There was no relief on Friday for oil services firm Nestoil Limited, Neconde Energy Limited and their principal owners Ernest Azudialu-Obiejesi and his wife, as the Court of Appeal disqualified their lawyers in the ongoing multibillion-dollar debt recovery dispute involving a consortium of banks.
In a ruling, the Court of Appeal barred Wole Olanipekun (SAN), and Muiz Banire (SAN), alongside other lawyers appearing with them, from further representing Neconde Energy Limited and Nestoil Limited respectively.
The appellate court held that the Ernest Azudialu-Obiejesi-led board of directors lacked the legal authority to appoint counsel, having been divested of such powers following the appointment of a Receiver/Manager over the companies.
Accordingly, the court granted the applications seeking the disqualification of Messrs Olanipekun Banire, struck out all processes filed by their respective law firms, and ordered that they cease acting for the companies in the matter.
The ruling comes against the backdrop of mounting debt obligations estimated at over US$2 billion, owed by Nestoil and its affiliates to a consortium of lenders.
The Court of Appeal decision followed closely on the heels of a ruling by the Supreme Court, which last week ordered all parties in the dispute to return to the Court of Appeal to resolve the question of legal representation as a preliminary issue.
In that ruling, delivered by a five-member panel led by Justice Inyang Okoro, the apex court directed the Court of Appeal to determine the competence and authority of counsel appearing for the companies and to report back on January 26, 2026.
The Supreme Court also warned against what it described as frivolous appeals and technical manoeuvres in debt recovery matters, stressing that courts should not be used to delay repayment of legitimate debts.
The Court of Appeal’s decision on Friday effectively resolves the representation dispute identified by the Supreme Court and further strengthens the position of the lenders, represented by FBNQuest Merchant Bank Limited and First Trustees, in the ongoing enforcement proceedings.
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A bank official said the ruling underscores the growing judicial intolerance for attempts by distressed companies to frustrate receivership and debt recovery processes through procedural tactics, particularly in high-value commercial disputes.
With the disqualification of their former counsel and the striking out of existing court processes, Nestoil and Neconde are now expected to regularise their representation in line with the receivership framework as the matter continues.
