Nigeria’s Supreme Court has ruled in favour of General Hydrocarbons Limited (GHL) in a closely watched dispute with First Bank of Nigeria Plc over crude oil stored aboard the Floating Production, Storage and Offloading (FPSO) vessel Tamara Tokoni, bringing a significant chapter in the parties’ legal battle to a close.
In a unanimous judgment delivered by a five-member panel on Friday, the apex court allowed GHL’s appeal, set aside the decisions of the lower courts and dismissed the suit filed by First Bank. The court also directed that the crude oil aboard the FPSO be released to General Hydrocarbons.
The panel, comprising Justices Uwani Musa Abba Aji, Adamu Jauro, Emmanuel Agim, Tijjani Abubakar and Habeeb Adewale Abiru, held that the dispute arose primarily from contractual obligations between the parties rather than an admiralty claim. On that basis, the Supreme Court found that the Federal High Court lacked jurisdiction to entertain the matter as an admiralty proceeding.
The dispute stemmed from financing arrangements between GHL and First Bank, with the lender seeking to retain control of crude oil stored aboard the FPSO as security for facilities extended to the oil company. First Bank alleged that GHL had failed to meet its repayment obligations, while GHL argued that the dispute should be determined under the contractual agreements governing the financing relationship rather than through admiralty proceedings.
By setting aside the decisions of the Federal High Court and the Court of Appeal, the Supreme Court effectively reaffirmed the principle that the substance of a dispute, not merely the involvement of a vessel or offshore asset determines whether it qualifies as an admiralty matter.
The ruling is expected to provide greater legal clarity for participants in Nigeria’s oil and gas and maritime sectors, where offshore assets and crude oil cargoes are frequently linked to project financing and security arrangements. The decision underscores the importance of identifying the proper legal framework for resolving commercial disputes involving complex financing structures.
For lenders, producers and investors, the judgment highlights the significance of carefully structured contractual agreements and the need to pursue enforcement actions through the appropriate legal channels. It also reinforces the role of jurisdiction in commercial litigation, a factor that can materially affect the outcome of disputes involving high-value energy assets.
The decision is likely to be closely studied by financial institutions, energy companies and legal practitioners as a reference point for future disputes involving offshore oil assets and financing agreements in Nigeria.
