The Federal High Court in Lagos has upheld the appointment of a receiver/manager by United Bank for Africa Plc to recover debts allegedly owed by Stallion Group, affirming the bank’s right to take possession of properties pledged as security for the facilities.
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Justice Daniel Osiagor, in a judgment delivered on Friday, held that the defendants did not dispute that they were indebted to UBA, but rather challenged the amount claimed by the bank.
The court consequently upheld the validity of the mortgage arrangements, affirmed the liability of the guarantors and restrained the defendants from diverting payments due to them from government agencies.
The judgment marks a major development in the long-running debt recovery dispute between UBA and Stallion Group, owned by the Vaswani brothers, which began in 2023 after the bank commenced proceedings over an alleged indebtedness of about ₦156 billion.
In resolving the issues placed before it, Justice Osiagor held that the reconciliation of accounts between the bank and the defendants did not extinguish the underlying debt or deprive UBA of its right to enforce the securities created in its favour.
The court also upheld the appointment of Romeo Ese as receiver/manager, affirming his authority to take possession of the mortgaged properties and seek protective orders necessary to preserve the assets pending recovery of the outstanding obligations.
Justice Osiagor further dismissed an objection by Barbedos, the 12th defendant, which had challenged the mortgage arrangements on the ground that its consent ought to have been obtained.
The court held that Barbedos failed to establish any proprietary interest in the mortgaged property and therefore had no legal basis to insist that its consent was required before the mortgage was created.
The issue of jurisdiction was also resolved in favour of UBA, with the court holding that it had the competence to entertain the bank’s claims.
In another key part of the judgment, the court restrained the defendants from diverting receivables accruing to them from government agencies, effectively preventing the funds from being redirected in a manner that could frustrate UBA’s debt recovery efforts.
All the issues submitted to the court for determination were resolved in favour of the bank, with the reliefs sought by UBA granted.
The dispute dates back to October 2023, when UBA obtained interim orders from the Federal High Court to enforce its security over assets belonging to Stallion Nigeria Limited and several of its subsidiaries.
The properties affected by the earlier orders included industrial and commercial assets located in Lagos, Port Harcourt and Kano.
UBA had alleged that Stallion Group owed approximately ₦156.03 billion, leading to litigation involving several companies within the conglomerate as well as individuals and entities said to have guaranteed the facilities.
Stallion Group, however, disputed UBA’s account of the controversy in November 2023, maintaining that it had made substantial repayments and that discussions were ongoing concerning reconciliation of the accounts and possible restructuring of the obligations.
The proceedings subsequently became entangled in procedural disputes, including a request by counsel representing some of the defendants that the matter be transferred from the court of Justice Akintayo Aluko, who had handled earlier applications in the case.
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