Nigeria's Supreme Court has overturned a Court of Appeal judgment that had ordered the seizure of an oil vessel and its cargo belonging to General Hydrocarbons Limited, in a long running dispute with First Bank of Nigeria over an alleged breach of contract, according to a report on Channels Television. The apex court's intervention effectively brings to an end a protracted legal battle over the control of the crude oil at the centre of the case.
In a unanimous decision, a five member panel of the apex court ordered that the crude oil aboard the vessel, the floating production, storage and offloading unit known as the FPSO Tamara Tokoni, be handed over to General Hydrocarbons Limited. The justices described the earlier seizure of the cargo as legally unfounded, setting aside the orders that had allowed it to be held against the company.
Central to the ruling was the question of jurisdiction. The Supreme Court held that the Federal High Court lacked the jurisdiction to entertain the matter as a maritime or admiralty dispute, noting that the case was purely contractual and financial in nature. On that basis, the apex court dismissed the claim that had been brought before the lower courts and struck down the reliefs that had flowed from it.
The court further held that First Bank of Nigeria had no legal basis to seize the vessel or to dispose of its cargo in order to recover an alleged debt. In the reasoning conveyed by the panel, the remedies the bank had sought did not fit the nature of the relationship between the two parties, which the justices characterised as a commercial and contractual one rather than a maritime claim capable of grounding the arrest of a ship and its load.
The dispute had arisen from the financial dealings between General Hydrocarbons and First Bank, in which the crude oil linked to the FPSO Tamara Tokoni became the subject of competing claims tied to loan facilities. As the matter moved through the courts, the cargo had been placed under seizure, leaving its ownership and control contested until the apex court delivered its final word on the issue.
The panel that decided the case comprised the justices Uwani Musa Abba Aji, Adamu Jauro, Emmanuel Agim, Tijjani Abubakar and Habeeb Adewale Abiru. Their unanimous conclusion means that the orders of the lower courts, including the Court of Appeal judgment that had sanctioned the seizure, no longer stand, and that the crude oil is to be released to General Hydrocarbons.
The judgment is being viewed as a significant decision on the boundaries between contractual disputes and admiralty jurisdiction in Nigeria, and on how far a lender can go in seizing assets to recover a claimed debt. With the Supreme Court having settled the jurisdictional question and directed that the cargo be returned, attention is likely to turn to how the two parties resolve the underlying financial issues that gave rise to the case in the first place.