United Bank for Africa Plc has won a Federal High Court ruling supporting its efforts to recover funds from Stallion Group, as the lender seeks to enforce loan security it says backs an outstanding debt of ₦156.03 billion.
Key takeaways
- The Federal High Court in Ikoyi, Lagos, validated UBA’s mortgage security and the appointment of a receiver-manager.
- Justice Daniel Osiagor found that the defendants acknowledged owing money, although they challenged the amount claimed.
- Romeo Ese Michael may take control of the secured property and apply for court protection to preserve the assets.
- The court barred the defendants from redirecting money due from government agencies.
- Barbedos Ventures Limited failed in its challenge because it did not prove ownership rights in the mortgaged asset.
Court backs UBA’s recovery measures
Justice Daniel Osiagor, sitting in Court 6 of the Federal High Court in Ikoyi, Lagos, decided every issue in favour of UBA and granted the remedies sought by the lender. The court also confirmed that it had jurisdiction to hear the case.
The judgment upheld the designation of Romeo Ese Michael as receiver-manager. Under the ruling, he is authorised to assume possession of the property used as mortgage collateral and can seek protective orders where needed.
The court further prohibited the defendants from diverting receivables payable to them by government bodies, strengthening UBA’s ability to preserve potential recovery proceeds.
While the defendants did not deny that they were indebted, they disputed the size of the amount due. The court ruled that an account-reconciliation process had not cancelled or discharged the underlying debt.
An objection filed by the 12th defendant, Barbedos Ventures Limited, was dismissed. The company did not establish proprietary interest in the mortgaged property, the court found, meaning its approval was not necessary when the mortgage was created.
UBA initiated the action in October 2023, claiming ₦156.03 billion from Stallion Group. Stallion Group had called the claim “entirely false.” The written decision and the group’s reaction to the latest ruling were not immediately available.
Earlier asset orders and wider implications
The dispute began after Justice Akintayo Aluko issued orders allowing UBA to take over assets of Stallion Nigeria Ltd. and related companies in Lagos, Port Harcourt and Kano. The orders also froze the defendants’ funds held at Nigerian banks. Efforts by the defendants to have those orders set aside were unsuccessful in December 2023.
Other defendants in the case include Von Automobile Nigeria, Stallion Motors, The Honda Place and Stallion director Sunil Vaswani. The guarantors were also found liable under the court’s decision.
The ruling reinforces a key principle for Nigerian lending: a borrower’s challenge to the precise debt figure does not by itself stop a creditor from enforcing properly established security. UBA is also using the same receiver-manager in a separate recovery effort involving ₦61.45 billion linked to Western Metal Products Co.
For UBA, the decision is a significant step in its three-year campaign to recover its exposure to Stallion Group and protect the interests of the bank and its stakeholders. More broadly, the judgment underlines the enforceability of valid security arrangements in Nigeria and confirms the powers of duly appointed receivers to safeguard creditors’ interests.
