United Bank for Africa (UBA) Plc has secured a major legal victory in its ₦156bn debt recovery proceedings against the Vaswani Brothers and Stallion Group, after the Federal High Court in Lagos granted all the reliefs sought by the bank.
Justice Daniel Osiagor of the Federal High Court, sitting in Ikoyi, Lagos, delivered the judgment on Friday, affirming UBA’s enforcement rights, the validity of its appointed Receiver/Manager and the liability of the guarantors.
The ruling also restrains the defendants from diverting receivables due to them from government agencies, strengthening the bank’s efforts to recover its outstanding exposure.
₦156bn debt recovery: Court upholds receiver’s appointment
The court upheld the appointment of UBA’s Receiver/Manager, Romeo Ese, affirming his entitlement to take possession of the mortgaged property and seek appropriate protective orders.
The decision reinforces the bank’s position in the ₦156bn debt recovery dispute, particularly its ability to enforce security arrangements established to protect its lending interests.
The court also affirmed its jurisdiction to hear the case, resolving the jurisdictional issue in UBA’s favour.
In addition, the judgment upheld the enforceability of the mortgage security, providing further legal backing for the bank’s recovery efforts against Stallion Group and the other defendants.
Defendants challenged amount owed, not indebtedness
The court observed that the defendants did not dispute their indebtedness to UBA. Their challenge centred on the amount claimed by the bank.
However, the court held that the reconciliation of accounts between the parties did not extinguish or negate the underlying indebtedness.
The finding is significant to the ₦156bn debt recovery proceedings because disagreements over the precise outstanding amount did not, in themselves, invalidate the underlying obligation.
The judgment therefore supports the continuation of lawful enforcement measures, subject to the applicable legal processes.
Guarantors held liable as court dismisses objection
The court also affirmed the liability of the guarantors, strengthening UBA’s legal position in pursuing recovery of the outstanding obligations.
Separately, the judge dismissed the objection raised by the 12th defendant, which failed to establish proprietary rights over the mortgaged property.
Consequently, the court held that the defendant’s consent was not required for the creation of the mortgage. Its objections were therefore rejected.
The decision removes that particular challenge to the security arrangement and reinforces the bank’s enforcement position in the ₦156bn debt recovery case.
Court restricts diversion of government receivables
In another significant aspect of the judgment, the court restrained the defendants from diverting receivables due to them from government agencies.
The restriction is intended to protect UBA’s recovery interests while the outstanding obligations remain unresolved. It also gives practical effect to the court’s affirmation of the Receiver/Manager’s authority to seek protective orders.
The ruling could have implications for creditor enforcement in Nigeria, particularly where lenders rely on mortgage security, guarantees and court-backed protective measures to recover outstanding debts.
For banks and other creditors, the decision underscores the importance of properly constituted security arrangements and enforceable guarantees when extending credit.
UBA wins all reliefs sought
The judgment represents a comprehensive victory for UBA, with the court resolving all issues submitted for determination in the bank’s favour and granting all the reliefs sought.
For the ₦156bn debt recovery proceedings, the outcome strengthens the bank’s legal position against the Vaswani Brothers and Stallion Group.
It also reinforces the distinction between disputing the calculation of an outstanding debt and denying the underlying obligation.
The court’s decision marks a significant development in UBA’s efforts to recover its exposure to Stallion Group and protect the interests of the bank and its stakeholders.
