The Nigerian National Petroleum Company Limited (NNPC Ltd) has secured a major legal victory after the Court of Appeal in Abuja set aside a ruling that had awarded ₦5 billion in damages to Senator Ifeanyi Araraume and reinstated him as the company’s non-executive chairman.

The dispute began when Araraume was removed from his position on the NNPC board, a decision he challenged at the Federal High Court. In April 2023, the lower court held that his removal was unlawful, ordered his reinstatement, and granted him ₦5 billion in compensation.

NNPC Ltd appealed the decision, arguing that Araraume’s claims were statute-barred. On Tuesday, the Court of Appeal agreed with the company, nullifying the High Court’s judgment.

Legal analysts say the ruling not only saves NNPC Ltd from a significant financial payout but also secures the company’s governance structure. The decision effectively validates all resolutions and actions taken by the board since its reconstitution in 2021, removing any uncertainty that could have undermined corporate operations.

In a statement to the media, NNPC Ltd welcomed the judgment, describing it as a milestone for corporate governance in Nigeria. The company emphasized that the ruling ensures stability in board decision-making and sets a precedent for judicial limits in corporate affairs.

Observers note that the judgment reinforces investor confidence in the oil and gas industry by affirming the independence and authority of corporate boards to make decisions without the risk of prolonged legal disputes.