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Court Orders Sale of Obat Oil Hotel To Pay ₦5 Billion Debt

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A hotel owned by Obat Oil and Petroleum Limited was on Thursday approved for sale by the High Court of the Federal Capital Territory in Jabi, Abuja. The decision was reached by the court to offset a ₦5 billion debt owed Ecobank Plc.

The presiding judge, Hassan Babangida passed the judgment in a lawsuit in which Ecobank was the plaintiff.

The name of the hotel is Febson Hotels & Malls, and is located at Plot 2425, Herbert Macaulay Way, Abuja..

Obat Oil is owned by Oba Fedrick Akinruntan, an Ondo State monarch. He was ranked Nigeria’s richest royal figure by Forbes in 2014.

Ecobank filed an application on October 18, 2019, seeking the court’s grant authority to sell the property in order for it to recover its ₦5 billion debt

Ecobank through the application filed on October 18, 2019, sought the court’s consent to sell the hotel in order to recover the N5billion owed it by Obat Oil.

It claimed that it had reached an agreement with Obat Oil to sell the hotel to offset the company’s N5 billion debt, adding that the agreement was adopted by the High Court of Lagos State as a consent judgment delivered on March 15, 2017.

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The bank, through its lawyer, Mr. Kunle Ogunba (SAN), stated that Obat Oil, in a November 16, 2019 letter, notified the bank that it had gotten a buyer for the property and would through its sale offset the debt.

It added that the company did not uphold its promise to have the hotel sold and pay the N5bn debt on or before December 31, 2019.

Obat Oil’s lawyer, Mr Olalekan Ojo (SAN), did not deny his client’s N5billion indebtedness 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 N5bn judgment.Delivering judgment yesterday, the judge held that Ecobank had the locus standi (legal right) to enforce the Lagos State High Court judgment.

Justice Babangida ruled that there was nothing placed before the court to show that the alleged transfer of the bank’s right in the N5billion to ETI was complete.

He 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 N5billion should be paid.

“The judgment sum has not been paid till today and it was agreed by the parties that the property in question, Febson Hotels & Malls, should be sold in satisfaction of the judgment sum,” the judge added.

Granting the bank’s application, 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 yesterday.

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 Ecoban’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.

In another grounds of appeal, Obat Oil argued that the trial 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 judgment 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.

About Author

Victor Okeh is a graduate of Economics from Lagos State University. He is versatile in reporting business and economy, politics and finance, and entrepreneurship articles. He can be reached via – [email protected]

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