The Supreme Court has ruled that First Bank failed to fulfil its obligations under its Memorandum of Understanding (MoU) with General Hydrocarbons Limited (GHL), ordering the immediate release of crude oil aboard the FPSO Tamara Tokoni to the oil firm.

In a unanimous judgment delivered by a five-member panel, the apex court held that the dispute between the parties was a contractual matter and not an admiralty case, ruling that both the Federal High Court and the Court of Appeal lacked jurisdiction to hear the suit.

The court consequently set aside the Court of Appeal’s decision, which had ordered the arrest and proposed sale of the crude cargo, and directed the Chief Registrar of the Court of Appeal and the Admiralty Marshal to release the cargo to GHL without delay.

Delivering the lead judgment, Justice Emmanuel Agim, read by Justice Habeeb Abiru, held that First Bank’s claim arose from an alleged breach of a financing agreement relating to the payment of proceeds from crude oil sales into a designated account.

The Supreme Court ruled that the financing agreements between the parties did not create any legal or equitable mortgage or security interest over the crude oil, adding that the dispute was essentially a commercial and banking matter rather than one falling within admiralty jurisdiction.

The judgment restored GHL’s control over the crude cargo and nullified all previous orders authorising its arrest and sale.

Reacting to the ruling, GHL’s counsel, Ojukwu Chikoso (SAN), said the decision confirmed that First Bank failed to meet its obligations under the financing arrangement.

He further claimed that Nigeria lost more than $70 million in potential crude oil revenue because the cargo remained tied down during the legal dispute while global oil prices declined significantly.

Chikoso also called on the Central Bank of Nigeria to strengthen regulatory oversight of commercial banks, warning that financing disputes should not be allowed to disrupt crude oil production and exports.

The dispute arose from First Bank’s claim that GHL owed about $19 million under financing arrangements linked to OML 120. GHL, however, denied the claim, insisting that First Bank breached the parties’ 2021 Memorandum of Understanding and that no outstanding payment was due.