… Federal High Court, Ikoyi, upholds appointment of Receiver/Manager, affirms guarantors’ liability, restrains diversion of government receivables

United Bank for Africa (UBA) Plc has secured a major legal victory in its N156 billion debt recovery proceedings against the Vaswani brothers and Stallion Group, following a landmark judgment by the Federal High Court sitting in Ikoyi, Lagos.

The court, presided over by Justice Daniel Osiagor, on Friday granted the reliefs sought by the bank, upholding the appointment of a Receiver/Manager, affirming the enforceability of the mortgage security and confirming the liability of the guarantors in the dispute.

The judgment represents a significant development in UBA’s efforts to recover its outstanding exposure to Stallion Group and protect its interests in the underlying secured transactions.

In its ruling, the court observed that the defendants did not dispute the existence of their indebtedness to the bank but challenged the amount being claimed. It further held that the reconciliation of accounts between the parties did not extinguish or negate the underlying debt.

In a key affirmation of the bank’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 to safeguard the secured assets.

The court also dismissed objections raised by the 12th defendant, holding that it had failed to establish any proprietary interest in the mortgaged property. Consequently, the court ruled that the defendant’s consent was not required for the creation of the mortgage and rejected its objections.

Significantly, the judgment restrained the defendants from diverting receivables due to them from government agencies, reinforcing the bank’s ability to protect its recovery interests and prevent the diversion of funds that could otherwise be applied towards settling the outstanding obligations.

The court’s affirmation of the guarantors’ liability further strengthens UBA’s legal position in pursuing recovery of the debt, extending the implications of the judgment beyond the immediate dispute over the amount owed.

The decision is a comprehensive victory for UBA, with the court resolving the issues submitted for determination in the bank’s favour and granting the reliefs sought.

The ruling also carries broader implications for credit recovery and the enforcement of creditors’ rights in Nigeria. It underscores the importance of properly constituted security arrangements and reinforces the authority of duly appointed receivers to take lawful steps to protect creditors’ interests.

The judgment further affirms the principle that disagreements over the precise amount of an outstanding debt do not, in themselves, extinguish the underlying indebtedness or invalidate a creditor’s lawful enforcement rights.

For UBA, the ruling marks a major milestone in its ongoing efforts to recover its exposure to Stallion Group and safeguard the interests of the bank and its stakeholders.

It also reinforces the importance of enforceable guarantees, valid mortgage securities and effective recovery mechanisms in supporting confidence in Nigeria’s banking and credit system.