The Court of Appeal has overturned a Federal High Court ruling in favor of First Bank of Nigeria Limited (FirstBank) against General Hydrocarbons Limited (GHL), authorizing the sale of pledged crude oil cargo and its proceeds to be held in escrow pending further proceedings.

In a judgment delivered on September 11 during a special vacation session requested by GHL, the appellate court set aside the earlier decision by Justice Obile at the Federal High Court in Port Harcourt, which had dismissed FirstBank's claims of fraudulent diversion of sale proceeds from crude oil aboard the FPSO Tamara Tokoni. The oil served as collateral for substantial loan facilities extended to GHL, but the company allegedly violated the pledge terms by diverting the funds, leading FirstBank to pursue legal action.

FirstBank, represented by Babajide Koku SAN and Victor Ogude SAN, appealed the trial court's characterization of the case as a simple debt recovery. The Court of Appeal affirmed the maritime aspects of the claim, stressing the need to preserve the "Res"—the crude oil cargo—as the core disputed asset. It reinstated an arrest order on the cargo, previously vacated by the lower court, and directed its sale, with proceeds deposited into an interest-yielding escrow account managed by the Chief Registrar of the Court of Appeal.

The registrar was also tasked with taking possession to prevent dissipation or unauthorized disposal by any party. The matter will return to the trial court and arbitration for resolution. This outcome represents a key development in the ongoing dispute, highlighting enforcement of collateral in high-stakes energy sector transactions.

FirstBank described the ruling as a milestone reinforcing its focus on corporate governance, legal compliance, and asset protection. GHL, linked to media mogul Nduka Obaigbena, has not publicly commented on the decision, which sets a precedent for accountability in commercial pledges.