Court refuses firm’s application on $15b judgment debt

Federal High Court, Lagos has dismissed an application by Petro Union Oil and Gas Company to enforce a £2.550 billion judgment delivered on March 11, 2014 against Central Bank of Nigeria (CBN), Union Bank (UBN), Ministry of Finance, and Attorney General of the Federation jointly and severally.

This application by Petro Union and its officials sought to enforce the erstwhile judgment against Union Bank, although the defendants’ appeals are pending at the Supreme Court and the Court of Appeal respectively.

The trial of the firm and its directors at the Federal High Court is for alleged sundry offences, including fraud and forgery. Together with interest, the judgment, which the firm attempted to enforce, amounts to over $15 billion.

On June 18, 2021, Petro Union had approached the Federal High Court through a motion ex-parte seeking an order of interim injunction to restrain Union Bank from accepting, or offering for sale its assets, in any manner, pending the determination of the motion on notice filed in the suit and an order directing maintenance of status quo and suspension of all actions, proceedings and processes relating to the intended sale of Union Bank’s assets, pending the hearing and determination of the motion on notice already filed in the suit of which the court granted the motion ex-parte.

Upon being served the order ex-parte, Union Bank, through its counsel, filed an application to set aside the order and also filed other processes in opposition to the motion on notice filed by the firm, asking the court to make the interim order permanent.

Union Bank argued that a litigant could not prevent a shareholder of a company with which it is involved in litigation from selling its shares, and that such an action by a shareholder cannot be imputed to the company.

It was further argued that the judgment, which formed the basis of the suit, was obtained by fraud, as an appeal against the judgment is pending at the Supreme Court where an application for stay of execution is also pending, and that Petro Union and its directors were standing trial for fraud-related offences before the same court.

In its judgment, the trial judge, Osiagor, quoted paragraph 2 of the publication by Bloomberg which reads: “Bloomberg, which quoted sources familiar with the matter disclosed that Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond, has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria”, and held that the quoted paragraph shows that it is Atlas Mara Limited that has received offers for the sale of its shares in Union Bank.

The court further held that shares belonging to shareholders are not the same as the assets of a company; hence the court cannot prevent a shareholder from selling its shares.

The court also held that because of the appeal pending at the Supreme Court, it would not make any preservatory order on a matter, which is currently before the Supreme Court.

He went further to state that there was no threat to the res to necessitate a preservatory order of the court and so, dismissed the originating summons filed by Petro Union.