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By Lizzy Chirkpi
A high-stakes legal battle over control of Nestoil and Neconde Energy erupted into open court at the Court of Appeal, Lagos Division, laying bare an intense struggle between creditor banks, court-appointed receivers, and the embattled board of oil magnate Ernest Azudialu-Obiejesi over who controls the companies’ legal fate in a staggering US$2 billion debt dispute.
On Friday, January 23, 2026, the Court of Appeal commenced hearing arguments on a fiercely contested application seeking to disqualify senior advocates retained by the companies’ former management, following intervention by the Supreme Court after efforts to broker a settlement collapsed.
At the centre of the dispute lies a question with far-reaching consequences for corporate governance in Nigeria: can a company alleged to be under receivership continue to engage legal counsel through its board of directors, or does that authority vest exclusively in court-appointed receivers?
The Supreme Court, on January 12, 2026, directed the Court of Appeal to conclusively determine the issue of legal representation after rival Senior Advocates laid competing claims to lawful authority over the 1st Respondent. The directive followed appeals against the appellate court’s interim order of November 27, 2025.
“This Court made frantic efforts to resolve this impasse in futility,” the appellate panel disclosed, noting that the apex court’s order had now empowered it to confront the matter squarely.
Court records show that the 1st Respondent/Applicant, through Ayoola Ajayi, SAN, filed a Motion on Notice dated December 4, 2025, seeking to disqualify Dr. Muiz Banire, SAN; Kunle Adegoke, SAN; Mofesomo Tayo Oyetibo, SAN; Terna J. Yaji, Esq; Emmanuel Chuks Nwanna, Esq; and Matthew Onoja, Esq—all of M.A. Banire & Associates—from representing the company in the appeal.
The Applicant further urged the court to strike out all processes filed by the firm after December 3, 2025, contending that they were filed without lawful authority.
Relying on Sections 553 and 556 of the Companies and Allied Matters Act (CAMA) 2020—particularly subsection (3) and the Eleventh Schedule—Ajayi, SAN, argued that once a receiver is validly appointed, the power to appoint legal counsel rests solely with the receiver.
“The duties of a receiver expressly include the power to appoint a solicitor or other professionally qualified persons to assist him in the performance of his functions,” Ajayi told the court, insisting that all actions taken by the former board after the onset of receivership were null and void.
The application, however, drew fierce opposition from Dr. Muiz Banire, SAN, whose team described the move as a deliberate attempt to silence the company’s defence and cede total control to creditor banks.
In a counter-affidavit deposed to by Ifeanyi Nwosu, the General Manager (Finance) of the 1st Respondent, Banire’s camp maintained that no valid receivership had crystallized and that the company remained a distinct legal entity entitled to choose its legal representatives.
“A company remains in control of its affairs unless and until a valid receivership is recognized by law,” Olubukola Adeleke, Esq, submitted, relying on Inter Ocean Oil Development Co. (Nig.) v. Fadeyi (2024) and the seminal authority of Salomon v. Salomon & Co. Ltd.
She further contended that the 1st Respondent “was never sued in receivership” before either the Federal High Court or the Court of Appeal, adding that court processes continued to be served at NESTOIL Towers, Victoria Island, Lagos, rather than at the address of any alleged receiver.
Beyond questions of corporate control, Banire’s team anchored its defence on constitutional grounds, warning that depriving the company of its chosen counsel would violate Section 36 of the 1999 Constitution, which guarantees the right to fair hearing.
Yet multiple court filings suggest that the contest over legal representation is merely one front in a broader and more consequential battle.
Documents reviewed by this publication indicate that Nestoil and Neconde are embroiled in a US$2 billion debt confrontation with a consortium of Nigerian banks, whose appointed receivers maintain that the companies’ boards have been stripped of all operational and legal authority.
In a related ruling, court records show that the Court of Appeal has held that once receivership is imposed, the powers of a company’s board are suspended, including the authority to retain external solicitors. On that basis, all processes filed by lawyers engaged by the former management after the alleged receivership were reportedly struck out as incompetent.
Industry sources say the development has significantly strengthened the position of creditor banks, granting receivers sweeping control over the companies’ affairs and hastening debt recovery efforts.
Sources further disclosed that Nestoil’s total exposure is alleged to exceed the minimum capital base of at least four Nigerian banks holding international licences, heightening concerns about potential systemic risk within the financial sector.
With the Supreme Court now seized of the substantive appeal and the Court of Appeal poised to rule on the representation dispute, observers say the Azudialu-Obiejesi-led board is fast running out of legal room to manoeuvre.