UBA wins court ruling in N156.03bn debt dispute with Stallion Group

The Federal High Court in Lagos has ruled in favour of United Bank for Africa Plc (UBA) in a N156.03 billion debt recovery dispute with Stallion Group, upholding the bank’s appointment of a receiver/manager and its right to enforce mortgage securities pledged against the loans.

In a judgment delivered on Friday, Justice Daniel Osiagor ruled in favour of UBA on all issues submitted for determination, validating the mortgage arrangements, affirming the liability of the guarantors and restraining the defendants from diverting payments due to them from government agencies.

The ruling strengthens UBA’s position in its efforts to recover the outstanding debt from Stallion Nigeria Limited and several associated companies within the conglomerate, which is owned by the Vaswani brothers.

Osiagor held that the defendants did not dispute their indebtedness to the bank but challenged the amount claimed. He also ruled that the reconciliation of accounts between the parties did not extinguish the underlying obligation or invalidate UBA’s right to enforce its security.

The court upheld the appointment of Romeo Ese as receiver/manager, affirming his authority to take possession of the mortgaged properties and seek orders to protect the assets from actions that could undermine the recovery process.

The decision marks a significant development in a dispute that has been before the courts since 2023, when UBA initiated proceedings to recover the debt and enforce its interests over assets pledged as security.

The bank had alleged that Stallion Group owed approximately N156.03 billion, prompting litigation involving several companies within the group and their guarantors.

The court’s decision also addresses concerns over the recovery of funds through receivables. By restraining the defendants from diverting payments accruing to them from government agencies, the judgment limits their ability to redirect those funds in a manner that could frustrate the bank’s recovery efforts.

The order gives UBA an additional avenue to protect the value of its claims while enforcement proceedings continue.

In another aspect of the judgment, the court dismissed an objection by Barbedos, the 12th defendant, which had challenged the mortgage arrangements on the grounds that its consent was required.

Osiagor held that Barbedos had failed to establish a proprietary interest in the mortgaged property and, consequently, had no legal basis to insist that its consent should have been obtained before the mortgage was created.

The court also resolved the jurisdictional question in UBA’s favour, affirming its competence to hear the bank’s claims.

The outcome means the defendants failed to secure a ruling against the bank on any of the issues submitted for determination, with the court granting the reliefs sought by UBA.

The dispute dates to October 2023, when UBA obtained interim orders from the Federal High Court to enforce its security over assets belonging to Stallion Nigeria Limited and its subsidiaries.

The properties affected by the earlier orders included industrial and commercial assets in Lagos, Port Harcourt, and Kano, reflecting the geographical spread of the group’s business interests.

In November 2023, Stallion Group disputed the bank’s account of the debt controversy, maintaining that it had made substantial repayments and was engaged in discussions with UBA over account reconciliation and restructuring.

The disagreement over the amount outstanding subsequently became part of the wider legal proceedings between the bank and the companies linked to the conglomerate.

The case also encountered procedural disputes, including a request by counsel representing some of the defendants for the matter to be transferred from the court of Justice Akintayo Aluko, who had handled earlier applications.

However, the latest judgment has affirmed the validity of the mortgage securities and UBA’s authority to pursue recovery through the appointed receiver/manager.