United Bank for Africa (UBA) Plc says it has secured a favourable judgment at the Federal High Court in Lagos in its long-running dispute with Stallion Group and the Vaswani brothers over an alleged N156 billion debt.
According to a statement issued by UBA and made available to Nairametrics, Justice Daniel Osiagor of the Federal High Court, Ikoyi, Lagos, upheld the appointment of Romeo Ese as Receiver/Manager over assets connected to the debt recovery proceedings.
The bank said the court delivered the judgment on Friday, ruling in its favour on the issues presented for determination, including the enforceability of mortgage securities and the liability of guarantors.
The dispute involves Stallion Group, whose Group Chairman is Sunil Vaswani, and its Managing Director/Chief Executive Officer, Mahesh Vaswani.
Nairametrics has not independently reviewed a copy of the judgment and has been unable to obtain confirmation or a response from Stallion Group regarding the latest development. The details of the ruling reported in this article are based on UBA’s statement.
The development represents another chapter in the prolonged legal dispute between the bank and companies associated with Stallion Group over the alleged outstanding debt.
What UBA is saying about the judgment
According to UBA, the court upheld the appointment of the Receiver/Manager and affirmed the bank’s right to enforce the mortgage security associated with the disputed facilities.
The bank stated that the court granted the reliefs it sought, including recognition of the Receiver/Manager’s authority to take possession of the mortgaged property and seek protective orders where necessary.
- “In a major affirmation of UBA’s enforcement rights, the Court upheld the appointment of the Receiver/Manager and confirmed his entitlement to take possession of the mortgaged property and seek appropriate protective orders,” the bank stated.
UBA also reported that the court considered the question of the defendants’ indebtedness and the amount being claimed.
According to the bank’s account of the proceedings, the defendants did not dispute the existence of indebtedness but challenged the amount claimed by UBA.
The bank said the court determined that the reconciliation of accounts between the parties did not invalidate the underlying debt obligations.
UBA further stated that the court dismissed objections raised by the 12th defendant concerning proprietary rights over the mortgaged property.
According to the statement, the court found that the defendant had not established sufficient proprietary rights to require its consent before the mortgage was created.
- “Consequently, its consent was not required for the creation of the mortgage, and its objections were rejected,” UBA stated in its account of the ruling.
The bank also reported that the court issued orders restraining the defendants from diverting receivables due to them from government agencies, as part of measures to protect UBA’s recovery interests.
Additionally, UBA said the judgment affirmed the liability of the guarantors under the relevant financing arrangements.
These findings, as described by the bank, would strengthen UBA’s legal position in its efforts to recover the disputed debt.
However, the full scope of the court’s orders, the specific assets affected and any potential grounds for appeal remain subject to confirmation from the judgment itself.
UBA describes ruling as significant for debt recovery
UBA described the judgment as a major development in its efforts to recover the alleged outstanding obligations from Stallion Group and associated parties.
The bank maintained that the ruling reinforced the enforceability of mortgage securities and the authority of duly appointed receivers to recover debts under applicable legal arrangements.
- “It also reinforces the principle that disputes over the precise amount of an outstanding debt do not, by themselves, invalidate the underlying indebtedness or prevent creditors from exercising their lawful recovery rights,” the bank added.
UBA argued that the decision strengthens its ability to pursue recovery of the outstanding obligations and protect the interests of the bank and its stakeholders.
While UBA has presented the judgment as a comprehensive victory, Nairametrics has not independently established whether the defendants intend to challenge the decision or whether further proceedings are contemplated.
Backstory: UBA’s N156 billion debt dispute
The latest development follows legal proceedings initiated by UBA in 2023 against Stallion Nigeria Limited and several associated companies over an alleged indebtedness of N156 billion.
At the time, the bank sought to enforce securities connected to the facilities, leading to court proceedings involving assets associated with the defendants.
According to an earlier report by TheCable, the court had approved the takeover of disputed assets as part of the debt recovery proceedings.
Stallion Nigeria Limited, however, disputed the bank’s claims at the time.
The company maintained that Stallion Nigeria Limited was the only entity within Stallion Group that had entered into a financing contract with UBA, challenging the broader claims involving associated companies.
The disagreement over the debt and the entities responsible for repayment subsequently became part of the wider legal dispute.
The latest judgment, as described by UBA, appears to address several of the contested issues, particularly the enforceability of the securities and the liability of guarantors.
Nevertheless, the exact implications for Stallion Group and the Vaswani brothers will depend on the terms of the court’s judgment and any subsequent legal proceedings.
What you should know
Stallion Group has previously faced debt-related disputes involving Nigerian financial institutions.
- In December 2019, Nairametrics reported that Stallion Motors’ showrooms on Victoria Island, Lagos, had been sealed following an ex parte court order connected to debt recovery proceedings.
- At the time, Stallion Motors’ Chief Executive Officer, Anant Badjatya, dismissed claims that the automobile company’s operations had been shut down over an alleged N330 billion debt owed to Nigerian banks and the Asset Management Corporation of Nigeria (AMCON).
- Badjatya said the enforcement action had been taken without the company’s knowledge and maintained that its financial position remained sound.
- He stated that Stallion Motors had assets exceeding N750 billion against liabilities of approximately N150 billion, which he described as a healthy debt position.
The 2019 dispute provides historical context to the group’s dealings with creditors but should not be confused with the current UBA proceedings.
This is a developing story…