Supreme Court restores Olanipekun, Banire as counsel in $2bn debt dispute
The Supreme Court has set aside the decision of the Court of Appeal which disqualified Chief Wole Olanipekun (SAN) and Dr Muiz Banire (SAN) from representing Neconde Energy Limited and Nestoil Limited in a dispute over an alleged $2bn indebtedness.
In a unanimous judgment delivered by Justice Mohammed Idris, the apex court affirmed the right of the companies to retain legal representation of their choice, despite the appointment of a receiver by a consortium of lenders led by FBNQuest Merchant Bank Limited and FBN Trustees Limited.
The court held that where the validity of a receiver’s appointment is being challenged, such a receiver cannot assume control over the company’s legal representation in the same proceedings.
The ruling effectively reinstated Olanipekun and Banire as counsel to the companies, overturning the earlier position of the appellate court which had recognised the receiver as the sole authority to appoint lawyers for the firms.
The dispute arose from claims that Nestoil Limited and Neconde Energy Limited were indebted to the lender consortium, which subsequently appointed a receiver/manager following an alleged default.
The apex court ruled that issues surrounding the legality of the receivership go beyond routine administrative matters and strike at the core of the arrangement, making it inappropriate for the receiver to dictate legal representation.
“It would occasion a conflict of interest for a receiver, appointed by parties whose rights are being challenged, to also determine the legal representation of the company in the same proceedings,” the court held.
The court further clarified that proceedings challenging the validity of a receivership do not fall within the general powers granted to a receiver under the Companies and Allied Matters Act. It concluded that in such circumstances, the companies retain residual authority through their directors to defend themselves using counsel of their choice, reinforcing a key principle of corporate law regarding independent legal representation.
