Court Overturns Asset‑Freezing Order Against Nestoil and Neconde Owners

• Says Appeal Court “exparte order was unwarranted, uncalled for, frivolous and vexatious.”

The Supreme Court has set aside an order of the Court of Appeal that froze the assets of Neconde Energy Limited, Nestoil Limited and two other companies, following an alleged $1.1 billion debt to a consortium of banks led by FBNQuest Merchant Bank Limited and First Trustees Limited.

A five‑member panel of the apex court, in a judgment delivered yesterday, held that the three‑member appellate panel exceeded its authority when it granted an ex‑parte application against the appellants.

On 29 November 2025 the Court of Appeal had granted an interim restorative injunction that returned control of Nestoil’s assets and operations to the Receiver Manager appointed by the banks.

The appellate court also issued an order freezing the assets of the oil‑servicing firms pending the hearing of the substantive suit, and a further stay of proceedings at the trial court.

The order followed an ex‑parte application by the bankers seeking a takeover of the oil firms over the alleged debt.

Dissatisfied, Neconde, Nestoil and their promoters – Dr Ernest Azudialu‑Obiejesi OFR and Mrs Nnenna Azudialu‑Obiejesi – had approached the apex court last year to reverse the appellate court’s order against their assets.

Delivering judgment in the appeal, the five‑member panel agreed with the submissions of Neconde and Nestoil that the lower court erred in law in “entertaining the matter in the manner it did” and in issuing an ex‑parte order without justification.

According to Justice Stephen Adah, who delivered the lead judgment, records before the Supreme Court showed that the process of transmitting an appeal had not yet been completed at the time the appellate court assumed jurisdiction.

While emphasizing that a Notice of Appeal does not amount to a stay of proceedings, the apex court questioned how the lower court could entertain an ex‑parte application in a matter it was not seized of.

“If there was a Notice of Appeal what necessitated its withdrawal for an ex‑parte?” the apex court asked, before warning that courts must be vigilant, circumspect and discreet in issuing ex‑parte orders.

In addition, the apex court faulted the lower court, stating that “no exception, cause existed nor urgency disclosed that would have warranted the withdrawal of the Notice of Appeal,” adding that the ex‑parte order was unwarranted, uncalled for, frivolous and vexatious.

Noting that abuse of ex‑parte has become a great concern to the judiciary, Justice Adah urged the appellate court not to engage in conduct that undermines the judiciary.

According to him, the appellate court proceeded to make a far‑reaching order into the substantive matter while sitting in an interlocutory appeal.

“It was granted at a time when the appeal had not been entered…an appellate court can only be seized of a matter when the appeal has been fully entered,” the Supreme Court held, pointing out that the substantive matter was still proceeding at the trial court.

He also warned litigants who use appeals to frustrate court proceedings and pursue endless litigation, questioning how the bankers who had dragged the oil firms to court could turn around at the appellate court to seek a stay of proceedings at the trial court.

On the first issue, the Supreme Court held, inter alia, that there was no basis or exceptional circumstance warranting the grant of the ex‑parte order. The Court further held that it was wrong for the Court of Appeal to entertain and grant the application when the records of appeal had neither been transmitted nor the appeal entered, as the trial court remained seized of jurisdiction.

“The first issue is resolved in favour of the appellants,” Justice Adah held.

On the second issue, the Supreme Court held, inter alia, that the application for stay of proceedings brought by the first and second respondents was not made in good faith. The Court observed that the order effectively paralysed proceedings before the trial court and that there was no basis upon which the stay could be sustained.

The apex court found no “compelling justification for the order,” adding that the order only “constitutes misuse of court processes.”

“This appeal is meritorious and it is accordingly allowed…the ex‑parte order issued by the Court of Appeal on 29 November 2025 is accordingly set aside,” Adah declared.

Recall that Justice Dehinde Dipeolu of the Federal High Court in Lagos had on 22 October 2025 granted an ex‑parte order against Nestoil, Neconde Energy Limited, and the company’s principal promoters – Dr Ernest Azudialu‑Obiejesi and Mrs Nnenna Obiejesi.

The court also barred the defendants from accessing funds, shares, or assets held in banks and financial institutions.

In addition, Justice Dipeolu authorised First Trustees Limited and FBNQuest Merchant Bank Limited, representing a consortium of creditor banks, to take possession of Nestoil’s assets under receivership.

However, the case was subsequently transferred to Justice Daniel Osiagor, who on 21 November vacated the Mareva injunction on the grounds that the 14‑day order had lapsed.

Dissatisfied, the bankers approached the appellate court to set aside the lifting of the Mareva injunction.

Delivering a ruling on 29 November 2025, the Appeal Court ruled in favour of FBNQuest Merchant Bank Limited and First Trustees Limited, and issued a restorative injunction reversing Justice Osiagor’s decision.

It should be noted that the Supreme Court a few months ago had also overturned the appellate court’s decision on legal representation and restored the oil companies’ right to legal counsel of their choice while challenging the validity of the receivership itself.

In the lead judgment delivered by Justice Mohammed Baba Idris, the apex court described as a “legal anomaly” the appointment of lawyers by the receiver‑manager to simultaneously represent the companies whose interests were being contested.

The apex court held that permitting such representation created a clear conflict of interest and undermined the companies’ right to independent legal representation.

Nestoil’s victory is more than a legal triumph. It is a reaffirmation of justice and restoration of order.