Supreme Court Resolves 40-Year Receivership Controversy

The Supreme Court of Nigeria delivered a landmark judgment on November 27, 2025, resolving a 40-year controversy regarding the rights of companies in receivership. The court ruled that the appointment of a receiver does not impair a company's legal personhood or its rights.

This decision arose from a case involving Nestoil and its junior lender, FBN Quest Merchant Bank Ltd, which challenged the appointment of a receiver. Chief Wole Olanipekun led the legal team that successfully urged the Supreme Court to set aside a previous judgment that compromised fundamental principles of justice.

The court's unanimous decision, delivered by a five-member panel, clarified that a debtor company can contest the validity of a receiver's appointment, reinforcing the legal framework surrounding insolvency practices in Nigeria. This ruling is seen as a watershed moment for insolvency law, providing much-needed clarity and addressing the legal limbo faced by companies in similar situations.