Supreme Court Restores Nestoil, Neconde’s Right to Counsel in $2bn Debt Dispute

The Supreme Court of Nigeria yesterday ruled in favor of Nestoil and Neconde Energy, overturning a previous appellate court decision that disqualified their legal counsel, which included Wole Olanipekun (SAN) and Muiz Banire (SAN).
The court upheld the companies’ right to appoint their own lawyers to challenge the ongoing receivership.
The apex court ruled 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 multi-billion-dollar debt recovery suit filed by FBNQuest Merchant Bank Limited and First Trustees Limited.
The lenders had 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.
In the lead judgment read by Justice Lawal Garba, the five-member apex court held that 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 affirmed that the boards of the companies retain the authority to act in defense 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 senior advocates 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.
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‎Allowing the receiver/manager’s counsel (appointed by the lenders) to represent the companies would create a serious conflict of interest and undermine fairness and independence in legal representation. The arrangement involving the lenders (FBNQuest and First Trustees) as appointors of the receiver was deemed fundamentally flawed.
‎The appointments of Wole Olanipekun (SAN) and Dr. Muiz Banire (SAN) (along with their teams) as counsel for Neconde and Nestoil are restored.

‎The companies are now free to proceed with their preferred lawyers in the ongoing debt recovery proceedings.
‎The ruling is procedural (focused solely on representation) and does not decide the merits of the underlying debt claims or receivership. Those substantive issues will now continue in the lower courts with the restored counsel.