FirstBank Headquarters (PHOTO CREDIT: Bank’s website)

First Bank of Nigeria Limited (FirstBank) has recorded a landmark victory at the Court of Appeal, strengthening its legal position in its high-stakes dispute with General Hydrocarbons Limited (GHL).

In a judgment delivered on Thursday, the Court of Appeal—specially convened during its vacation at the instance of GHL—set aside an earlier decision of the Federal High Court, Port Harcourt, which had dismissed FirstBank’s claims over the diversion of proceeds from the sale of crude oil pledged as collateral for loan facilities.

Background to the Dispute

The dispute revolves around crude oil aboard the FPSO Tamara Tokoni, which GHL had pledged to FirstBank as security for substantial loan facilities. Contrary to the pledge, GHL allegedly diverted proceeds from the sale of the cargo, prompting the bank to seek judicial intervention.

The Federal High Court initially treated the matter as a simple debt recovery claim and vacated the arrest of the crude oil cargo. Dissatisfied, FirstBank appealed, arguing that the case was maritime in nature and that the res (the crude oil) needed to be preserved.

Appeal Court’s Decision

The Court of Appeal upheld FirstBank’s position, affirming the maritime nature of the dispute and stressing the importance of preserving the crude oil cargo as the core subject of litigation.

In its ruling, the appellate court:

• Granted FirstBank’s appeal.
• Ordered the sale of the crude oil aboard the FPSO Tamara Tokoni.
• Directed that the proceeds be lodged in an interest-bearing escrow account under the custody of the Chief Registrar of the Court of Appeal.
• Mandated the Registrar to take possession of the cargo and safeguard it against dissipation or unauthorised disposal pending final resolution of the case at the trial court and arbitration.

Significance of the Ruling

This ruling marks a major milestone for FirstBank, reinforcing its commitment to protecting its assets, upholding the integrity of financial transactions, and safeguarding the interests of its stakeholders.