Supreme Court voids orders for sale of GHL crude cargo

The Supreme Court on Friday nullified orders authorising the arrest and sale of crude cargo belonging to General Hydrocarbons Limited (GHL), ruling that the lower courts lacked the jurisdiction to entertain the dispute brought by FirstBank of Nigeria (FBN).

In a unanimous judgment, the apex court held that the case was a commercial dispute rather than a maritime matter, rendering the proceedings before the trial court and the subsequent orders of the Court of Appeal invalid.

Delivering the lead judgment prepared by Justice Emmanuel Agim, Justice Habeeb Abiru held that FirstBank’s claim centred on an alleged breach of an agreement requiring GHL to pay proceeds from crude oil sales from OML 120 into an account with the bank.

The court ruled that such a dispute does not qualify as a general maritime claim capable of invoking the admiralty jurisdiction of the Federal High Court for the arrest or sale of cargo.

According to the court, the bank’s allegation that GHL failed to remit crude oil sale proceeds into its account did not confer ownership rights over the cargo or the crude oil.

“The dispute is essentially a commercial matter arising from an alleged contractual obligation to deposit proceeds of crude oil sales. It is not a maritime claim relating to the loss or damage of goods carried by a vessel,” the court held.

The Supreme Court consequently set aside the September 11 judgment of the Court of Appeal, describing the orders directing the arrest and sale of the cargo as nullities because they were made without jurisdiction.

It also directed the Chief Registrar of the Court of Appeal and the Admiralty Marshal to immediately relinquish control of the seized cargo and return it to General Hydrocarbons Limited.

In addition, the apex court awarded costs of N5 million against FirstBank in favour of GHL.

The judgment marks the latest development in the legal dispute between the lender and the indigenous oil company over the financing and proceeds of crude oil production from OML 120.

Details later…