First Bank of Nigeria Plc (FBN) has obtained a Federal High Court order in Port Harcourt, Rivers State, to arrest a cargo of crude oil aboard the Floating Production Storage and Offloading (FPSO) vessel, Tamara Tokoni, in an ongoing legal dispute with General Hydrocarbons Limited (GHL).
The court, presided over by Justice E.A. Obile, ruled in favor of FBN’s motion to secure the crude oil cargo, valued at $19,752,304.84, pending the provision of a satisfactory guarantee from a first-class Nigerian bank.
Court Proceedings and Rulings
The court order was issued in response to a motion ex parte filed by FBN on January 9, 2025. The bank sought to ensure the cargo was secured against potential dissipation, citing GHL’s alleged failure to meet contractual obligations.
Justice Obile ruled:
- Arrest and Detention of Cargo
The court ordered the arrest, attachment, or lien of the entire crude oil cargo aboard FPSO Tamara Tokoni. The cargo is to remain detained until a satisfactory guarantee of $19,752,304.84 plus interest and costs is provided by the defendants. - Involvement of Security Agencies
The court directed officers of the Nigerian Navy, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Maritime Administration and Safety Agency (NIMASA), and the Harbour Master of the Nigerian Ports Authority to assist the Admiralty Marshall in enforcing the order. - Preventing Unauthorized Interference
A notice of arrest issued on January 10 cautioned against any attempt to remove or interfere with the detained cargo without explicit written authorization from the Admiralty Marshall.
The case has been adjourned to February 10, 2025, for further proceedings.
Background of the Dispute
First Bank explained in a public statement that the legal dispute arose from credit facilities extended to GHL for the development of oil mining lease assets. The loans were backed by robust agreements that detailed the obligations of both parties and included security arrangements to safeguard the transaction.
However, the bank alleged that GHL violated critical terms of the agreement, including the diversion of project proceeds.
“At the root of the present dispute is First Bank’s demand for good governance and transparency in the transaction, which GHL rejected,” the bank stated.
Proposed Measures and GHL’s Response
FBN proposed appointing an independent operator, mutually acceptable to both parties, to manage the financed assets. This measure aimed to ensure transparency, enhance stakeholder visibility, and protect the assets’ value.
However, GHL declined the proposal and instead requested additional funding, which the bank deemed unjustifiable under the circumstances.
GHL’s refusal to fulfill the required terms for additional funding led the company to initiate arbitration proceedings and seek preservative orders from the Federal High Court.
First Bank’s Position
FBN emphasized its commitment to transparency and good governance, refuting what it described as “sponsored but false narratives” in certain media outlets. The bank underscored the importance of adhering to contractual obligations to protect stakeholder interests and maintain value creation.
Implications and Next Steps
The court’s decision to arrest the crude oil cargo underscores the seriousness of the dispute and highlights the bank’s determination to safeguard its interests. As the case progresses, the legal proceedings will clarify the obligations and responsibilities of both parties, potentially setting a precedent for governance and accountability in commercial transactions involving significant assets.
The adjourned hearing on February 10, 2025, is expected to provide further insights into the resolution of the dispute and the future of the detained cargo.
