S’Court Nullifies Appeal Court Ruling, Restores Olanipekun, Banire in $2bn Nestoil, Neconde Debt Battle

The Supreme Court has overturned the decision of the Court of Appeal which disqualified Wole Olanipekun and Muiz Banire from representing Nestoil Limited and Neconde Energy Limited in a $2 billion debt dispute.

In a unanimous judgment delivered by Mohammed Idris, the apex court held that a receiver whose appointment is being challenged lacks the authority to appoint legal counsel for a company in the same proceedings.

The ruling effectively restores Olanipekun’s role as counsel to Neconde Energy Limited and Banire’s representation of Nestoil Limited in the high-stakes dispute involving a consortium of lenders led by FBNQuest Merchant Bank Limited and FBN Trustees Limited.

At the heart of the case was whether a receiver appointed by lenders could unilaterally determine a company’s legal representation, even when the legitimacy of that appointment is under judicial scrutiny. The Supreme Court answered in the negative, warning that such a situation would create a clear conflict of interest.

Justice Idris stressed that allowing a receiver—appointed by parties whose actions are being challenged—to control the company’s defence would undermine the integrity of the judicial process. He noted that the issues before the trial court, including the validity of the receivership and enforcement of security, strike at the very foundation of the dispute.

The court further held that these issues go beyond the routine administrative powers of a receiver, emphasizing that the authority of such a receiver derives from the same transaction under contention.

“The defence of the action through its directors and the counsel retained by them cannot be deemed incompetent merely because a receiver has been appointed,” the court ruled.

The apex court faulted the appellate court’s January 13, 2026 judgment, which had recognised the receiver as the sole authority to appoint counsel and barred the senior advocates from appearing in the matter.

The case, marked SC/CV/48/2026, arose from an alleged $2 billion debt owed by Nestoil and Neconde to the lender consortium. Following the alleged default, the lenders had appointed a receiver/manager to take control of the companies’ assets and operations.

With this verdict, the Supreme Court reaffirmed that companies retain the residual right to appoint their own legal representatives, even in the face of a contested receivership, thereby reinforcing corporate autonomy within ongoing legal disputes.