UBA Wins N156bn Debt Recovery Suit Against Vaswani Brothers, Stallion Group

By Modupe Gbadeyanka

Justice Daniel Osiago of the Federal High Court in Ikoyi, Lagos, has delivered a judgment in favour of the United Bank for Africa (UBA) Plc over the Vaswani Brothers and Stallion Group.

The judge confirmed Romeo Ese Michael as receiver-manager, with the right to take possession of the mortgaged property and seek protective orders.

For about three years, the Nigerian bank has been in court to recover about N156 billion debt owed by Stallion Group.

In the judgment, the court also barred the defendants from diverting payments owed to them by government agencies, thereby reinforcing the bank’s ability to protect its recovery interests.

The court held that the defendants did not dispute owing money, only the amount, and that a reconciliation of accounts did not cancel the debt.

It also dismissed objections raised by the 12th Defendant (Barbedos Ventures Limited), holding that it failed to establish any proprietary rights over the mortgaged property. Consequently, its consent was not required for the creation of the mortgage, and its objections were rejected.

When UBA filed the suit in October 2023, it claimed N156.03 billion as being owed.  Stallion has called the claim “entirely false”; however, the court’s written judgment and Stallion’s response to the ruling were not immediately available.

The case began when Justice Akintayo Aluko granted UBA orders to take over assets of Stallion Nigeria Ltd. and its affiliates in Lagos, Port Harcourt and Kano, and to freeze their funds across Nigerian banks. Stallion’s attempts 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 strengthens a principle Nigerian lenders rely on: arguing over how much is owed does not by itself stop a creditor from enforcing its security. UBA is using the same receiver to pursue N61.45 billion linked to Western Metal Products Co.

The decision represents a comprehensive victory for UBA, with the Court resolving all issues in the Bank’s favour and granting all the reliefs sought.

The ruling is particularly significant for the enforcement of creditors’ rights in Nigeria, underscoring the legal validity of properly constituted security arrangements and the authority of duly appointed receivers to enforce creditors’ interests.

The judgment marks a major milestone in UBA’s efforts to recover its exposure to Stallion Group and safeguard the interests of the Bank and its stakeholders.

The key highlights of the judgment are as follows:

The Federal High Court Ikoyi affirmed its jurisdiction to hear the case.

The Judgement was delivered by Justice Daniel Osiagor of Court 6 of Federal High Court, Ikoyi, Lagos

The Defendants did not dispute their indebtedness, only the amount owed.

The guarantors were held liable.

The appointment of the Receiver/Manager was upheld as valid.

The Receiver/Manager’s right to take possession of the mortgaged property was affirmed.

The Receiver/Manager was held to be entitled to seek protective orders.

The Court held that the reconciliation exercise did not negate the indebtedness.

The objection of the 12th Defendant was dismissed, as it failed to establish any proprietary rights over the mortgaged property. Its consent was therefore not required for the mortgage.