In a significant ruling, the Federal High Court of Nigeria has set aside the appointment of a receiver over Neconde and its interests in Oil Mining Lease (OML) 42 by First Bank. The court's decision was delivered in the case of Glencore Energy UK Ltd and others versus Abubakar Sulu-Gambari, SAN, and others. The judge, Honourable Justice Osiagor, held that the lenders of Nestoil, acting through FBN Trustees, cannot enforce their facility by appointing a receiver over Neconde or its interest in OML 42.
The court's judgment was based on the fact that the Deed of Charge has not yet crystallized, which is a critical step before enforcement rights can be exercised. As a result, the court declared the receiver's appointment invalid and ordered it to be set aside completely. This ruling provides critical legal clarity and safeguards Neconde's operations and assets at a time when the company continues to play a vital role in Nigeria's upstream oil and gas sector.
The court further granted an injunction restraining the lenders from taking any enforcement steps against Neconde or appointing a receiver over the company or its interest in OML 42 until the Deed of Charge crystallizes. This decisive ruling reinforces the principle that security interests must crystallize before enforcement rights can be exercised, providing important certainty for Nigerian corporate borrowers and the wider energy sector.
A spokesperson for the Nestoil Group welcomed the judgment, saying it was clear and well-reasoned. The group remains committed to engaging constructively with all stakeholders and to the continued responsible development of OML 42 for the benefit of Nigeria. The judgment is a significant development in the ongoing dispute over Neconde's interests in OML 42.
Nestoil Group and Neconde remain focused on operational excellence, value creation, and contributing to Nigeria's energy security. The group is a leading indigenous Nigerian energy and infrastructure company with interests spanning oil and gas exploration and production, engineering, construction, and marine services. Through its Neconde Energy Limited, the group holds significant interests in OML 42.
The Nestoil Group's commitment to sustainable development of Nigeria's hydrocarbon resources has been reinforced by the court's ruling. The group continues to play a vital role in Nigeria's upstream oil and gas sector, and the judgment provides critical legal clarity and safeguards for its operations and assets.
The court's ruling has significant implications for Nigerian corporate borrowers and the wider energy sector, providing important certainty on the principle that security interests must crystallize before enforcement rights can be exercised. The Nestoil Group and Neconde will continue to focus on operational excellence and value creation.
Key points
- The Federal High Court of Nigeria has invalidated First Bank's appointment of a receiver over Neconde's interests in Oil Mining Lease 42.
- The court's ruling was based on the fact that the Deed of Charge has not yet crystallized.
- The judgment provides critical legal clarity and safeguards Neconde's operations and assets in Nigeria's upstream oil and gas sector.
