Nestoil has secured a major legal victory in its long running debt dispute with lenders linked to the FirstBank ecosystem, after Nigeria’s Supreme Court set aside a Court of Appeal order that had frozen the assets of Nestoil Limited, Neconde Energy Limited, and their principal promoters.
The case has become one of Nigeria’s most important corporate debt battles because it sits at the centre of banking risk, oil asset control, creditor enforcement, judicial procedure, and the future of large indigenous energy companies.
At the heart of the fight is an alleged debt of more than $1 billion, alongside substantial naira obligations said to be around ₦430 billion. The lenders, led by FBNQuest Merchant Bank Limited and First Trustees Limited, have been trying to recover the alleged debt through receivership and asset control.
Nestoil and Neconde, on the other hand, have pushed back strongly against the enforcement process. Their argument has not simply been that the lenders are wrong. Their more immediate legal argument has been that the freezing orders and receivership enforcement steps used against them were procedurally defective, excessive, and capable of crippling the companies before the main debt dispute was fully heard.
The Supreme Court has now handed Nestoil and Neconde a crucial victory on that procedural battlefield. But this must be understood correctly.
The Supreme Court did not rule that Nestoil owes nothing. It did not cancel the alleged debt. It did not finally decide the entire commercial dispute.
What it did was set aside the Court of Appeal order that restored the lenders’ control position. That means the lenders have suffered a serious setback, but the full debt recovery case is still alive.
How the dispute began(Background Story)
The Nestoil debt dispute did not appear from nowhere. It grew out of years of financing arrangements linked to oil and gas assets, particularly assets connected to Neconde Energy and Oil Mining Lease 42, commonly known as OML 42.
Neconde Energy was incorporated in 2010 as an independent oil and gas company created to acquire and develop petroleum assets. In 2011, the company successfully bid for a 45 percent stake in OML 42 from the Shell Petroleum Development Company, Total Exploration and Production Nigeria Limited, and Nigeria Agip Oil Company Limited.
The acquisition was valued at about $585 million. After the deal, the ownership structure of OML 42 stood at 45 percent for Neconde and 55 percent for Nigerian Petroleum Development Company, a subsidiary of NNPC.
This background is important because OML 42 is not an ordinary asset. It is a strategic oil asset in Nigeria’s Niger Delta. It contains producing and undeveloped fields, and it has long been seen as one of the assets that helped define the rise of indigenous Nigerian participation in upstream oil and gas. For lenders, such an asset can serve as a powerful repayment source and security support. For the borrower, control over the asset can determine survival.
That is why the legal fight became so intense. The matter was not only about repayment. It was also about who controlled the assets and operations while the case was still being argued in court.
Why FirstBank linked lenders were involved
The lenders in the case include FBNQuest Merchant Bank Limited and First Trustees Limited. Both are connected to the wider FirstBank group structure.
This is why the matter has been widely described as a setback for lenders linked to Femi Otedola. Otedola is the Group Chairman of First HoldCo Plc, the parent institution within the FirstBank ecosystem.
His name matters because he has been publicly associated with a major clean up of First HoldCo’s balance sheet. In January 2026, Otedola explained that First HoldCo took a huge one time hit of ₦748 billion to recognise bad loans rather than continue pretending that old credit problems did not exist.
That statement was significant. It showed a tougher approach to legacy loans, non performing exposures, and balance sheet discipline.
First HoldCo’s own investor materials had already shown that its growth in non performing loans was driven mainly by one oil and gas loan, although that presentation did not publicly name the borrower. Market reports later connected the wider stress in the banking sector to large oil and gas exposures, including Nestoil related claims. This is the financial pressure behind the courtroom battle.
For FirstBank linked lenders, the objective was clear which was to recover the alleged debt and protect the collateral or assets tied to the lending.
For Nestoil and Neconde, the concern was equally clear: stop enforcement steps that could hand operational control to creditors before the substantive case was finally determined.
The October 2025 asset freeze
The dispute escalated dramatically in October 2025.
On October 22, 2025, Justice Dehinde Dipeolu of the Federal High Court in Lagos granted an ex parte Mareva injunction against Nestoil Limited, Neconde Energy Limited, Ernest Azudialu Obiejesi, and Nnenna Obiejesi.
A Mareva injunction is a freezing order. It is used to stop a defendant from moving, hiding, selling, or dissipating assets before a court decides a dispute. In commercial cases, lenders often seek it when they believe assets may disappear before judgment. The order in the Nestoil matter was sweeping.
It froze assets, bank accounts, funds, and shareholdings across more than 20 financial and corporate institutions. It also authorised First Trustees Limited and FBNQuest Merchant Bank Limited, acting for a consortium of creditor banks, to take possession of Nestoil’s assets through a receiver manager. Abubakar Sulu Gambari, SAN, was appointed as receiver manager.
The order also allowed enforcement agencies to assist in taking control of the assets. Nestoil’s Lagos headquarters, Nestoil Tower, became a major symbol of the dispute after the receiver took possession of the head office.
This was the point where a debt recovery case became a national business story.
When police and other security agencies enter a corporate headquarters over a debt dispute, the market reads it as more than litigation. It becomes a question of reputation, survival, creditor power, and confidence in the legal process.
What FirstBank lenders gained at first
First HoldCo’s investor materials had also shown that its rise in non performing loans was driven mainly by one oil and gas loan, although the borrower was not publicly named in that presentation. Market reports later linked wider banking sector stress to large oil and gas exposures, including claims connected to Nestoil. This is the financial pressure behind the courtroom fight.
For the lenders, the objective was clear: recover the alleged debt and protect assets tied to the lending. For Nestoil and Neconde, the concern was also clear: stop enforcement steps that could hand operational control to creditors before the substantive case was finally determined.
The dispute escalated sharply on October 22, 2025, when Justice Dehinde Dipeolu of the Federal High Court in Lagos granted an ex parte Mareva injunction against Nestoil Limited, Neconde Energy Limited, Ernest Azudialu Obiejesi, and Nnenna Obiejesi.
A Mareva injunction is a freezing order used to stop a defendant from moving, selling, hiding, or dissipating assets before a court determines a dispute. Lenders often seek such orders in commercial cases where they fear that assets may disappear before judgment. In the Nestoil case, the order was sweeping.
It froze assets, bank accounts, funds, and shareholdings across more than 20 financial and corporate institutions. It also authorised First Trustees Limited and FBNQuest Merchant Bank Limited, acting for a consortium of creditor banks, to take possession of Nestoil’s assets through a receiver manager. Abubakar Sulu Gambari, SAN, was appointed as receiver manager.
The order also allowed enforcement agencies to assist in taking control of the assets. Nestoil Tower, the company’s Lagos headquarters, quickly became a symbol of the dispute after the receiver moved to take possession of the premises.
That was the moment the matter moved from a private debt recovery process into a major national business story. When security agencies become involved in taking possession of a corporate headquarters over a debt dispute, the issue becomes larger than litigation. It raises questions about business survival, creditor power, corporate reputation, and confidence in the legal process.
At the first stage, the lenders gained enormous leverage. The October order froze the assets of Nestoil, Neconde, and related parties, reducing the risk that assets could be moved before final judgment. It also placed the companies under receivership control, giving the receiver manager practical influence over assets and operations. Most importantly, it shifted pressure onto Nestoil and Neconde because once a company is locked out of accounts, assets, or headquarters, it is forced to fight urgently.
In simple terms, the lenders had moved from ordinary debt recovery to operational control. That was why the matter became so sensitive.
Nestoil and Neconde challenged the order. Their core argument was that the ex parte order had expired by operation of law. According to the position reported in court, they argued that once a motion to discharge the order was filed, the interim order could not continue indefinitely.
The matter was later reassigned to Justice Daniel Osiagor of the Federal High Court in Lagos. On November 20, 2025, Justice Osiagor held that the ex parte Mareva order had lapsed and was no longer subsisting. This became the first major relief for Nestoil and Neconde.
That ruling weakened the receivership enforcement process and gave Nestoil room to regain control. For the lenders, it was a serious blow. If the asset freeze had expired, then the legal basis for continued control became questionable. That meant the lenders risked losing the protective shield they had obtained in October.
The lenders did not accept that outcome. FBNQuest Merchant Bank and First Trustees approached the Court of Appeal, and on November 29, 2025, the appellate court granted an interim restorative injunction in their favour. The order reversed the practical effect of Justice Osiagor’s decision and restored the receivership position.
The Court of Appeal also restrained Nestoil, Neconde, and their agents from obstructing the receiver manager pending the hearing of the appeal. This was the second dramatic turn in the case. The lenders had lost ground at the Federal High Court, but they recovered it at the Court of Appeal. In practical terms, control moved back toward the receiver manager.
For Nestoil and Neconde, the Court of Appeal order was dangerous because it revived the asset freeze and control structure they had just fought off. That was why they proceeded to the Supreme Court.
The dispute then entered another complicated phase over who had the right to represent Nestoil and Neconde in court. The question appeared technical, but it was central to the case. If a receiver manager had been appointed over a company, could the receiver decide which lawyers would represent that company? Or could the company’s original board and promoters still instruct lawyers to challenge the receivership itself?
This issue created serious courtroom tension. In December 2025, proceedings at the Court of Appeal stalled after competing lawyers appeared for the parties. Some lawyers appeared based on the receiver manager’s authority, while others insisted they had been properly instructed by Nestoil and Neconde.
The issue was explosive because whoever controlled legal representation could influence the defence of the companies. In January 2026, the Court of Appeal disqualified senior lawyers, including Wole Olanipekun and Muiz Banire, from representing Neconde and Nestoil. The reasoning was that the receivership had suspended the powers of the promoters to appoint counsel.
The Supreme Court later took a different view in a related ruling. It restored the right of the companies to retain lawyers of their choice while challenging the validity of the receivership itself. That position was important because the apex court recognised a possible conflict of interest. If lawyers appointed by a receiver manager represented the same companies challenging that receiver, the companies could lose independent legal protection.
This became one of the strongest legal lessons from the case: a company challenging a receiver must still have a meaningful right to independent representation.
On June 1, 2026, the Supreme Court delivered the latest major ruling. A five member panel of the apex court set aside the Court of Appeal order that had frozen the assets of Nestoil and Neconde and restored the receiver manager’s control position.
Justice Stephen Adah, who delivered the lead judgment, held that the Court of Appeal exceeded its powers when it granted the ex parte application against the companies. The Supreme Court also criticised the appellate court for assuming jurisdiction when the matter was not properly before it. It further faulted the Court of Appeal for granting a stay of proceedings at the Federal High Court in Lagos.
In plain language, the Supreme Court said the Court of Appeal went too far.
That is why the judgment is a major victory for Nestoil and Neconde. It removed the Court of Appeal order that had given the lenders renewed control. It also cleared the path for the matter to return to the Federal High Court, where the substantive debt dispute can continue.
However, what the lenders lost must be properly understood. They did not give up the alleged debt. They did not give up their legal claim. They did not lose the right to continue the recovery case. What they lost was interim control.
Before the Supreme Court ruling, the lenders had a powerful enforcement advantage. Through the asset freeze and receivership orders, they could restrict company assets, influence operations, and preserve disputed assets under receiver control. After the Supreme Court ruling, that advantage was weakened.
The lenders lost the immediate benefit of the Court of Appeal order. They lost the ability to rely on that order to keep Nestoil and Neconde under the same level of control. They also lost a major tactical weapon in the litigation.
That is the real meaning of the setback.
For Nestoil, the ruling gives breathing space. For the lenders, it forces a return to the slower and more difficult route: prove the debt, defend the validity of the enforcement process, and continue the substantive claim in the trial court.
It is also important not to misread the judgment. The Supreme Court did not say the alleged $1.1 billion debt is false. It did not say Nestoil and Neconde have no liabilities. It did not say the lenders acted without any commercial basis. It did not end the dispute.
The ruling was mainly about procedure, jurisdiction, and the limits of ex parte enforcement. A borrower can win a procedural battle and still face a serious debt case later. A lender can lose an interim order and still win the substantive case if it proves the debt and the validity of the security documents. So, the real battle is still ahead.
The case matters far beyond Nestoil. Nigerian banks are under pressure from rising non performing loans, especially in sectors affected by currency volatility, high interest rates, weak cash flow, and legacy restructuring. Oil and gas loans are particularly sensitive because they are often large, dollar linked, asset backed, and exposed to operational disruptions.
When a large oil and gas exposure becomes distressed, the effect can move beyond one borrower. It can affect bank profits, shareholder dividends, regulatory capital, and investor confidence. This is why the Nestoil debt dispute has drawn so much attention.
For lenders, the fear is simple: if large borrowers can slow down recovery through litigation, banks may be left carrying huge impaired loans for years. For borrowers, the fear is also simple: if banks can use ex parte orders to freeze companies and install receivers before a full hearing, businesses can be damaged or destroyed before the court determines the true debt position.
The Supreme Court’s judgment appears to be drawing a boundary. The court is not saying lenders cannot recover debts. It is saying creditors must not use interim orders in a way that effectively determines the case before the affected party is fully heard.
The case also matters for indigenous oil and gas operators. Nigeria has spent years encouraging local participation in oil and gas. Indigenous companies have acquired assets from international oil companies, raised large financing, and taken on complex upstream responsibilities. But many of these deals were debt financed.
That creates vulnerability. When oil prices fall, production is disrupted, pipelines are attacked, crude theft rises, or exchange rates weaken, repayment can become difficult. The result is that some local operators end up trapped between lenders demanding repayment and assets that are not producing enough cash.
This is why OML 42 is central to the story. It represents both the promise and pressure of indigenous oil asset ownership. If Nestoil and Neconde lose control of such assets through receivership, it sends one message to the market. If lenders cannot enforce security effectively, it sends another.
The Supreme Court judgment will therefore influence how banks, oil companies, investors, and lawyers think about future financing deals.
The broader legal lesson is that ex parte orders must remain temporary and limited. An ex parte order is granted without hearing the other side. Because of that, courts are expected to use it carefully. It should preserve the subject matter of a dispute, not hand one side the final benefit of the case.
In this dispute, the Supreme Court was clearly uncomfortable with how far the Court of Appeal order went. That matters for future corporate debt cases. Banks may still seek freezing orders. Receivers may still be appointed. Borrowers may still face asset control where loan agreements allow it. But courts are now likely to face stronger scrutiny when interim orders appear too broad, too harsh, or too close to final relief.
The case now returns to the substantive dispute. The lenders will still need to pursue recovery of the alleged debt. They will need to prove the amount owed, the validity of the financing arrangements, the enforceability of the security documents, and the lawfulness of the receivership process.
Nestoil and Neconde will continue to challenge the lenders’ claims and enforcement strategy. There may also be negotiations behind the scenes. In disputes of this size, litigation is often only one part of the pressure strategy. Settlement, restructuring, asset sale, refinancing, or staged repayment can all become possible depending on the strength of each side after major court rulings.
For now, Nestoil has momentum. The lenders still have claims. The court has not ended the matter.
Nestoil’s Supreme Court victory is therefore a major setback for FirstBank linked lenders, but it is not the end of the $1.1 billion debt dispute. The real meaning of the judgment is that the lenders lost their interim control advantage. The Supreme Court set aside the Court of Appeal order that had restored the asset freeze and receivership control over Nestoil and Neconde.
That gives Nestoil breathing room and restores its ability to fight the case from a stronger position. But the alleged debt remains unresolved. The lenders can still pursue the substantive claim. Nestoil can still challenge the claim and the enforcement process. The Federal High Court will still have to examine the real commercial issues behind the dispute.
This is why the case remains one of Nigeria’s most important business and legal battles. It is not just about one company owing money. It is about how banks recover large debts, how courts control ex parte orders, how indigenous oil assets are protected or enforced against, and how far creditors can go before a company has been fully heard.
For now, Nestoil has won the latest round. The final round has not yet been fought
