By Ranti Thomas
The Supreme Court of Nigeria has set aside a ruling by the Court of Appeal which disqualified senior lawyers Wole Olanipekun and Muiz Banire from representing companies in a major $2 billion debt dispute.
In a unanimous judgment delivered by Justice Mohammed Baba Idris, the apex court ruled that companies have the right to choose their own legal representatives, especially when the legality of a receivership is being challenged.
The case involves Neconde Energy Limited and Nestoil Limited, which are locked in a dispute with a group of lenders over an alleged $2 billion debt.
The court held that a receiver appointed by lenders cannot take control of a company’s legal representation when the validity of that appointment is itself under dispute.
According to the ruling, allowing such a situation would create a conflict of interest, as the same receiver would be acting in a matter where their authority is being questioned.
The Supreme Court stated that the issues raised in the case go to the core of the receivership, including whether the lenders had the right to appoint a receiver and enforce security over the companies’ assets.
It explained that such matters are fundamental and cannot be treated as routine responsibilities of a receiver managing company affairs.
The court further ruled that proceedings challenging a receivership do not fall under the general powers granted to a receiver under the Companies and Allied Matters Act.
As a result, the companies cannot be denied the right to defend themselves through their board of directors and lawyers of their choice.
“The defence of the action through its directors and the counsel retained by them cannot be said to be invalid merely because a receiver has been appointed,” the court declared.
The apex court faulted the earlier decision of the Court of Appeal delivered on January 13, 2026, which had recognised the receiver as the sole authority to appoint legal representatives for the companies.
It described the decision as flawed, noting that the lower court failed to consider the conflict involved in allowing a disputed receiver to control the companies’ defence.
The dispute arose after lenders, including FBNQuest Merchant Bank Limited and FBN Trustees Limited, appointed a Receiver/Manager following an alleged loan default.
The case, marked SC/CV/48/2026, centres on whether that appointment was valid and whether the receiver could exercise full control over the companies.
With this ruling, the Supreme Court has clarified that companies retain the right to independent legal representation when challenging receivership arrangements.
The judgment is expected to have significant implications for corporate governance and debt recovery cases in Nigeria, particularly in disputes involving lenders and insolvency proceedings.