Court Freezes Assets of Nduka Obaigbena’s General Hydrocarbons Limited Over $225.8 Million Debt -

Last Updated on 10 January 2025 by Naijadazz

In a significant legal development, a Federal High Court in Lagos has issued an ex-parte order freezing the assets and accounts of General Hydrocarbons Limited (GHL), a company linked to media mogul Nduka Obaigbena, across all commercial banks in Nigeria. The order, granted on December 30, 2024, by Justice D.I. Dipeolu, follows a lawsuit filed by First Bank of Nigeria Limited and FBNQUEST Trustees Limited, who claim GHL owes them $225,802,379.69 (US$225.8 million) in outstanding debt from loan facilities granted as of September 30, 2024.

The court order, signed by Registrar Orakwe Nonye Ossy, prohibits all commercial banks in Nigeria from releasing or dealing with any funds or assets belonging to GHL, its agents, subsidiaries, or sister companies. The freeze applies up to the amount claimed by the plaintiffs, effectively preventing GHL from dissipating its assets or transferring funds out of the country while the lawsuit is pending.

Key Details of the Court Order

The court order is part of a broader legal strategy by First Bank and FBNQUEST Trustees to recover the substantial debt owed by GHL. The order specifically targets:

All accounts and assets held by General Hydrocarbons Limited in Nigerian commercial banks.
The personal accounts of Nduka Obaigbena, Efe Damilola Obaigbena, and Olabisi Eka Obaigbena, who are listed as the 2nd to 4th defendants in the suit. Their accounts, linked to specific Bank Verification Numbers (BVNs), are also restricted. The BVNs mentioned in the court order are 22220558365 (2nd Defendant), 22363940584 (3rd Defendant), and 22363940584 (4th Defendant).

The court also directed the 8th to 13th defendants—including VITOL SA, Mercuria Energy Trading SA, and Trafigura PTE Limited—to file and serve a statement disclosing the quantity of products lifted from the 8th Defendant or OML 120 since production began.

Legal Measures Taken

The court granted a Mareva Injunction, a legal tool used to prevent defendants from disposing of assets during litigation. This injunction applies to all commercial banks in Nigeria, including Guaranty Trust Bank, Access Bank, Zenith Bank, and others. The order also includes an interim injunction restraining the defendants from transferring or dissipating any assets, including crude stock, insurance policies, shares, receivables, and contracts pledged as security for the loan facilities.

The Mareva Injunction specifically prohibits the following:

All commercial banks in Nigeria from releasing or dealing with any monies or assets due to the 1st Defendant (GHL) or its associated entities.
The 2nd to 4th Defendants (Nduka Obaigbena, Efe Damilola Obaigbena, and Olabisi Eka Obaigbena) from transferring or dissipating any interest in their assets, whether movable or immovable, pending the determination of the Motion on Notice for interlocutory injunction.

Broader Implications

This case highlights the growing use of Mareva Injunctions in Nigeria to secure claims in high-stakes financial disputes. While the Central Bank of Nigeria (CBN) has the authority under the Banks and Other Financial Institutions Act (BOFIA) to freeze accounts suspected of illegal transactions, this particular order was initiated by private entities rather than the CBN.

The case also underscores the challenges faced by financial institutions in recovering large debts from corporate entities, especially in cases where there is a risk of asset dissipation. The use of Mareva Injunctions in this context demonstrates the judiciary’s willingness to provide robust remedies to creditors in complex financial disputes.

Historical Context

This is not the first time General Hydrocarbons Limited has been embroiled in controversy. In 2015, court documents from a separate case revealed that the company received N670 million from the office of the former National Security Adviser, Sambo Dasuki, as part of the controversial arms deal scandal. The funds were allegedly paid for “energy consulting,” raising questions about the company’s financial dealings and its connections to high-profile individuals.

The 2015 revelation was part of a broader investigation into the misappropriation of funds meant for arms procurement to combat insurgency in Nigeria. The funds were allegedly diverted to politicians, businesspeople, and companies, including GHL. This historical context adds a layer of complexity to the current lawsuit, as it raises questions about the company’s financial practices and its relationship with powerful figures in Nigeria.

Defendants in the Suit

The lawsuit names multiple defendants, including:

General Hydrocarbons Limited (1st Defendant)
Nduka Obaigbena (2nd Defendant)
Efe Damilola Obaigbena (3rd Defendant)
Olabisi Eka Obaigbena (4th Defendant)
Subsidiaries and Sister Companies (5th to 16th Defendants), including GHL 121 Ltd, Aimonte Nigeria Limited, Calidin Global Resources Limited, CESL Oyo Production BBC Limited, CESL Oyo Production O & M Limited, VITOL SA, Mercuria Energy Trading SA, Trafigura PTE Limited, Glencore Energy UK Limited, Schlumberger Nigeria Limited, Schlumberger Overseas SA, and Baker Hughes Oilfield Services.

Specific Court Directives

The court order includes the following directives:

An order of Mareva Injunction restraining all commercial banks in Nigeria from releasing or dealing with any monies or assets due to the 1st Defendant (GHL) or its associated entities.
An interim injunction restraining the 1st to 4th Defendants from transferring or dissipating any interest in GHL’s assets, including but not limited to crude stock, insurance policies, shares, and receivables.
A directive for the 8th to 13th Defendants to disclose the quantum of products lifted from OML 120 since production began.

Next Steps

The court has scheduled a hearing for the Motion on Notice for Interlocutory Injunction, which will determine whether the freeze on assets and accounts will remain in place until the final resolution of the case. Legal experts suggest that this case could set a precedent for how Nigerian courts handle high-stakes debt recovery disputes in the future.

Why This Case Matters

This lawsuit is significant not only for its high financial stakes but also for its potential to set a precedent in how Nigerian courts handle debt recovery and asset protection in corporate disputes. It also raises questions about corporate governance and the enforcement of financial regulations in Nigeria.

The case highlights the challenges faced by financial institutions in managing high-risk loans and the legal tools available to them for debt recovery. It also underscores the importance of transparency and accountability in corporate financial practices, especially in cases involving large sums of money and high-profile individuals.

As the case unfolds, it will be closely watched by legal experts, financial institutions, and the public. The outcome could have far-reaching implications for corporate accountability and debt recovery processes in Nigeria. It may also influence how Nigerian courts approach similar cases in the future, particularly those involving high-value financial disputes and the use of Mareva Injunctions.

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