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ECOBANK vs OBAT OIL: Court Orders Sale of Hotel To offset N5 billion debt

A High Court of the Federal Capital Territory in Jabi, Abuja, had on Thursday, ordered the sale of an Abuja hotel owned by Obat Oil and Petroleums Limited in order offset N5 billion owed to Ecobank Plc.

According to Premium Times Newspapers, In October,2019, Ecobank had in an application sought the court’s authority to sell off the hotel to recover the N5 billion owed it by Obat Oil.

Febson Hotels & Malls, located at Plot 2425, Herbert Macaulay Way Abuja, was said to be owned by Obat Oil, and founded by Fedrick Akinruntan, oil mogul and popular monarch, the Olugbo of Ugbo Kingdom in Ilaje Local Government Area of Ondo State, who incidentally was ranked by Forbes magazine as the “second richest king in Africa and the richest in Nigeria, in 2014.”

The Bank through its lawyer, Kunle Ogunba(SAN), claimed that it had reached an agreement with Obat Oil to sell the hotel to offset the debt, adding that the agreement was adopted by the High Court of Lagos State as a consent judgment delivered on March 15, 2017.

The bank also added that Obat Oil, in a letter dated November 16, 2019, informed the bank that it had found a buyer for the hotel and would offset the debt with the proceeds of the sale, but the company reneged on its promise to have the hotel sold and pay the N5 billion debt “on or before December 31, 2019”.

The lawyer to Obat Oil Olalekan Ojo, did not deny the N5 billion indebtedness of his client, but maintained that Ecobank was no longer the creditor because the bank had in a letter dated April 5, 2017, allegedly assigned its rights and interests in the case to a third party, ETI Specialised Finance Company Limited. He said this implied that only ETI Specialised Finance Company Limited could assert any right over the N5 billion judgment.

Justice Hassan Babangida, while delivering judgment on Thursday, noted that although the bank in its April 5, 2017 letter stated that ETI would act on its behalf, there was no evidence showing that ETI complied with the condition in the letter requiring it to give the debtor the bank account into which the N5 billion should be paid.

Mr. Babangida ordered: “The court hereby orders the issuance of a writ for the attachment and for sale of the property known as Febson Hotels & Malls and the sum of N5 billion to be realised from the sale should be paid to the applicant.”

Meanwhile, Obat Oil immediately appealed against the judgment and filed an application for stay of execution of the judgment, on Thursday.

Mr Ojo, the company’s lawyer, filed two grounds notice of appeal at the Court of Appeal in Abuja, contending that the trial judge “erred in law” by not declining jurisdiction to entertain and grant Ecobank’s motion on notice dated October 18, 2019.

The lawyer argued that the court ought to decline jurisdiction because the judgment debt sought to be enforced by Ecobank had been assigned to ETI Specialised Finance Company.

Obat Oil also argued that the judge erred in law because he relied on the reply affidavit filed by the judgment creditor on November 5, 2019 “after the judgment creditor had started its address in respect of the motion on notice filed on October 1, 2019 without obtaining the leave of the trial court to file the said reply affidavit”.

The firm argued that the judge arrived at a decision that occasioned “grave miscarriage of justice” by relying on such reply affidavit.

In its motion for stay of execution of the judgment, which it filed before the same trial judge at the FCT High Court, Jabi, on Thursday, Obat Oil sought an order of injunction and stay of execution “restraining Ecobank from enforcing it pending the determination of its appeal against the said judgment.”

Culled from: https://www.premiumtimesng.com/news/top-news/435422-court-orders-sale-of-obat-oils-hotel-to-offset-n5-billion-debt.html

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