A Federal High Court sitting in 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 the Central Bank of Nigeria, Union Bank, the Ministry of Finance, and the Attorney-General of the Federation jointly and severally.
Justice Daniel Osiagor held that the Court cannot prevent a shareholder from selling its shares.
The application was brought by Petro Union and its officials seeking to enforce the erstwhile judgment against Union Bank even as the appeals of Union Bank, CBN and the Attorney-General of the Federation remained pending at the Supreme Court and the Court of Appeal respectively.
Also, the criminal trial of Petro Union and its directors at the Federal High Court for sundry criminal offences including fraud, forgery, and uttering was also ongoing.
Together with interest, the judgment which Petro Union attempted to enforce before their efforts were frustrated amounted to over $15 billion – which was almost half of Nigeria’s current foreign reserves.
Petro Union had on June 18, 2021, 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 lawyer, Olaniwun Ajayi, filed an application to set aside the Order Ex-Parte and also filed other processes in opposition to the Motion on Notice filed by Petro Union asking the Court to make the interim order permanent.
Union Bank argued that a litigant cannot 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 was pending at the Supreme Court where an application for stay of execution was also pending and that Petro Union and its directors were standing trial for fraud-related offences before the Federal high court.
In its judgment, the Federal High Court, presided over by Justice Daniel Osiagor, quoted paragraph 2 of the publication by Bloomberg which read: “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.”
The judge 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 is 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.
Justice Osiagor stated further that there was no threat to the ‘res’ to necessitate a preservatory order of the Court thus dismissing the Originating Summons filed by Petro Union.