Insolvency Lawyers as Endangered Species

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Stakeholders see the petition by Seplat Petroleum Development Company to the Legal Practitioners Privileges Committee and the Legal Practitioners Disciplinary Committee of the Nigerian Bar Association against an insolvency lawyer, Adekunle Ogunba, as the usual ploy by debtors to intimidate insolvency practitioners in the course of plying their trade, Oluchi Chibuzor writes

For many lawyers in insolvency practice, these are interesting times. For them, the recent petition by Seplat Petroleum Development Company to the Legal Practitioners Privileges Committee (LPPC) and the Legal Practitioners Disciplinary Committee (LPDC) of the Nigerian Bar Association (NBA) is a cause for concern.

This group of legal practitioners who used to practice their trade recovering debts for organisations without fear, have now become endangered from harassments, intimidation and blackmail.
This is why the lawyer to Access Bank Plc, Mr. Adekunle Ogunba (SAN), is raising the alarm and accusing the oil company of embarking on intimidation over the discharge of his professional duties to the bank.

Ogunba who had first been sanctioned in 2018 by the LPPC and LPDC despite the fact that he was cleared of any wrongdoing, and subsequently pardoned, dismissed the petition as a blackmail aimed at intimidating him to back off his practice.

Trouble started when Access Bank sought the services of Ogunba law firm, Kunle Ogunba & Associates as the counsel/receiver/manager to recover the loan obtained by Cardinal Drilling Services Limited, from Diamond Bank (now Access Bank) on behalf of Seplat Petroleum Development Company.

After thoroughly studying the brief, Ogunba proceeded to file a suit at the Federal High Court against Seplat, Cardinal Drilling Services Ltd, Mr. Ambrose Orjiako and Kalu Nwosu and on December 24, 2020, Justice Rilwan Aikawa gave an order sealing the office complex of Seplat and freezing its accounts. Dissatisfied, the oil company filed an appeal at the Lagos Division of the Court of Appeal which penultimate Friday, upturned the order.

Last week, Access Bank Plc said it had filed a notice of appeal at the Supreme Court to challenge the Appeal Court, which to many legal pundits, is the way to go.
But soon after, rumours started making the rounds that Seplat had petitioned the LPPC and NBA. It asked the LPPC and LPDC to immediately commence disciplinary measures against the SAN for gross professional misconducts and breach of Rules 1, 15, 24, 30 and 32 of the Rules of Professional Conduct 2007.

Among others, Seplat alleged that whereas the loan deal was strictly between Access Bank and Cardinal Drilling, “Adekunle Ogunba filed a knowingly baseless insolvency action against Seplat as 1st defendant in contravention of a long settled legal principle, in order to harass Seplat, cause embarrassment to Seplat and damage its reputation and goodwill”.

It accused Ogunba of instructing the invasion of No. 16A Temple Road, Ikoyi Lagos, housing its corporate offices, and urged the LPPC to “immediately commence disciplinary action against the senior lawyer over steps and actions it said it considered “unbecoming of a legal practitioner of his standing and constitute a danger of bringing disrepute to the legal profession”

The oil firm alleged that having locked up its corporate office in a commando style, “the agents of Adekunle Ogunba served certain court processes on Seplat containing an Originating Summons, a Motion on Notice and interim ex parte Order in suit No FHC/L/CS/1588/2020”.

It also accused Ogunba of obtaining the said ex parte orders with “patently false” claims, adding that he deliberately misled the court and failed to adduce any documents to support the claims.
“This information is patently false. In support of the affidavit, a deed of debenture, an offer letter of banking facility and a personal guarantee were exhibited to the affidavit.

“None of these documents had Seplat as a party, nor bore its signature or corporate seal. There was no documentary information exhibited to the affidavit sustaining that Seplat used Cardinal Drilling as a ‘vehicle’, ‘smokescreen’, ‘decoy’, or ‘shell company’”, Seplat noted.

But Ogunba who claimed he had not seen a copy of the petition, when THISDAY sought his reaction, accused Seplat of embarking on blackmail and intimidation over his discharge of his professional duties to the bank.

At the time, the senior lawyer, said there was no official communication that he had been dragged to the Legal Practitioners Privileges Committee (LPPC) and the Legal Practitioners Disciplinary Committee (LPDC) of the NBA for alleged gross misconduct and unethical practices by the indigenous oil company.

Ogunba posited that the so-called petition against him, if it exists at all, was meant to create all kinds of roadblocks which would delay the payment of the debt the oil firm owes Acesss Bank Plc. He advised the oil company that rather than embarking on a wild goose chase, it should indeed begin the process of liquidating its huge financial obligation to the bank.

Insisting that the attempted blackmail and intimidation will not work, the senior lawyer noted that he was merely discharging his duties to his client in the court case between the two companies. He accused Seplat of the premeditated decision, noting that while the oil firm dated its petition December 14, 2020, and was received at the LPDC on December 18, 2020, Justice Aikawa gave his ruling on December 24, 2020.

“It is obvious that the petition (if any) is an attempt to blackmail me and avoid the payment of huge indebtedness of Seplat to Access Bank Plc and nothing more. Seplat is better advised to take steps to liquidate its debt rather than attempt to intimidate me, a lawyer merely doing my duties as such. Once again, I reiterate the fact that the petition has not been formally brought to my attention for a formal reaction,” he stated.

He expressed surprise that he was being targeted by the oil firm rather than facing the issues at stake, asking Seplat to focus on the substance of the case, rather than attempting to hound him.

“It is stock in trade of these huge debtors to peddle petitions all around in a bid to avoid the payment of their debts. I was not there when they borrowed the funds and they have obviously targeted my person for the nuisance value rather than take steps to liquidate the debt. This particular debt was part of the huge debt overhang that sunk the defunct Diamond Bank and they don’t mind if Access Bank goes under for their sake too,” he noted.

But contrary to Seplat’s claim that there was no evidence to show that Seplat benefitted from the loan obtained by Cardinal Drilling, documents obtained from the court revealed that the processes filed by Access Bank showed that the plaintiff provided proof of Seplat benefitted from the loan. It was gathered that after Cardinal Drilling obtained the loan and disbursed it, the company passed the obligation on to Seplat.

According to the documents, Seplat used its subsidiary firm, Cardinal Drilling to obtain the loan from Access Bank, adding that it utilised the loan obtained by Cardinal Drilling from the bank.
For instance, the bank revealed that when Cardinal Drilling got the $30million, in less than 24 hours, it transferred the money to Seplat, adding that each time Cardinal Drilling was trying to pay the loan, Seplat would have to transfer funds to it for onward transfer to the bank.

Even the company’s statement of account exhibited in court showed movement of monies and whose accounts were debited and credited. Sources close to the bank further disclosed that Seplat is paying back the money to the bank by proxy.

“I really don’t know what Seplat is saying. They don’t know that everything is now electronic and that people can see movement of funds from every account electronically. The bank has details of Seplat transferring funds into Cardinal Drilling’s account, which in turn would transfer same to Diamond Bank (Access Bank) as loan repayment.

“Seplat is the real debtor, which was why the bank and its lawyers joined Seplat in the debt recovery suit and obtained and executed the order against it, which is now a subject of appeal,” a source in the bank told THISDAY.
The source added that instead of Seplat to repay the loan, it had resorted to tarnishing the image of Ogunba by writing a petition against him that is in itself questionable.

These revelations may have given Ogunba the courage to insist that he acted based on a ruling by Justice Aikawa, who, despite objections by Seplat’s lawyers, granted his application.
The judge, among others, held: “In my view, all these issues touch the substance of the case and should therefore be reserved for substantive trial.

“An attempt to delve into any of them at this stage has the potential and danger of determining substantive issues at this interlocutory stage, a tendency which has been frowned upon by the appellate courts.
“There is no evidence of suppression of any material facts by the plaintiff in this application.”

THISDAY checks also revealed that Seplat’s petition against Ogunba was submitted on December 18, 2020, before the ruling on its application to discharge the order made Justice Aikawa delivered his ruling on December 24, 2020.

Seplat’s petition also reminds one of a similar one against Ogunba when he helped Ecobank to recover its loan to Honeywell Group in 2017. The action led to the stripping of the senior lawyer’s SAN rank by the LPPC in January 2018 sequel to a petition by Honeywell Group.

Honeywell accused him of instituting “multiplicity of proceedings before different judges of the Federal High Court on the same subject-matter with the deliberate aim of abusing the processes of court and derailing the course of justice”
Judicial watchers see this attempt as a ploy to blackmail Ogunba over an earlier petition written by Honeywell Group, which led to the LPPC stripping him of his SAN rank and later restoring it.

But what those behind the report ignored was the fact that the lawyer was cleared of any wrongdoing and that Honeywell also lost to Ogunba at the Appeal Court in the cases that formed the basis of the petition.

Besides, even before the LPPC restored Ogunba’s rank, the NBA had cleared him of any wrongdoing, dismissing Honeywell’s petition for not disclosing any prima facie case of professional misconduct against the senior lawyer.

Observers are worried that insolvency lawyers are being blackmailed with petitions over issues that should be subjects of appeal. They also see it as the tactics of powerful debtors who would rather intimidate lawyers for doing their jobs instead of paying back the huge loans they undeniably took from banks.

Such debtors, observers said, are a menace to the economy and should be made to face the consequences of their actions. To them, the LPPC and NBA LPDC ought not to give such frivolous petitions any consideration.