The Federal High Court in Ikoyi, Lagos, has ruled in favour of United Bank for Africa (UBA) Plc in its three-year legal effort to recover funds it claims Stallion Group owes. Justice Daniel Osiagor delivered the judgment, resolving all issues in UBA's favour and granting all the reliefs sought by the bank, according to MoneyCentral's report of the court proceedings.
Court Upholds UBA's Receiver and Mortgage Security
The court confirmed Romeo Ese Michael as the receiver-manager, affirming his right to take possession of the mortgaged property and to seek protective orders. It also barred the defendants from diverting payments owed to them by government agencies, reinforcing UBA's ability to protect its recovery interests. The court held that the defendants did not dispute owing money, only the amount, and that a reconciliation of accounts did not cancel the debt.
The judgment also addressed objections raised by the 12th Defendant, Barbedos Ventures Limited. The court dismissed these objections, holding that the company failed to establish any proprietary rights over the mortgaged property. Consequently, its consent was not required for the creation of the mortgage.
Details of the Debt Recovery Suit
UBA filed the suit in October 2023, claiming N156.03 billion as the amount owed. Stallion Group has called the claim "entirely false," though the court's written judgment and Stallion's formal response to the ruling were not immediately available. The case began when Justice Akintayo Aluko granted UBA orders to take over assets of Stallion Nigeria Ltd. and its affiliates in Lagos, Port Harcourt, and Kano, and to freeze their funds across Nigerian banks. Stallion's attempts to lift those orders failed in December 2023.
The defendants in the case include Von Automobile Nigeria, Stallion Motors, The Honda Place, and director Sunil Vaswani. The ruling strengthens a principle Nigerian lenders rely on: arguing over how much is owed does not, by itself, stop a creditor from enforcing its security.
Implications for Creditors' Rights in Nigeria
The decision represents a comprehensive victory for UBA, with the court resolving all issues in the bank's favour. The ruling is particularly significant for the enforcement of creditors' rights in Nigeria, underscoring the legal validity of properly constituted security arrangements and the authority of duly appointed receivers to enforce creditors' interests. The judgment marks a major milestone in UBA's efforts to recover its exposure to Stallion Group and safeguard the interests of the bank and its stakeholders.
Key highlights of the judgment include: the Federal High Court, Ikoyi, affirmed its jurisdiction to hear the case; the judgment was delivered by Justice Daniel Osiagor of Court 6; the defendants did not dispute their indebtedness, only the amount owed; the guarantors were held liable; the appointment of the receiver/manager was upheld as valid; the receiver/manager's right to take possession of the mortgaged property was affirmed; the receiver/manager was held to be entitled to seek protective orders; the court held that the reconciliation exercise did not negate the indebtedness; the objection of the 12th Defendant was dismissed; and the defendants were restrained from diverting receivables due to them from government agencies.
UBA is using the same receiver to pursue N61.45 billion linked to Western Metal Products Co., indicating the broader application of the legal principle established in this case.
