$20m judgment debt: Court adjourns winding-up suit to Feb.14

Justice Akintayo Aluko of the Federal High Court, Lagos has adjourned the wind-up proceedings against Eroton Exploration & Production Company to February 14, 2025 for definite hearing.
The suit, filed by Brightwaters Energy, claimed that Eroton failed to pay a consent judgment debt of $20 million.

In the action, Guaranty Trust Bank (GTB) also filed a notice that it wants to join the proceedings and that its prayer is to stay the action because Eroton also owes it N250 billion.

The bank said that it is a secured creditor.

Responding to the GTB application, the Plaintiff’s counsel, Olumide Aju (SAN), argued that the fact that a secured creditor has a charge over the assets of the company does not allow that creditor to stay in proceedings.

This, he said, is because priority of creditors will eventually be determined by the liquidator once appointed.

He also raised concerns about GTB’s claim, questioning how the bank could substantiate such a large debt, particularly since it exceeds the banks single obligor limit as of 2018 when it purportedly granted Eroton the alleged loan.

Mr Aju contended that the alleged loan is in fact the required capital of a whole bank in Nigeria of today.

But the bank’s lawyer, Mr Adeola Kembi, requested an adjournment to present further evidence ahead of the next hearing.

Brightwaters Energy’s petition, filed on March 21, 2023, in suit marked FHC/L/C8/491/2022, is seeking an order to wind up Eroton on the grounds of insolvency and failure to pay the $20 million judgment debt.

The petition also said that a 21-day statutory demand notice, as required under Section 572(1) of the Companies and Allied Matters Act 2020, has expired without payment.
The petition claimed that Eroton has insufficient assets to meet its liabilities and has failed to settle the admitted debt, which was agreed upon through a Terms of Settlement and confirmed in a consent judgment delivered over a year ago.

Eroton, in its defence, filed a preliminary objection on May 3, 2023, arguing that the court lacked jurisdiction to hear the petition.

Specifically, the company contended that the filing of a verifying affidavit along with the petition has deprived the court of jurisdiction.

In a counter-affidavit, the Plaintiff’s counsel, Ernest Ugwu, argued that the winding-up proceedings were initiated based on Eroton’s uncontested indebtedness.
He also stated that the consent judgment, adopted by the Lagos High Court in the earlier case Brightwaters Energy Limited v. Energy Link Infrastructure (Malta) Limited and Eroton Exploration and Production Company Limited (Suit No: LD/4344CM/2022), remains final and has not been overturned.

Ugwu further explained that the Plaintiff is not involved in any commercial agreements between GTB and Eroton.

In an earlier ruling delivered on August 7, 2024, the court dismissed Eroton’s objection and granted the Plaintiff’s application to advertise the petition.
The case will resume on February 14, 2025.