The High Court of the Federal Capital Territory, Abuja, has nullified ongoing arbitration proceedings at the International Chamber of Commerce, London, initiated against indigenous oil firm, Aiteo Eastern Exploration and Production Company Limited, by a group of lenders that partially financed its acquisition of Oil Mining Lease 29.

In a ruling delivered on Tuesday, Justice S.B. Belgore held that the ICC arbitration commenced in defiance of existing injunctive orders issued by the Nigerian court constituted a “brazen affront” to the nation’s judicial authority and was therefore void.

“The arbitration proceedings in London, undertaken in clear disregard of binding interim injunctions, amount to a violation of this court’s authority. It is a breach that cannot be condoned,” Belgore said.

The dispute stems from Aiteo’s $3.01 billion acquisition of OML 29 and the Nembe Creek Trunk Line from Shell in 2014. Benedict Peters, Aiteo’s founder, is reported to have contributed nearly $1 billion in equity to facilitate the transaction and revive crude oil production.

Tempo Energy Nigeria Ltd., a minority equity partner in the transaction, claimed it was sidelined in legal and arbitral proceedings despite having a material stake. The company also alleged that the consortium of lenders, including Shell Western Supply & Trading, Shell International Trading & Shipping, the African Finance Corporation, and several Nigerian banks, breached obligations under the financing agreements.

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Tempo filed suit FCT/HC/CV/079/2021 on January 14, 2021, seeking to restrain Aiteo and the lending syndicate from proceeding with the UK High Court action and ICC arbitration without its inclusion.

In response, the FCT High Court granted interim injunctions on January 22, 2021, barring the parties from taking further steps in the foreign proceedings pending the determination of the substantive matter.

However, the ICC arbitration reportedly continued between 2021 and 2024, in direct contravention of the court’s orders.

On April 25, 2025, the Court of Appeal in Abuja upheld the injunctions, describing the appeal lodged by the defendants as an abuse of court process.

The appellate court imposed costs of N1.5 million and ordered an expedited hearing of the outstanding applications before the FCT High Court.

At the resumed hearing from May 20 to 22, 2025, Tempo’s lead counsel, Kehinde Ogunwumiju (SAN), urged the court to nullify the ICC arbitration in its entirety.

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“The continued prosecution of the arbitration proceedings in London, in spite of subsisting Nigerian court orders, undermines the rule of law and judicial independence. It is not only contemptuous but unlawful,” Ogunwumiju told the court.

Lawyers representing the defendants, including Mrs. Joke Aliyu and Mr. Babatunde Fagbohunlu (SAN), argued that the Nigerian court lacked jurisdiction to interfere with foreign arbitral proceedings.

They further contended that arbitration was the preferred forum under the terms of the financing agreement.

However, Justice Belgore dismissed the preliminary objection as “incompetent and an abuse of the court process.”

“This court is not without power to restrain parties from proceeding with foreign arbitration where such steps offend the administration of justice in Nigeria,” the judge ruled.

The court accordingly granted Tempo Energy’s application, declared the ICC arbitration proceedings null and void, and reaffirmed that the interim injunctions issued in 2021 remained valid and binding on all parties.

Belgore directed full compliance with the court’s earlier orders and awarded N500,000 in costs to Tempo Energy.

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The matter was adjourned to September 29, 2025, for hearing of the consolidated interlocutory applications.

The arbitration is part of a broader legal tussle arising from Aiteo’s acquisition of OML 29.

In a separate case before the Federal High Court in Abuja (Suit No. FHC/ABJ/CS/738/2021), Aiteo is suing Shell for $2.5 billion, alleging fraud and misrepresentation in the sale of the oil block.

“The asset was significantly degraded at the time of sale. Shell failed to disclose the true condition of OML 29, including chronic operational and security challenges that continue to affect production.”

Aiteo claims the poor state of the asset, coupled with rampant crude oil theft, has severely impaired its ability to meet debt repayment obligations.

According to an internal bank document seen by our correspondent, the lenders committed approximately $2 billion to the transaction: Zenith Bank $323 million; First Bank and GTBank $200 million each; Fidelity Bank $175 million; AFC $125 million; Ecobank Nigeria and Union Bank $100 million each; Sterling Bank $60 million; and Shell Western $512 million.

Benedict Peters’ equity contribution reportedly amounted to $898 million in cash, with an additional $257 million provided at closing to cover transaction costs and restart operations. Tempo Energy, one of the smaller equity partners, contributed $136 million.

In a bid to attract retail investors and deepen domestic participation in government securities, the Debt Management Office (DMO) has announced the July 2025 issuance of the Federal Government of Nigeria (FGN) Savings Bond. The offering includes a 2-Year bond maturing on July 16, 2027, with an attractive annual interest rate of 15.762 percent, and a 3-Year bond maturing on July 16, 2028, with a higher yield of 16.762 percent per annum.

The FGN Savings Bond is specifically tailored for retail investors, offering an accessible and low-risk opportunity to earn fixed returns while supporting national development. The offer window is expected to remain open for a week, giving Nigerians across various income brackets the chance to participate.

Simultaneously, the Central Bank of Nigeria (CBN) is set to hold its first Treasury Bills (T-bills) Primary Market Auction (PMA) for the month today, July 9, 2025. The CBN aims to raise a total of N250 billion across the three standard maturities: N100 billion in 91-day bills, N20 billion in 182-day bills, and N130 billion in 364-day bills.

READ ALSO:DMO To Auction N350bn FGN Bonds At N1,000/Unit

T-bills remained a preferred short-term investment vehicle for institutional investors, banks, and corporates, offering liquidity and risk-free returns. This auction comes at a time when interest rates remain elevated, reflecting ongoing monetary tightening to curb inflation and stabilize the naira.

Together, the DMO and CBN offerings highlight the government’s strategy to manage public debt sustainably while providing diverse options for investors. Market analysts anticipate robust demand, especially for the longer-tenor instruments, as investors seek to lock in high yields amid economic uncertainties.

…Awards N50m damages in favour of NICON Investment Ltd

…Union Bank heads to Appeal Court

A High Court of Lagos State has slammed £1 million in damages against Union Bank Plc for negligence and breach of its fiduciary duties to NICON Investment Limited.

Delivering judgment on Wednesday in a suit marked LD/1074/2010 filed by NICON Investment Limited against Union Bank, Justice O. Abike Fadipe held that NICON Investment Limited (Claimant) is a duly registered and incorporated limited liability company operating a fixed deposit account with the Union Bank (Defendant) payable with interest on demand.

The court held in the judgment that the sum of £130,720,557.06 stands to the credit of NICON Investment Limited in its fixed deposit account domiciled with the Union Bank as of April 30, 2010.

Justice Abike-Fadipe further held in the judgment that the unilateral conversion of the claimant’s £130,720,557.06 to US dollars without the due authorization or mandate of the claimant is wrongful, null and void.

According to the judge, “The defendant bank’s unilateral act of converting the fixed deposit of the claimant from British Pounds Sterling to US Dollars and Dollars to Naira is unauthorized and is null and void.”

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The Judge agreed that the Pounds Sterling fixed deposit account of the Claimant is not tied to the indebtedness of Global Fleet Oil and Gas Limited or meant in any way or manner whatsoever to provide security for the said debt.

The court held that the bank’s unilateral use of part of the claimant’s £130,720,557.06 to liquidate Global Fleet Limited’s debt without the mandate of the Claimant is wrong, null and void.

Consequently, the court awarded the sum of N50 million to the Claimant against the defendant as damages for unlawful deduction and illegal penalties and charges made on the account of the Claimant by the bank.

It directed the bank to avail the claimant with its statement of account of the fixed deposit account as well as reconciliation of same from inception till date and that the bank should also render an account of all transactions on the claimant’s Pounds Sterling fixed deposit account together with all accrued interest thereon.

The court went ahead and made an order setting aside all acts of the bank pertaining to or connected with and affecting the claimant’s Pounds Sterling fixed deposit account, vis-à-vis its conversion to US Dollars, Naira and unilateral liquidation of the indebtedness of Global Fleet Limited and NICON Investment Limited from the said account.

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Justice Abike-Fadipe dismissed the defendant’s counterclaim in its entirety with a cost awarded to the claimant and the third defendant to the counterclaim severally in the sum of N10 million, respectively.

NICON Investment Limited had, in its case, asserted that it maintained a banker /customer relationship with the defendant, who operated a British Pound Sterling fixed deposit account with the Bank. The court also ordered an interest of 5 percent per annum from May 2010 that was used to fully liquidate the second defendant to the first counterclaimant’s debt (Global Fleet Oil and Gas Limited).

Meanwhile, Union Bank of Nigeria Plc has announced that it has instructed its legal team to immediately appeal a recent court ruling that could result in a liability exceeding N400 billion plus accrued interest.

The case involves NICON Investment Limited, Global Fleet, and business mogul, Senator Jimoh Ibrahim.

In a statement released on Wednesday, the bank acknowledged the judgment of Justice Abike Fadipe of the Ikeja High Court, which found the bank liable in a matter concerning the disputed deposit agreement.

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The statement, signed by Mrs Olufunmilola Aluko, Chief Brand and Marketing Officer of Union Bank, emphasised the institution’s commitment to professionalism, ethical conduct, and legal compliance.

“While we respect the authority of the court, we strongly disagree with the judgment delivered and have instructed our lawyers to file an appeal against it immediately,” the bank stated.

The bank expressed concerns over several aspects of the judgment, including the court’s findings on consolidation of indebtedness, locus standi, and third-party liability, which it says run at a conflict with established legal principles and its understanding of the facts.

“We are confident in our legal position and intend to vigorously pursue all lawful avenues to ensure justice is served. Union Bank had previously transferred the relevant debt obligations to the Asset Management Corporation of Nigeria (AMCON), and we maintain that all actions taken in this regard were in line with applicable laws and sound banking practice.”

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The bank also reaffirmed its commitment to safeguarding stakeholder interests and upholding the integrity it has built over its more than 100-year history.

The case took a dramatic turn when the Federal High Court in Lagos ordered Union Bank to refund £137 million (approximately N400 billion) to NICON Investment Limited, along with 5 percent annual interest accrued over 14 years.

The judgment was seen as a significant legal victory for Senator Ibrahim, who currently represents the Ondo South Senatorial District.

The court ruled that Union Bank had failed to honour the terms of the long-standing deposit agreement, leading to the monumental judgment.