Court Upholds UBA Receiver’s Powers in ₦156.03bn Stallion Debt Case

The Federal High Court in Ikoyi, Lagos has upheld the appointment of United Bank for Africa’s receiver-manager and affirmed the bank’s mortgage security in its ₦156.03 billion debt dispute with Stallion Group. Justice Daniel Osiagor resolved the issues in UBA’s favour and granted the reliefs sought by the bank.

The court restrained the defendants from diverting receivables owed to them by government agencies. It also upheld the liability of guarantors in the case.

Receiver-Manager’s Powers Affirmed

The ruling affirms the receiver-manager’s authority to take possession of the mortgaged property and seek protective court orders. The court upheld the appointment of Romeo Ese Michael as receiver-manager and affirmed his right to take possession of the mortgaged property.

It dismissed objections by the 12th defendant, Barbedos Ventures Limited, which failed to establish proprietary rights over the property. The court held that the company’s consent was therefore not required for the mortgage.

According to court details, the defendants did not dispute their indebtedness. They contested the amount owed. The court also held that reconciliation of accounts did not extinguish the debt.

The Federal High Court further affirmed its jurisdiction to hear the case and upheld the liability of the guarantors.

How The Dispute Started

UBA filed the suit in October 2023, claiming that Stallion Group owed it ₦156.03 billion. Stallion has described the claim as “entirely false.”

The dispute followed an earlier order by Justice Akintayo Aluko allowing UBA to take over assets belonging to Stallion Nigeria Ltd. and its affiliates in Lagos, Port Harcourt and Kano. The order also froze their funds across Nigerian banks.

Attempts by the defendants to overturn those orders failed in December 2023. The defendants include Von Automobile Nigeria, Stallion Motors, The Honda Place and director Sunil Vaswani.

What It Means For Lenders

The ruling reinforces the principle that a dispute over the amount owed does not, by itself, prevent a lender from enforcing its security. It also reinforces UBA’s legal position in enforcing its mortgage security and seeking debt recovery from the primary borrowers and their guarantors.

UBA is also using the same receiver-manager to pursue a separate ₦61.45 billion recovery linked to Western Metal Products Co.