Court Upholds UBA’s N156bn Debt Recovery Move Against Stallion Group

Justice Daniel Osiagor of the Federal High Court in Lagos has affirmed (UBA) Plc’s appointment of a receiver/manager to recover an alleged N156.03 billion debt from Stallion Group, ruling that the bank can enforce its securities over properties pledged for the loan facilities.

Justice Osiagor, in a judgment delivered on Friday, also restrained Stallion Group companies and other defendants from diverting receivables due to them from government agencies, in a move aimed at safeguarding funds that could be applied towards settling the outstanding debt.

The court affirmed the validity of the mortgage arrangements securing the facilities and upheld the appointment of Romeo Ese as receiver/manager, empowering him to take possession of the mortgaged properties and seek court orders to protect the assets.

The judge further held that although the defendants did not dispute their indebtedness to UBA, they contested the amount claimed by the bank.

He also ruled that the parties’ account reconciliation did not extinguish the debt or deprive UBA of its right to enforce the securities provided for the facilities.

Justice Osiagor further dismissed an objection by Barbedos, the 12th defendant, challenging the mortgage arrangements on the ground that it should have obtained its consent before the transactions were concluded.

The judge held that Barbedos failed to establish any proprietary interest in the mortgaged property and, consequently, had no legal basis to insist that its consent was required to create the mortgages.

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

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

The earlier orders covered industrial and commercial properties in Lagos, Port Harcourt, and Kano.

UBA had alleged that Stallion Group and related entities owed it approximately N156.03 billion, leading to litigation involving several companies within the conglomerate and their guarantors.

However, 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 the reconciliation of accounts and restructuring of the facilities.

The dispute later led to procedural disagreements, including a request by counsel to some defendants to transfer the case from the court of Justice Akintayo Aluko, who had handled earlier applications.