The attempt by FirstBank and its affiliates to secure the reassignment of the ongoing Nestoil/Neconde litigation has suffered a major setback, with the application reportedly rejected by the Honourable Chief Judge, leaving the lenders exposed to a looming $1.8 billion damages claim.
The reassignment request, which sought to remove the trial judge handling the dispute between FBNQuest Merchant Bank, First Trustees and the Nestoil Group, collapsed under the weight of the Supreme Court’s judgment in Neconde Energy Ltd. v. FBNQuest Merchant Bank Ltd & Ors.
In rejecting the application, the Chief Judge reportedly found no legal basis for the reassignment, noting that the Supreme Court neither criticized the trial judge nor directed that the matter be transferred. Instead, the Apex court condemned the attempts by Firstbank and ors to deliberately stall court proceedings, describing such conduct as suggestive of ulterior motives and an abuse of judicial process.
With the reassignment effort now firmly defeated, attention has shifted to the potentially devastating financial consequences facing the lenders.
Nestoil and Neconde are about to hit a $1.8 billion damages action against FBNQuest Merchant Bank, First Trustees, FirstBank, Access Bank, Zenith Bank, UBA, the Receiver-Manager, and other parties for what they describe as unlawful actions that severely disrupted oil production operations.
The companies allege that the actions of the banks and their Receiver caused crude oil production to decline from approximately 60,000 barrels per day to less than 40,000 barrels per day, while also disrupting planned drilling operations involving the Pathfinder 500 drilling rig.
According to the companies, the production losses, delayed development activities and resulting commercial damage have translated into losses estimated at more than $1.8 billion, which they intend to recover through the courts.
The dispute has further intensified with Drawcok Estate Limited filing a separate N100 billion lawsuit against FBNQuest Merchant Bank, First Trustees, the Receiver and others over the alleged wrongful takeover of prime commercial properties in Victoria Island, Lagos.
What began as a debt recovery dispute is now evolving into a multi-billion-dollar legal battle, with the failed reassignment bid potentially marking a turning point in a case that could expose the lenders to substantial financial and reputational liability.
