United Bank for Africa Plc (UBA) has secured an interim court order against Switzerland-based energy trading company, Vitol SA, over an alleged diversion of petroleum products valued at $242 million.
The Lagos State High Court, last Thursday, granted three interim preservative prayers sought by UBA, including orders aimed at preventing the dissipation of assets and dealings with funds up to the disputed amount.
The bank is accusing Vitol SA and four other shipping companies of allegedly failing to deliver petroleum products consigned to its order under the relevant bills of lading.
UBA’s lead counsel, Bode Olanipekun, SAN, urged the court to grant the interim reliefs to preserve assets connected with the dispute pending the determination of the substantive case.
In her ruling, Justice K. A. Jose granted three prayers in the bank’s application against Vitol SA, the second respondent in the proceedings.
“Prayers 1–3 are granted as prayed against the 2nd Respondent only,” the judge ruled.
The application was brought pursuant to Order 43 Rule 1 of the High Court of Lagos State (Civil Procedure) Rules 2019 and the Lagos State High Court Practice Direction No. 2 of 2019.
In the substantive proceedings, UBA is seeking to establish that Vitol SA and the owners of the vessels involved in the transactions are liable for alleged conversion, misrepresentation and negligence arising from the non-delivery of the petroleum products.
The bank also cited 34 financial institutions and public agencies in connection with the application, including commercial banks, merchant banks, microfinance banks, the Nigerian Ports Authority and the Nigeria Customs Service.
In an affidavit supporting the application, UBA’s Group Head of Recoveries and Remedial Management, Anthony Chilaka, said the bank had issued a letter of credit in favour of Vitol SA to facilitate petroleum products transactions.
According to the affidavit, the cargoes were transported to Nigeria, after which the masters of the vessels issued several bills of lading covering the shipments.
Chilaka stated that Vitol subsequently endorsed the bills of lading “to the order of” UBA and handed over the original documents to the bank.
UBA maintained that the endorsement entitled it to take possession of the cargoes upon completion of the voyages. However, the bank alleged that it had not received the gasoil despite the vessels completing their journeys.
“The applicant has not been given possession of the gasoil despite completion of the voyage,” the affidavit stated.
The bank further alleged that the petroleum products were instead diverted for the use of another party, arguing that the failure to deliver the cargoes amounted to conversion and negligence.
UBA contended that the respondents had obligations arising from the transactions and the endorsement of the shipping documents but allegedly failed to fulfil them.
It also alleged that other cargoes associated with the transactions were diverted to third parties after completing their voyages rather than being delivered to the bank as stipulated in the shipping documents.
The interim order represents a preservative measure in the ongoing dispute, while the substantive allegations of liability remain subject to determination by the court.