$2 Billion Debt Dispute: Court Disqualifies Nestoil’s Lawyers, Gives Reason

Nestoil Limited, Neconde Energy Limited, and their principal owners, Ernest Azudialu-Obiejesi and his wife, suffered a legal setback on Friday as the Court of Appeal disqualified their lawyers in an ongoing multibillion-dollar debt recovery case.

The appellate court barred Senior Advocates of Nigeria Wole Olanipekun and Muiz Banire, along with their legal teams, from representing Neconde and Nestoil. The court held that the companies’ board, led by Azudialu-Obiejesi, no longer had the authority to appoint counsel following the appointment of a Receiver/Manager over the firms.

The ruling also struck out all court filings submitted by the disqualified lawyers and ordered them to cease involvement in the case.

The dispute centers on debt obligations exceeding US$2 billion owed by Nestoil and its affiliates to a consortium of lenders, including FBNQuest Merchant Bank and First Trustees.

The decision follows a Supreme Court directive last week, which instructed all parties to return to the Court of Appeal to clarify the legitimacy of legal representation as a preliminary matter. The apex court emphasized that procedural tactics should not be used to delay repayment of legitimate debts.

With the Appeal Court ruling, the question of legal representation identified by the Supreme Court has been resolved, reinforcing the position of lenders in the debt recovery process. Observers say the judgment signals increased judicial scrutiny over attempts by distressed companies to frustrate receivership through procedural maneuvers.

Nestoil and Neconde are now expected to formalize their representation in accordance with the receivership framework as the case continues.