Appeal court overturns N5bn award to Araraume against NNPC

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Barbara Bako, Abuja.

The Court of Appeal in Abuja has overturned a Federal High Court ruling that ordered the Nigerian National Petroleum Company Limited (NNPC Ltd) to pay N5 billion in damages to Senator Ifeanyi Araraume following his removal as non-executive chairman of the company’s board.

In its judgment delivered on August 8, 2025, the appellate court upheld NNPC Ltd’s appeal and struck out the April 2023 decision of the lower court, which had declared Araraume’s removal unlawful and invalidated board resolutions taken since 2021.

In a statement by the NNPC Ltd’s states that, the Court of Appeal agreed with the company’s argument that the case was statute-barred, meaning it was filed outside the legal time limit allowed by law.

The panel of justices found that the Federal High Court erred in its earlier ruling, and that the claims could not be sustained.

The decision spares NNPC Ltd from a massive financial payout and removes the legal uncertainty surrounding the validity of its board decisions over the past four years.

Industry watchers say the ruling secures governance stability for the state-owned oil firm, safeguards investor confidence, and sets a new precedent in Nigerian corporate governance law.

Earlier, the dispute dates back to September 2021 when President Muhammadu Buhari appointed Senator Araraume as non-executive chairman of NNPC Ltd’s board following the company’s incorporation under the Petroleum Industry Act.

Barely three months later, his name was removed from the board without an official explanation, and another person was appointed in his place.

Araraume subsequently sued, claiming his removal was unlawful and demanding ₦100 billion in damages.

In April 2023, the Federal High Court ruled partly in his favour, awarding him ₦5 billion and nullifying the board’s decisions since his removal — a ruling now overturned by the Court of Appeal.

NNPC Ltd, a key player in Nigeria’s oil and gas sector, has been undergoing reforms since its transition into a limited liability company in 2021 under the Petroleum Industry Act.

The Court of Appeal’s verdict is expected to provide clarity and stability for ongoing policy and investment decisions in the sector.