$2bn debt battle: Supreme Court restores Nestoil, Neconde’s right to counsel

From Godwin Tsa, Abuja

The Supreme Court of Nigeria has resolved the legal representation tussle in the Receiver/ Manager litigation in favour of Nestoil and Neconde Energy, while overturning the Court of Appeal decision that disqualified their legal counsels, including Wole Olanipekun (SAN) and Muiz Banire (SAN).

‎In a unanimous decision on Friday, a five-member panel of the apex court upheld the companies’ right to appoint their own lawyers to challenge the ongoing receivership.

‎The Supreme Court specifically held that despite the receivership initiated by a consortium of banks, Nestoil and Neconde retain the right to appoint their own legal counsel to challenge that very receivership.

Nestoil Limited (an oil services firm) and its affiliate, Neconde Energy Limited (which holds interests in Oil Mining Lease 42) are embroiled in a multibillion-dollar debt recovery suit filed by lenders, primarily FBNQuest Merchant Bank Limited and First Trustees Limited.

In the disputed action, the lenders alleged that Nestoil, Neconde, and their promoters (Ernest Azudialu-Obiejesi and Nnenna Azudialu-Obiejesi) owe over $2 billion (plus N430 billion in related liabilities) under financing arrangements, including a Common Terms Agreement.

However, ‎in the lead judgment read by Justice Mohammed Baba Idris, the five-member apex court panel held it was a “legal anomaly” to allow lawyers appointed by the Receiver/Manager to also represent the companies, citing a conflict of interest.

‎The judgment affirms that the boards of the companies retain the authority to act in defence of the companies’ interests.

A receiver/manager was appointed over the companies’ assets and interests, leading to disputes over who controls the companies and who can represent them in court.

In  January 2026, the Supreme Court sent related appeals back to the Court of Appeal to resolve the preliminary issue of legal representation before proceeding on the merits.

On  January 23, 2026, the Court of Appeal disqualified Wole Olanipekun (SAN) (for Neconde) and Muiz Banire (SAN) (for Nestoil), ruling that the Ernest Azudialu-Obiejesi-led boards lacked authority to appoint counsel once the receiver/manager was in place. It allowed counsel appointed by the receiver to represent the companies instead.

Nestoil/Neconde and their promoters appealed this disqualification to the Supreme Court (one key appeal being SC/CV/48B/2026 by Neconde). The apex court had reserved judgment after hearing arguments from a five-member panel.

In Friday’s ruling, the Supreme Court upheld the appeal by Nestoil and Neconde (and their promoters). It set aside the Court of Appeal’s judgment disqualifying the companies’ chosen counsel.

‎Their boards (led by Ernest Azudialu-Obiejesi) retain the authority to appoint counsel of their choice to defend their interests, particularly since the validity of the receivership itself is being challenged.