Court Rules in Favor of UBA in N156 Billion Debt Case Against Stallion Group

The Federal High Court in Lagos has backed United Bank for Africa (UBA) in a N156 billion debt recovery case against Stallion Group and its subsidiaries. The court also confirmed the appointment of Romeo Ese as the receiver/manager by the bank.

Justice Daniel Osiagor delivered the judgment on Friday. The court granted all the requests made by UBA and confirmed its right to handle the case.

The court affirmed that the receiver/manager can take control of the mortgaged properties. The receiver/manager was also given the right to seek protective orders.

The court pointed out that the defendants did not deny they owed money, even though they questioned the amount. The court stated that reconciling accounts between the parties did not change the fact that there was still money owed.

Justice Osiagor rejected objections from Barbedos Ventures Limited, the 12th Defendant. The judge said Barbedos Ventures did not prove any ownership rights over the mortgaged property.

Because of this, Barbedos Ventures' consent was not necessary for the mortgage. The court turned down their objections.

The court ordered the defendants not to divert any payments due to them from government agencies. This decision helps UBA protect its chances of recovering the debt.

The ruling also confirmed the responsibility of the guarantors, strengthening UBA's position to recover the debts owed.

This ruling is important for enforcing creditors' rights in Nigeria. It shows that security arrangements are valid and that appointed receivers can enforce creditors’ interests.

UBA stated that in 2014, it granted several credit facilities to Stallion Nigeria Limited. The agreement allowed other companies in the Stallion Group to use these credit facilities based on the terms provided.

The bank said the defendants promised assets in Kano, Port Harcourt, and Lagos as security for the loans.

In an affidavit by Anthony Chilaka, the group head of Recovery and Remedial Management Department at UBA, it was mentioned that on 18 October 2023, Sunil Vaswani, the chairman of Stallion Group, provided a personal guarantee for these facilities.

Stallion Motors received a contract from the Federal Government in 2014 to supply 700 Ashok Leyland trucks and 50 Falcon buses for military use. According to the agreement, payments from the government were supposed to go into Stallion’s account with UBA.

After delivering the vehicles, Stallion Motors reportedly asked the government to send the first payment of $50 million to its Dubai account. Instead, they received N8.2 billion in an offshore account, which was against the initial agreement.

UBA stated that the defendants failed to pay their debts, which total N156 billion.

Following an order from the Federal High Court in Lagos, UBA took control of Stallion Group's assets in November 2023. This included properties in Lagos, Kano, and Port Harcourt as part of the debt recovery effort.

The assets included mortgaged property described as “all that piece or parcel of land together with any building thereon” at Plot 371, Trans Amadi Industrial Layout, Port Harcourt, Rivers State.

The properties also included Plot 353, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, Plot 370, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, KM17, Lagos-Badagry Expressway, Lagos State, and No. 54, Challawa Industrial Estate, Kano State, Nigeria.