In a judgment delivered by Justice Daniel Osiagor on Friday, the court granted all the reliefs sought by the bank, affirmed its jurisdiction to hear the case, and upheld the appointment of the receiver/manager, Romeo Ese, as valid.
The Federal High Court in Lagos has ruled in favour of United Bank for Africa (UBA) in a N156 billion debt recovery suit against Stallion Group and its subsidiaries and upheld the appointment of the receiver/manager, Romeo Ese, by the bank as valid.
It also affirmed the right of the receiver/manager to take possession of the mortgaged property, with the receiver/manager declared to be entitled to seek protective orders,
It also affirmed the right of the receiver/manager to take possession of the mortgaged property, the enforceability of the mortgage security and the liability of the guarantors.
The court also declared that the receiver/manager is entitled to seek protective orders and noted that the defendants did not dispute their indebtedness, even though they challenged the amount claimed.
According to the court, the reconciliation of accounts between the parties did not negate the underlying indebtedness.
In his ruling, Justice Osiagor dismissed the objections raised by Barbedos Ventures Limited, the 12th Defendant, holding that it failed to establish any proprietary rights over the mortgaged property.
On that score, its consent was not required for the creation of the mortgage, and its objections were declined.
The court forbade the defendants from diverting the receivables due to them from government agencies, reinforcing the bank’s ability to protect its recovery interests.
The ruling affirmed the liability of the guarantors, boosting the legal position of UBA to seek recovery of the outstanding obligations.
The ruling is crucial for enforcing creditors’ rights in Nigeria, underscoring the validity of properly constituted security arrangements and the authority of duly appointed receivers to enforce creditors’ interests.
According to UBA, the bank granted several credit facilities to Stallion Nigeria Limited in 2014 on the agreement that the credit facilities could be utilised by other companies within the Stallion Group in accordance with the terms of the offer letter.
The bank said the defendants pledged assets in Kano, Port Harcourt and Lagos as security for the loans.
According to an affidavit deposed to by Anthony Chilaka, the group head, Recovery and Remedial Management Department of UBA, on 18 October 2023, Sunil Vaswani, the chairman of Stallion Group, made a personal guarantee in respect of the facilities.
Stallion Motors was awarded a contract by the Federal Government in 2014 to supply 700 Ashok Leyland trucks/Stallion troop carrying vehicles and 50 Falcon seater buses to be used by the military on the agreement that the receivables from the government would be paid into Stallion’s account with UBA, the bank claimed.
On delivering the vehicles, Stallion Motors allegedly asked the government to make the first payment of $50 million into its Dubai account and received N8.2 billion into its offshore account instead of the UBA account, contrary to the earlier understanding between the parties.
UBA said the defendants failed to settle its debts totalling N156 billion.
Acting on an order of the Federal High Court, Lagos, in November 2023, UBA took over Stallion Group’s assets and those of its subsidiaries in Lagos, Kano, and Port Harcourt as part of the debt recovery push.
The assets comprised mortgaged property known as “all that piece or parcel of land together with any building thereon” at Plot 371, Trans Amadi Industrial Layout, Port Harcourt, Rivers State.
“Plot 353, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, Plot 370, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, KM17, Lagos-Badagry Expressway, Lagos State and No. 54, Challawa Industrial Estate, Kano State, Nigeria.”
