Nestoil, Neconde challenge court orders, alleging judicial bias in $1.1bn debt dispute

Proceedings at the Federal High Court in Lagos were stalled on Friday after Nestoil Limited, Neconde Energy Limited, and their promoters filed petitions alleging bias and judicial misconduct against Justice D.I. Dipeolu.

The companies had requested in petitions submitted to the National Judicial Council (NJC) and the Federal High Court Chief Judge that ongoing cases, including FHC/L/CS/2127/2025, be reassigned to another judge pending review. The suit, filed by FBNQuest Merchant Bank Limited and First Trustees Limited, seeks the appointment of a receiver to take control of Nestoil’s assets over alleged debt defaults exceeding US$1 billion and N430 billion as of September 30.

The dispute escalated in October when armed police officers sealed Nestoil’s Lagos headquarters following a court order empowering a court-appointed receiver, Abubakar Sulu-Gambari, SAN, to take control of company assets. The ruling also authorised law enforcement agencies, including the Nigerian Navy, Police, and SSS, to assist in executing the order.

The plaintiffs had also sought a Mareva injunction freezing company accounts, restricting executives from accessing funds totaling approximately US$486 million and N390 billion, and authorising the receiver to manage Nestoil and Neconde offices in Victoria Island and Neconde’s stake in OML 42.

While Justice Dipeolu partially granted the motion, freezing assets and empowering the receiver, Nestoil and Neconde challenged the court’s actions, alleging excessive and unchecked judicial powers. The petitions argued the judge did not verify property ownership at Victoria Island, legally owned by Drawcok Estates, and that some lenders had dissociated themselves from the suit, appointing separate receivers.

The companies warned that the orders could disrupt Nigeria’s oil and gas operations, jeopardising production, salaries, and thousands of jobs. They cited prior ex parte injunctions by Justice Dipeolu, including a July case involving Neconde and Gobowen Exploration, which were later vacated for procedural breaches.

Nestoil chairman Ernest Azudialu-Obiejesi highlighted the operational and financial disruptions caused by earlier orders, including the sealing of a multi-tenant office building, which affected firms like Julius Berger Plc and Tecon Group.

The companies reiterated their economic contributions, supporting over 2,000 direct and 15,000 indirect jobs, alongside philanthropic initiatives in health, education, and infrastructure. Nestoil confirmed that operations remain uninterrupted despite the asset seizure, pledging full cooperation with authorities.

The court adjourned the case to 7 November for the substantive motion on notice hearing. When proceedings resumed, Justice Dipeolu noted the misconduct petition filed against him, necessitating the adjournment.

A lawyer familiar with the matter told PREMIUM TIMES that the petition may be part of a “plot to remove a firm and independent judge”, adding that Justice Dipeolu’s rulings sent a strong signal against chronic loan defaulters, drawing opposition from powerful interests.