The Court of Appeal, Abuja Division, has overturned a ruling of the Federal High Court in Port Harcourt and upheld the appeal filed by First Bank of Nigeria against General Hydrocarbons Limited (GHL).

The appellate court also ordered the sale of crude oil aboard FPSO Tamaru Tokoni, with proceeds to be lodged in a high-yield escrow account under the custody of the Court of Appeal’s chief registrar. The funds are to remain secured pending the resolution of the dispute at either the trial court or arbitration.

Delivering the lead judgment, Justice Polycarp Kwahar directed the chief registrar to assume charge and possession of the oil cargo and ensure it is not dissipated or unlawfully disposed of by any party until the matter is conclusively determined.

The case originated earlier this year when Justice Emmanuel Obile of the Federal High Court, Port Harcourt, dismissed First Bank’s suit against GHL. The bank had accused the company of fraudulently diverting proceeds from the sale of crude oil cargo pledged as security for a facility.

Justice Obile upheld GHL’s preliminary objection, ruling that the matter was not a maritime claim but a debt recovery issue.

First Bank contends that GHL is indebted to it to the tune of $225.8 million, a claim GHL denies. The company further alleged that the bank had abused an ex parte freezing order by selectively releasing part of the crude on board the FPSO to Conoil and the Nigerian National Petroleum Company (NNPC).

Dissatisfied with the High Court ruling, First Bank appealed, leading to Thursday’s judgment in its favour.