In what promises to be a long legal battle between First Bank of Nigeria (FBN) and General Hydrocarbons Limited (GHL) over a $225 million facility, the Court has ordered the arrest of the oil firm’s crude cargo, as GHL claims that its promoters have settled any liability owed the bank, but First Bank disagrees, insisting that there are still scores to be settled
By Edu Abade
The last may not have been heard on the case involving First Bank of Nigeria Limited (FBN) and General Hydrocarbons Limited (GHL) over a lingering feud on a purported loan granted GHL for oil exploration as Court orders arrest of crude oil cargo belonging to the oil firm.
Following the dispute a Federal High Court in Port Harcourt, Rivers State has granted an order to arrest and detain the crude oil cargo on board the Floating Production Storage and Offloading (FPSO) Vessel Tamara Tokoni belonging to General Hydrocarbons Ltd (GHL).
Justice E. A. Obile made the order based on an application by First Bank of Nigeria. The defendants are GHL, the crude oil cargo on board FPSO Tamara Tokoni, its owners, operators and the master of the vessel.
GHL is an oil exploration firm owned by Nduka Obaigbena, Chairman of Arise TV and publisher of ThisDay Newspapers.
It was learnt that based on the order, FPSO Vessel Tamara Tokoni was arrested by the Navy and that the arrest was made in the early hours of Thursday, January 16, 2025 on the high sea, even as Obaigbena insisted in a statement that GHL has resolved FirstBank financial challenges and discovered oil for Nigeria
The bank had obtained a Mareva injunction from the Federal High Court in Lagos restraining all banks in Nigeria from releasing funds to GHL and its directors: Obaigbena, Efe Damilola Obaigbena and Olabisi Eka Obaigbena.
In the latest order dated January 9, a copy of which our reporter obtained yesterday, Justice Obile held: “That order is granted arresting and/or attaching and/or liening the entire cargo of crude oil on board the Floating Production Storage and Offloading (FSPO) vessel Tamara Tokoni presently located at Rivers State or wherever she may be found within the jurisdiction of this Honourable Court pending the provision of a satisfactory guarantee from a first class Nigerian bank in the sum of $19,752,304.84 plus interest and costs by the said defendants to secure the plaintiff’s claim herein, until this Honourable Court otherwise orders.”
The court mandated the 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 (NPA) to enforce the order.
Justice Obile added: “That order is made directing officers of the Nigerian Navy, NUPRC, NIMASA, Harbour Master of the Nigeria Ports Authority to render necessary assistance to the Admiralty Marshall of this Honourable Court in giving effect to the order of arrest of the second defendant (crude cargo) in order to secure same and also take other steps including the provision of regular patrols and surveillance around her to prevent the first defendant (General Hydrocarbons) from dissipation until the order of this court has been complied with in respect of the arrest of the second defendant.”
The court adjourned the suit, marked FHC/PH/CS/02/2025, until February 10 for mention just as the Deputy Chief Registrar, Naanlang Dashe, also issued a notice of arrest.
It reads: “The above-named cargo, being in custody or possession of the Admiralty Marshall by virtue of a warrant from the Federal High Court, Port Harcourt, all persons are hereby cautioned not to attempt to remove same or interfere therewith without the authority in writing of the said Marshall or his substitutes, otherwise they will be immediately proceeded against.”
The warrant of arrest and detention states that the cargo of crude oil “currently located at Rivers State or any port within Nigeria territorial waters is about to leave Nigeria outside the jurisdiction of the court.”
It adds: “This is, therefore, to require and order you forthwith to arrest and detain the said cargo of crude oil on board the FPSO Vessel Tamara Tokoni and keep the same under detention until you shall receive further orders from the court.”
First Bank said it extended several credit facilities to GHL for the development of some oil mining lease assets, maintaining that while it diligently performed its obligations under the loan agreements, GHL allegedly breached them and diverted proceeds.
However, GHL denied owing First Bank and accused it of abusing the court process, which the bank dismissed insisting that it signed the agreement believing and trusting that First Bank would comply with its obligations to fund OML 120, “but it has clearly not done so.”
Meanwhile, in an earlier rebuttal titled: First Bank Clarifies Misleading Reports, Reassures Customers of Gold Standard Banking Services, the premier financial institution refuted Obaigbena’s earlier claims.
In a widely published advertorial in national dailies, it said: “Our attention has been drawn to recent media reports regarding a commercial transaction between First Bank of Nigeria Limited (First Bank) and General Hydrocarbons Limited (GHL) that is currently a subject of litigation.
“As a responsible and law-abiding corporate citizen of Nigeria with utmost respect for the courts, First Bank will not be able to offer comments on issues which are pending for determination by the courts, as such issues are sub-judice.
“However, we are constrained to issue the following clarifications to correct the sponsored but false narratives on the matter presented in some of the media publications. There is a subsisting commercial transaction between First Bank as lender, and GHL as borrower, where First Bank extended several credit facilities to GHL for the development of some Oil Mining Lease assets.
“These facilities are backed by very robust loan agreements executed by the parties in which the obligations of the parties are clearly defined and the security arrangement clearly spelt out. While First Bank has diligently performed its obligations under the loan agreements, 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 explained that upon its realization of breaches on the part of GHL including diversion of proceeds, First Bank requested that an independent operator mutually acceptable to both parties be appointed in line with the terms of the agreement, to operate the financed asset in a transparent manner that will bring greater visibility to the project, protect the interest of, and bring value to all stakeholders.
“Not only did GHL roundly reject this reasonable and fair request, rather GHL insisted that First Bank avails it with more funding. GHL refused to execute the terms of offer stipulated by the Bank for the availment of additional funding but rather proceeded to commence needless Arbitral proceedings.
GHL issued a notice to initiate arbitration and has no substantive claim pending at the Federal High Court. GHL approached the Federal High Court solely to seek preservative orders pending arbitration. Some of the preservative orders sought by GHL were granted while others were denied.
First Bank is the only party that filed a substantive claim against GHL at the Federal High Court and the subject matter of First Bank ‘s claim is not identical with the dispute GHL submitted to arbitration because First Bank’s claim is in respect of subsequent credit facilities granted to GHL and the offer letters and finance documents pertaining to the subsequent transactions clearly state that the disputes arising from the subsequent facilities are to be resolved by a court of competent jurisdiction in Nigeria and not by arbitration. Consequently, it is incorrect to assert that FirstBank abused the process of the court.
GHL off-took crude from the Floating Production Storage and Offloading (FPSO) vessel and diverted the proceeds. The Bank had no choice as a secured lender, under these circumstances of continued breaches, non-payment of due obligations and attempts to shield the Bank away from agreed security and repayment sources, than to approach the court for legal remedies, to preserve assets, recover the diverted proceeds, prevent reoccurrences and safeguard First Bank’s interest. It is clear to us that the courts do not support or protect illegalities and breaches of contracts.
First Bank has a long and very rich history of supporting and providing for the financial needs of its customers over its more than 130 years of unbroken existence. First Bank remains committed to ensuring that it continues to support legitimate business aspirations of its teeming customers. At the same time, First Bank is committed to the building of a strong credit culture where borrowers pay their debts when they borrow and will always take appropriate steps, within the ambit of the law, to resist attempts by borrowers to repudiate their repayment obligations.
We wish to assure First Bank’s numerous customers, stakeholders and the general public that First Bank remains solid, calm, steadfast and unflinching in its resolve to continue to provide first-class services to its teeming customers within and outside the country.
First Bank also wishes to respectfully thank our shareholders for the indicatively oversubscribed Rights Issue of its parent Company, First Holdco Plc (“FirstHoldco”), in the first round of its capital raise and looks forward to an equally successful final leg of the recapitalization exercise when it is announced by First Holdco.
