas sector, with a particular focus on upstream exploration and production.

However, disagreements arose over repayment terms and other contractual obligations, leading to a breakdown in relations between the two parties. GHL insisted that it was not in default, while First Bank, through its subsidiary First Bank of Nigeria Limited, pursued legal action, seeking to recover the outstanding sum.

This dispute escalated when First Bank, on December 30, 2024, secured an ex-parte Mareva injunction from the Federal High Court in Lagos. The order froze GHL’s assets and bank accounts, as well as those of its directors and affiliated entities, including:

• GHL 121 Ltd
• Aimonte Nigeria Limited
• Schlumberger Nigeria Limited

The Mareva injunction, commonly referred to as a freezing order, is a powerful legal tool used to prevent a defendant from dissipating assets before the conclusion of a lawsuit. It effectively restricted all commercial banks from dealing with GHL’s funds, crippling its business operations.

However, GHL’s legal team quickly challenged the injunction, arguing that it was obtained through deception and suppression of facts.

GHL Directors Seek $1 Billion in Damages

Following the court’s decision, GHL directors have initiated legal proceedings worldwide against First Bank, seeking $1 billion each in damages for defamation and wrongful freezing of their accounts.

Additionally, GHL has filed a complaint with the Legal Practitioners Privileges Committee against First Bank’s lawyers, Babajide Koku (SAN) and Victor Ogude (SAN), alleging unprofessional conduct.

Meanwhile, attempts are reportedly being made to falsify the ruling on social media, with misleading documents being circulated to suggest that the court did not vacate the entire Mareva order.

However, court records confirm that Justice Dipeolu’s ruling completely overturned the Mareva injunction, not in part, but in its entirety.

What’s Next?

With the Mareva injunction vacated, GHL and its affiliates now have access to their frozen assets. The case has been adjourned to February 19, 2025, for further proceedings.

This ruling marks a significant legal setback for First Bank, which now faces multiple lawsuits and reputational damage over its handling of the dispute.