By Chibuzor Alli
United Bank for Africa (UBA) Plc has secured a major legal victory in its bid to recover an alleged N156bn debt from Stallion Group and related parties, with the Federal High Court in Lagos upholding the bank’s security arrangements and the authority of its receiver-manager.
The ruling strengthens UBA’s position in the recovery dispute, allowing its appointed receiver to take possession of mortgaged property and seek court orders to protect the assets tied to the debt.
Justice Daniel Osiagor, sitting at the Federal High Court in Ikoyi, Lagos, resolved all issues in the bank’s favour and granted the reliefs it sought, according to the judgment.
The court also restrained the defendants from diverting payments owed to them by government agencies, reinforcing measures aimed at protecting the bank’s recovery interests.
Court backs UBA’s receiver and mortgage security
At the centre of the decision was the validity of UBA’s receiver-manager appointment and the mortgage security underpinning its recovery efforts.
The court confirmed Romeo Michael as receiver-manager, recognising his authority to take possession of the mortgaged property and seek protective orders.
It also held that although the defendants disputed the amount owed, they did not deny the existence of the debt. The court further ruled that reconciling the accounts would not, by itself, extinguish the outstanding obligation.
The judgment therefore reinforces the distinction between a disagreement over the amount payable and a denial that a debt exists.
Barbedos Ventures loses challenge to mortgage
The court also dismissed objections by Barbedos Ventures Limited, the 12th defendant in the case, after finding that the company had failed to establish proprietary rights over the mortgaged property.
Consequently, the court held that Barbedos Ventures’ consent was not required for the creation of the mortgage and rejected its objections.
The decision removes a key challenge raised against the security arrangements on which UBA is relying in its recovery proceedings.
Dispute traces back to asset takeover orders
The legal battle dates back to orders granted by Justice Akintayo Aluko, who authorised UBA to take control of assets belonging to Stallion Nigeria Ltd. and its affiliates in Lagos, Port Harcourt and Kano.
The earlier orders also provided for the freezing of funds held by the affected parties across Nigerian banks.
Attempts by the defendants to overturn those orders were unsuccessful in December 2023.
The parties named in the dispute include Von Automobile Nigeria, Stallion Motors, The Honda Place and company director Sunil Vaswani.
Implications for creditors and secured lending
Beyond UBA’s recovery efforts, the ruling highlights the importance of properly constituted mortgage security and the legal authority of receivers appointed to protect creditors’ interests.
For lenders, the decision underscores the role of enforceable security arrangements in debt recovery, particularly where disputes arise over the value of outstanding obligations or the rights attached to mortgaged assets.
The outcome represents a significant development in UBA’s three-year recovery effort. However, the ruling should not be interpreted as confirmation that the entire N156bn has already been recovered; it strengthens the bank’s legal position in pursuing the debt.
Leave a comment