FirstBank Suffers Court Setback as Reassignment Bid Fails, $1.8bn Damages Suit Gains Momentum

LAGOS — The ongoing legal battle involving FirstBank, FBNQuest Merchant Bank, Nestoil Limited and Neconde Energy Limited has taken a significant turn after the Chief Judge of the Federal High Court dismissed an application seeking the reassignment of the case from the current trial judge.

The application, filed on behalf of FirstBank, sought the transfer of the matter involving FBNQuest Merchant Bank and Nestoil to another judge. However, the Chief Judge ruled that the request lacked both factual and legal justification.

In the ruling, the court noted that the Supreme Court had previously examined issues surrounding the conduct of the trial judge, Justice Osiagor, and found no wrongdoing. The apex court had also directed that the matter should proceed without delay, emphasizing the need for an expeditious hearing.

The decision is being viewed as a major setback for FirstBank and could accelerate proceedings in the high-stakes dispute that has attracted widespread attention within Nigeria’s banking, energy and legal sectors.

Meanwhile, Nestoil Limited and Neconde Energy Limited are intensifying efforts to pursue their $1.8 billion damages claim against a consortium of financial institutions, including FirstBank, Access Bank, Zenith Bank, Ecobank, UBA, Union Bank and other parties connected to the dispute.

According to court filings, the companies contend that actions allegedly taken by a Receiver-Manager appointed over certain assets and operations had severe consequences for oil production activities at Oil Mining Lease (OML) 42.

The plaintiffs claim that the Receiver-Manager’s intervention disrupted critical operational processes, leading to a sharp decline in crude oil output. They allege that production dropped from approximately 60,000 barrels per day to less than 40,000 barrels per day, resulting in substantial financial losses and operational setbacks.

The companies further argue that the disruptions adversely affected production efficiency, contractual obligations and revenue generation, forming the basis of their multi-billion-dollar claim.

As of the time of filing this report, investigations indicate that the defendant banks had yet to file formal defences to the claims brought against them in court.

The development has heightened interest in what is increasingly being regarded as one of Nigeria’s most significant corporate and banking disputes in recent years. Legal analysts say the dismissal of the reassignment application strengthens the plaintiffs’ position procedurally and clears the way for substantive issues in the case to be heard.

Observers also note that the outcome of the litigation could have far-reaching implications for creditor rights, receivership practices, banking operations and investor confidence in Nigeria’s oil and gas sector.

With the court now expected to move forward with the substantive hearing, attention will focus on the parties’ arguments and the potential financial consequences should the plaintiffs succeed in their $1.8 billion claim.