BREAKING: GHL Directors Seek $1bn Each in Damages from First Bank for Defamation

Following Wednesday’s landmark victory for General Hydrocarbons Limited (GHL) at the Federal High Court in Lagos, which set aside an order of Mareva injunction freezing it’s assets in a suit with First Bank Holdings Plc, directors of the oil and gas company are seeking compensation.

GHL directors who were negatively affected by the ex parte freezing order have begun proceedings worldwide against First Bank, seeking $1 billion each in damages for defamation and wrongful freezing of their accounts.

The lawsuit is in connection with a disputed $225.8 million.

The court ruling in favour of GHL, set aside the injunction after upholding arguments from the company’s counsel, Abiodun Layonu, a Senior Advocate of Nigeria (SAN), and Olumide Aju, SAN, who represented the 2nd to 5th defendants. The judges determined that the Mareva order had violated an existing ruling from a court of concurrent jurisdiction.

Layonu argued that the injunction amounted to an abuse of the court process, alleging that First Bank had misled the court by failing to disclose a previous order by Justice Lewis-Allagoa, which had restrained the bank from taking further action. He claimed that the asset freeze had caused severe financial harm to GHL and its directors.

The dispute stems from a loan arrangement between First Bank of Nigeria Limited, a subsidiary of First Bank Holdings, and GHL, along with related entities such as GHL 121 Ltd, Aimonte Nigeria Limited, and Schlumberger Nigeria Limited.

On December 12, 2024, a court order barred First Bank from enforcing loan recovery measures until arbitration proceedings concluded.

Despite this, First Bank sought an ex-parte order against GHL and 15 other entities, leading to the asset freeze. GHL and its co-defendants challenged the injunction, arguing it was obtained through fraudulent misrepresentation and the concealment of material facts.

They argued that had all the facts been presented before the trial judge, the order against them would not have been granted.

The trial judge upheld GHL’s arguments and consequently set aside the freezing order.

In his ruling, Justice Dehinde Dipeolu, stated that when compared with an earlier order issued by Justice Ambrose Lewis-Allagoa in Suit No. 1953, the Mareva Injunction should be set aside.

The court found that First Bank of Nigeria and FBNQUEST Limited, at whose instance the order was procured, failed to fully disclose Justice Lewis-Allagoa’s order, which made the Mareva Injunction incompatible with the earlier ruling.

The court consequently agreed with GHL and the 2nd to 5th defendants that First Bank deliberately “suppressed facts” to mislead the court into granting the order against GHL.

The court in the circumstance, said it had no choice but to set aside the order freezing GHL accounts as well as the accounts of all the other defendants in the case.

Justice Dipeolu stated, “I have carefully read through all that is contained in the Originating Summons in Suit No:FHC/L/CS/1953/24 and the Interim Orders of Hon. Justice Allagoa J. dated the 12th of December, 2024. It appears to me that the Interim Orders made by Hon. Justice Allagoa J. revolves around the arbitration proceedings between the 1st Defendant and the 1st Plaintiff in this case, which arbitration proceedings is pursuant to Clause 12 (c) of the Agreement between the 1st Defendant and the 1st Plaintiff dated the 29th of May, 2021. This position is reflected in all the Interim Orders granted on 12th of December, 2024.

“Although, the Interim Orders made by this Court on the 30th of December, 2024 are in relation to the subsequent facilities agreement between the 1st Plaintiff and the 1st Defendant and it does not extend to the receivables in the agreement of 29 of May, 2021, also, the present suit on the face of it if placed side by side with FHC/L/CS/1953/2024 is not an abuse of process for the reasons given above, however, in view of the Orders of Allagoa J. made on the 12th of December, 2024, the Mareva order granted by this Court on 30th December, is hereby set aside.

“Based on all my findings above, I hold that the 1st Defendant/Applicant Motion on Notice dated January 13, 2025 succeeds, the Mareva Order of 30th December, 2024 is hereby set aside.

Therefore, the 2nd to 5th Defendants/Applicants’ alternative relief succeeds to the extent that the Mareva Order of 30th December, 2024 is set aside against 2nd – 5th Defendants.”

Justice Dipeolu adjourned the case till February 19, 2025, for further proceedings.

Unfortunately, attempts are already being made on social media to falsify the ruling and mislead the public by bringing documents about orders that have now been vacated by the court. The court clearly and unambiguously vacated the entire Mareva contrary to what is being circulated out there by the bank. The court did not vacate the Mareva order piecemeal but the entire injunctive orders obtained by the bank.

Meanwhile, GHL directors who were also negatively affected by the ex parte freezing order have begun proceedings worldwide against First Bank, seeking $1 billion each in damages for defamation and wrongful freezing of their accounts.

GHL is also bringing a case in the Legal Practitioners Privileges Committee against First Bank lawyers, Babajide Koku, SAN and Victor Ogude SAN for unprofessional conduct.

Faridah Abdulkadiri

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