UBA wins N156bn debt recovery suit against Stallion Group, Vaswani brothers

The Federal High Court in Ikoyi, Lagos, has resolved all issues in favour of United Bank for Africa (UBA) Plc. in its suit to recover money it says is owed by Stallion Group, granting every relief the bank sought.

Justice Daniel Osiagor upheld the appointment of Romeo Ese Michael as receiver-manager, affirmed his right to take possession of the mortgaged property, and held that he is entitled to seek protective orders.

The court also held the guarantors liable and restrained the defendants from diverting receivables due to them from government agencies.

The court held that the defendants did not deny owing the bank, but disputed the amount. It also ruled that a reconciliation of accounts did not wipe out the indebtedness.

UBA filed the suit in October 2023, claiming N156.03 billion. Stallion has described the claim as entirely false.

Justice Osiagor dismissed the objection of the 12th defendant, Barbedos Ventures Limited, holding that it failed to establish any proprietary right over the mortgaged property.

Its consent was therefore not required for the creation of the mortgage.

The case began when Justice Akintayo Aluko granted UBA orders to take over the assets of Stallion Nigeria Ltd. and its affiliates in Lagos, Port Harcourt and Kano, and to freeze their accounts across Nigerian banks. Stallion’s attempt to lift those orders failed in December 2023.

The defendants include Von Automobile Nigeria, Stallion Motors, The Honda Place and director Sunil Vaswani.

The ruling reinforces a principle Nigerian lenders rely on: a dispute over how much is owed does not, by itself, stop a creditor from enforcing its security.

It also underscores the validity of properly constituted security arrangements and the authority of duly appointed receivers. UBA is using the same receiver to pursue N61.45 billion linked to Western Metal Products Co.

The court affirmed its jurisdiction to hear the case. The defendants did not dispute their indebtedness, only the amount, while the receiver-manager’s appointment was upheld as valid. His right to take possession of the mortgaged property was affirmed, along with his entitlement to seek protective orders.

Other highlights of the court decision were that the reconciliation exercise did not negate the indebtedness; and the 12th defendant’s objection was dismissed for want of proprietary rights, so its consent was not required for the mortgage.

The defendants were also restrained from diverting receivables from government agencies.