Law

Receivership Battle: Nestoil Sues Eight Nigerian Banks and Afreximbank to Halt Asset Takeover

Nestoil Limited, one of Nigeria’s leading oil and gas engineering and construction companies, has filed a lawsuit against eight Nigerian banks and the African Export-Import Bank (Afreximbank) at the Federal High Court in Abuja, seeking urgent judicial intervention to stop receivership proceedings initiated against it following an alleged loan default.

The case, which came up for mention before Justice Mohammed Umar on Wednesday, has attracted national attention due to the scale of the debt claims and the legal complexities surrounding the dispute. The respondents in the suit include major financial institutions such as Access Bank, FBNQuest Merchant Bank Limited, and Afreximbank, among others.

Nestoil Seeks Injunction to Stop Enforcement

In its motion on notice dated October 28, 2025, and filed by its lead counsel, Mofesomo Tayo-Oyetibo (SAN), Nestoil is asking the court to issue an interlocutory injunction to restrain the banks and their agents from enforcing a Notice of Default dated May 30, 2025, or taking any further steps to assume control of the company’s assets.

The oil firm wants the court to prevent the defendants — their officers, agents, receivers, liquidators, or any persons acting under their authority — from continuing with any legal, administrative, or receivership actions related to the alleged debt. Nestoil also seeks an order barring the defendants from publishing or reporting its alleged indebtedness to credit bureaus or the public, which it says would damage its reputation and business relationships.

Tayo-Oyetibo argued that the lenders’ actions were premature, unlawful, and constituted “wrongful demands and threats.” He further asserted that Nestoil had “substantially performed its obligations” under the Common Terms Agreement (CTA) of September 2022 and had already repaid hundreds of millions of dollars to the banks in line with the financing arrangement.

However, according to the company, despite these repayments, two letters dated May 13 and May 30, 2025, referred to as “the May Letters,” were issued by one of the respondents — the 10th defendant — alleging that Nestoil remained in default. The company insists that these claims were based on “opaque and inaccurate figures”, made worse by the banks’ alleged refusal to provide it with updated account statements.

Respondents Challenge Competence of the Suit

In a counter-motion filed by Babajide Okun (SAN) on behalf of the respondents, the banks asked the court to strike out Nestoil’s case on the grounds that it was incompetent and constituted an abuse of court process.

Okun maintained that the same parties and subject matter are already before the Federal High Court in Lagos, where a related receivership case is ongoing. He argued that Nestoil’s fresh suit in Abuja was an attempt to relitigate matters already before another competent court, thereby breaching legal principles against forum shopping.

Furthermore, Okun contended that since Nestoil is already under receivership, it lacks the locus standi (legal standing) to file any new suit without the approval of the appointed receiver/manager. He urged the court to dismiss the case, describing it as “an affront to judicial process.”

What Happened in Court

At Wednesday’s session, Tayo-Oyetibo appeared for Nestoil, while B.O. Ofulue represented the banks. The senior advocate requested that the court consolidate all pending applications and allow oral arguments on the legal points at issue.

In response, Ofulue informed the court that his clients were still within the legally allowed timeframe to respond to the filings and argued that Nestoil should have challenged the existing Lagos receivership order instead of initiating a fresh case in Abuja.

Justice Umar, however, cautioned the respondents’ counsel against delving into substantive matters prematurely, emphasizing that the present stage was limited to preliminary arguments.

Tayo-Oyetibo highlighted the urgency of the case, alleging that the appointed receiver had already locked up Nestoil’s corporate headquarters in Victoria Island, Lagos. Ofulue disputed this claim, insisting that it was Nestoil’s own directors who instructed staff not to resume work. After hearing both sides, Justice Umar adjourned the case to December 4, 2025, for the continuation of the hearing.

Background to the Dispute

The receivership battle traces back to an enforcement action carried out in October 2025 after the Federal High Court in Lagos, presided over by Justice D. I. Dipeolu, issued a Mareva injunction freezing Nestoil’s bank accounts and assets over an alleged debt of $1.01 billion and ₦430 billion owed to FBNQuest Merchant Bank Limited and First Trustees Limited, both subsidiaries of First Bank of Nigeria Limited.

The enforcement led to heavily armed police officers sealing Nestoil’s headquarters in Lagos, with court notices pasted on the premises indicating “Possession taken by court.” The order also directed over 20 financial institutions to disclose, under oath, any funds or investments linked to Nestoil and its affiliates, including Neconde Energy Limited and the company’s promoters, Ernest and Nnenna Azudialu-Obiejesi.

The Lagos court has since adjourned its own hearing to November 7, 2025, while the Abuja court will determine whether the receivership enforcement should be suspended pending a full trial on Nestoil’s new claims.

Outlook

The ongoing legal battle underscores the rising tension between Nigerian corporates and their lenders, as high interest rates, currency devaluation, and tightening credit conditions continue to pressure balance sheets. For Nestoil, the case represents a fight to protect its assets and reputation amid what it calls an “unjustified enforcement campaign.”

Observers say the court’s eventual decision could set a precedent for corporate debt enforcement and receivership procedures in Nigeria’s financial and energy sectors.

Mars Aviation Limited has announced that it is taking legal steps to challenge a temporary court order obtained by the Economic and Financial Crimes Commission (EFCC) that restricts access to its bank accounts. The company stated that it was not notified before the order was granted and emphasized that its business operations have always adhered to Nigerian laws and international standards.

No Prior Notice Before Court Action

In a statement issued in Abuja, Mars Aviation clarified that the EFCC’s ex parte order was obtained without prior notice to the company, denying it an opportunity to present its side of the case before the court.
“The application leading to the said order was made without notice to us,” the statement read. “We have therefore instructed our legal counsel to take all appropriate steps to challenge the order and ensure the facts are properly placed before the court.”

The company underscored that it respects the investigative powers of law enforcement agencies but expects that such powers be exercised fairly and in accordance with due process.

Company Maintains Clean Record

Mars Aviation reaffirmed that all its transactions, contracts, and payments are lawful, transparent, and properly documented. The company stated that it has operated in full compliance with Nigerian aviation regulations and international business standards.

“It is important to note that the allegations being circulated are unfounded and unsupported by credible evidence,” the company said. “At the appropriate time, we will present documentary proof demonstrating the legitimacy of our operations and the integrity of our management.”

Standing Firm on Corporate Ethics

Mars Aviation stressed its long-standing commitment to ethical business conduct, corporate governance, and accountability. The company, which operates as a registered Nigerian airline, highlighted its track record of professionalism, service delivery, and contributions to the nation’s aviation and economic sectors.

“As a law-abiding entity, we remain fully committed to transparency and compliance with all regulatory obligations,” the statement continued. “We trust that once the facts are presented before the court, Mars Aviation and its management will be vindicated.”

Appeal Against Speculation

The airline urged the public and media outlets to avoid speculation and to allow the judicial process to take its course. “The truth will be fully established through due process, and we are confident that justice will prevail,” it added.

Mars Aviation concluded by reaffirming its faith in Nigeria’s legal system and its confidence that the matter will be resolved fairly and transparently.

Signed:
Management of Mars Aviation Limited
Abuja, Nigeria — October 7, 2025

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