Supreme Court Rules in Favour of General Hydrocarbons, Orders Release of FPSO Tamara Tokoni

The Supreme Court has ordered the immediate release of the crude oil aboard the Floating Production Storage and Offloading (FPSO) vessel, Tamara Tokoni, to General Hydrocarbons Limited (GHL), holding that the dispute between the company and First Bank of Nigeria (FirstBank) is contractual in nature and does not fall within the jurisdiction of the Federal High Court as an admiralty matter.

In a unanimous judgment delivered on Friday, a five-member panel of the apex court directed the Chief Registrar of the Court of Appeal and the Admiralty Marshal to hand over the crude cargo aboard the FPSO to General Hydrocarbons without further delay.

The Supreme Court also dismissed the suit instituted by FirstBank and allowed General Hydrocarbons appeal, setting aside the earlier judgment of the Court of Appeal.

The justices held that the lower courts lacked jurisdiction to entertain the matter as an admiralty dispute because the issues before the court arose from contractual obligations between the parties.

The panel comprised Justices Uwani Musa Abba Aji, Adamu Jauro Salawa, Mohammed Lawal Garba Agim, Tijjani Abubakar and Habeeb Adewale Abiru, with Justice Abiru delivering the lead judgment.

The apex court ruled that the crude oil aboard the FPSO Tamara Tokoni should be released to General Hydrocarbons forthwith, effectively ending the interim restrictions placed on the cargo during the litigation.

The judgment overturns the earlier decision of the Court of Appeal, which had sustained orders affecting the crude cargo pending the resolution of the dispute between General Hydrocarbons and FirstBank.

The legal battle stemmed from disagreements between the parties over rights connected to the crude oil aboard the FPSO, with FirstBank approaching the courts to secure orders over the cargo.

However, the Supreme Court held that the dispute was rooted in contractual arrangements rather than issues arising under Nigeria's admiralty jurisdiction, making the Federal High Court's exercise of admiralty powers inappropriate in the circumstances.

By allowing the appeal, the apex court effectively brought the litigation to a close and restored General Hydrocarbons' control over the crude oil aboard the FPSO.

The ruling is expected to have significant implications for commercial disputes involving financing arrangements and contractual claims in Nigeria's oil and gas sector, particularly where parties seek admiralty remedies in matters that are essentially contractual.