The Supreme Court has set aside the order of the Court of Appeal freezing the assets of Neconde Energy Limited, Nestoil Limited and two other entities over an alleged $1.1 billion indebtedness to FBNQuest Merchant Bank Limited and First Trustees Limited.
In a unanimous judgment delivered by a five-member panel on Monday, the apex court held that the Court of Appeal acted outside its powers when it granted far-reaching ex parte orders against the companies.
Justice Stephen Adah, who delivered the lead judgment, criticised the appellate court for assuming jurisdiction and issuing injunctive orders against Neconde and Nestoil when the matter was not properly before it.
The Supreme Court also faulted the Court of Appeal for issuing a stay of proceedings at the Federal High Court, Lagos, describing the development as a misuse of judicial process.
The dispute arose from debt recovery proceedings instituted by lenders, including FBNQuest Merchant Bank Limited and First Trustees Limited, against Nestoil and Neconde Energy over financing arrangements linked to oil assets and operations.
In October 2025, the Federal High Court in Lagos granted an ex parte Mareva injunction freezing the companies’ assets, bank accounts and shares across more than 20 financial institutions.
However, the companies challenged the order, arguing that it automatically lapsed after 14 days under the Federal High Court Civil Procedure Rules once a motion to discharge it was filed.
In November 2025, Justice Daniel Osiagor held that the ex parte order had expired by operation of law and was no longer subsisting.
But on November 29, Justice Yargata Nimpar of the Court of Appeal granted an interim restorative injunction returning control of Nestoil’s assets and operations to the receiver-manager appointed by the banks.
The Court of Appeal also set aside steps taken by Nestoil after the Federal High Court ruling and held that the Mareva injunction continued to operate.
However, the Supreme Court has now set aside the Court of Appeal’s decision, paving the way for the matter to continue before the trial court while Neconde and Nestoil remain in charge of their companies.
The apex court strongly criticised the grant of the restorative ex parte order by the Court of Appeal, describing the situation as a “judicial tragedy.”
It warned that the practice of granting far-reaching ex parte reliefs, which has become common in some trial courts, must not be allowed to extend into appellate proceedings.
The Supreme Court held that the relief granted by the Court of Appeal was, in substance, an interlocutory injunction, which ought not to have been granted ex parte.
It further held that the appellate court exercised jurisdiction over a matter that was not yet properly before it, reaffirming the settled principle that the mere filing of a notice of appeal does not automatically confer jurisdiction on an appellate court.
The apex court also found the ex parte order staying proceedings before the trial court to be fundamentally defective and accordingly set it aside.
The court found Neconde’s case meritorious and set aside all the impugned ex parte orders made by the Court of Appeal against Neconde and Nestoil, which had reportedly subsisted for 186 days.
The judgment reinforces settled principles governing appellate jurisdiction and serves as a major caution against the grant of substantive interlocutory relief through ex parte proceedings, especially at the appellate level.
The decision has been described as a significant intervention in the dispute, restoring control of the affected companies to their management and allowing the substantive matter to proceed at the Federal High Court.
The ruling also sends a strong message against the weaponisation of judicial processes in commercial disputes, particularly where far-reaching orders may disrupt legitimate business operations and investor confidence.
