The Supreme Court has ordered the Chief Registrar of the Court of Appeal and the Admiralty Marshal to immediately release the crude oil aboard the FPSO Tamara Tokoni to General Hydrocarbons Limited.
In a unanimous judgment delivered on Friday, the apex court held that the dispute between First Bank of Nigeria and General Hydrocarbons Limited was contractual in nature and did not fall within the admiralty jurisdiction of the Federal High Court.
The five-member panel consequently allowed the appeal filed by General Hydrocarbons and set aside the judgment of the Court of Appeal, which had earlier ruled in favour of First Bank in respect of the crude cargo aboard the floating production, storage and offloading vessel.
The Supreme Court held that both the Federal High Court and the Court of Appeal lacked jurisdiction to entertain the matter as an admiralty action.
The panel comprised Justices Uwani Musa Abba Aji, Adamu Jauro Salawa, Mohammed Lawal Garba Agim, Tijjani Abubakar and Habeeb Adewale Abiru, who read the lead judgment.
The court directed that the crude oil aboard the FPSO Tamara Tokoni be handed over to General Hydrocarbons forthwith and without delay.
The ruling effectively overturns the Court of Appeal’s decision, which had ordered the seizure of the crude oil and its preservation pending the resolution of the dispute between the parties.
The case arose from a commercial and financing dispute between First Bank and General Hydrocarbons over Oil Mining Lease 120.
General Hydrocarbons, chaired by media entrepreneur Nduka Obaigbena, holds the licence for OML 120.
Under a 2021 project finance and subrogation agreement, First Bank was said to have provided funding for the exploration and development of the asset, with the parties allegedly entering into a 50:50 profit-sharing arrangement.
First Bank claimed that General Hydrocarbons defaulted on its obligations and owed the bank about $225.8 million.
The bank also alleged that proceeds from crude oil sales, said to have been pledged as loan collateral, were diverted.
General Hydrocarbons denied the allegations and maintained that First Bank breached the funding agreements by failing to properly finance the development of the asset.
The company also pursued counterclaims reportedly exceeding $1 billion in damages before different legal forums.
As the dispute escalated, First Bank approached the Federal High Court under admiralty jurisdiction, seeking to secure the crude oil stored aboard the FPSO Tamara Tokoni.
The bank argued that the cargo required arrest and preservation by the Admiralty Marshal because it was located on a maritime vessel.
The Federal High Court granted interim orders, while the Court of Appeal subsequently upheld steps relating to the seizure and preservation of the crude cargo.
General Hydrocarbons challenged the decisions, arguing that the underlying dispute was a commercial debt and contractual disagreement, not an admiralty claim.
The company contended that First Bank had invoked the wrong legal procedure and that the lower courts lacked jurisdiction to treat the matter as an admiralty action.
The Supreme Court agreed with General Hydrocarbons.
The apex court held that because the dispute arose from contractual obligations and financing arrangements, it could not properly be converted into an admiralty matter merely because the crude oil was aboard an FPSO.
The court therefore set aside the Court of Appeal’s decision and ordered the immediate release of the crude oil to General Hydrocarbons.
The decision is significant because it draws a clear line between contractual debt disputes and admiralty claims, reinforcing the principle that courts must first have proper subject-matter jurisdiction before making orders affecting property or assets.
With the judgment, the Supreme Court has effectively removed the crude cargo from the custody created by the lower court orders and restored control to General Hydrocarbons.
The ruling is expected to shape further proceedings between the parties, especially in relation to the broader commercial dispute, alleged debt obligations, counterclaims and any arbitration or contractual remedies available under the project finance agreement.
The post “Contractual Dispute, Not Admiralty Matter” — Supreme Court Orders Release Of Crude Oil Aboard FPSO Tamara Tokoni To General Hydrocarbons appeared first on TheNigeriaLawyer.
