.…Affirms guarantors’ liability, mortgage security
The Federal High Court in Lagos has ruled in favour of United Bank for Africa (UBA) Plc in its N156.03 billion debt recovery suit against the Vaswani brothers and companies linked to Stallion Group, upholding the bank’s receiver-manager, mortgage security and the liability of guarantors.
Justice Daniel Osiagor, sitting at the Federal High Court in Ikoyi, Lagos, resolved the issues in the case in favour of UBA and granted the reliefs sought by the bank, according to a report by MoneyCentral.
The court affirmed the appointment of Romeo Ese Michael as receiver-manager, recognising his authority to take possession of the mortgaged property and seek protective orders to safeguard the bank’s recovery interests.
It also restrained the defendants from diverting receivables due to them from government agencies, strengthening UBA’s efforts to recover the outstanding debt.
According to the report, the court held that the defendants did not dispute their indebtedness to the bank but contested the amount owed. It further ruled that the reconciliation of accounts between the parties did not extinguish the debt.
The court also dismissed objections by the 12th defendant, Barbedos Ventures Limited, which failed to establish proprietary rights over the mortgaged property. Consequently, the court held that the company’s consent was not required for the creation of the mortgage.
UBA instituted the suit in October 2023, claiming N156.03 billion from Stallion Group and related entities. Stallion had previously described the bank’s claim as “entirely false”.
However, the written judgment and Stallion’s response to the latest ruling were not immediately available, according to the report.
The dispute dates back to earlier proceedings in which Justice Akintayo Aluko granted UBA orders to take control of assets belonging to Stallion Nigeria Limited and its affiliates in Lagos, Port Harcourt and Kano, while also ordering the freezing of their funds across Nigerian banks.
Attempts by the defendants to overturn those orders were unsuccessful in December 2023.
The defendants in the dispute include Von Automobile Nigeria, Stallion Motors, The Honda Place and director Sunil Vaswani, alongside other related entities.
The latest ruling reinforces the legal principle that a disagreement over the precise amount owed does not, by itself, invalidate an established debt or automatically prevent a creditor from enforcing valid security arrangements.
UBA is also using the same receiver-manager in efforts to recover N61.45 billion linked to Western Metal Products Company, according to the report.
The judgment is a significant development in the bank’s efforts to recover its exposure to Stallion Group and protect the interests of its stakeholders.
It also underscores the importance of properly constituted mortgage security and the legal authority of duly appointed receivers in debt recovery proceedings.
The court’s decision further affirms the liability of the guarantors and the receiver-manager’s right to take possession of the mortgaged property and seek judicial protection for assets connected to the recovery process.