Fraudulent Mareva Injunction – Multibillion Lawsuit may be pending against Ecobank Nigeria Plc
Vigeo Limited may soon be filing a multibillion Naira lawsuit at the Federal High Court against Ecobank Nigeria Plc for fraudulently obtaining a Mareva Injunction against the shipping and oil services giant.
Ecobank had in 2017 secured a dubious Mareva Injunction that allowed it freeze the assets of Vigeo Limited and 16 of its sister companies , using largely false claims and submissions in an Ex Parte motion.
It however took Vigeo four years to overturn the verdict with a 2021 Appeal Court Judgment. Vigeo Limited suffered tremendous damage to its reputation plus financial losses over the period the judgment order lasted, which industry sources have conservatively estimated at over N17 billion.
The judgment against Vigeo Limited was upturned as the Court of Appeal in Lagos set aside a December 4, 2017 ruling obtained by Ecobank Nigeria Limited at the Federal High Court in Lagos against Vigeo Limited and its chairman Mr. Victor Osibodu in a dispute over alleged debt.
A three-man panel of the Appeal Court discharged a Mareva Injunction Ecobank Nigeria Plc obtained at the lower court on July 11, 2017 against Vigeo and Osibodu.
The said Mareva Injunction secured by Ecobank, had purported to operate to stop Vigeo from disposing of or dissipating their assets pending the determination of the
case or pending payment to Ecobank (as Plaintiff). The injunction had restrained Vigeo and Osibodu from operating the firm’s accounts.
By lifting the order, the Appellate court upheld Vigeo and Osibodu argument as canvassed by their counsel M. Kuti that the Mareva Injunction shouldn’t have been granted in the first place. It further remitted the substantive suit to the Federal High
Court Chief Judge for re- assignment to another judge for determination.
Vigeo and Osibodu were the Appellants in the suit marked CA/L/1472/2017 while Ecobank Nigeria Plc was the Respondent. The Appellants were represented by M. Kuti while O. Akinosun SAN represented the Respondent.
Justice Joseph Ikyegh delivered the court’s lead ruling on Monday March, 22, 2021, after reading the Record of Appeal and the Appellant’s Brief of Argument filed on behalf of the
Appellants. The judge upheld Vigeo and Osibodu’s argument as canvassed by Kuti.
Justice Ikyegh held: “It is hereby ordered as follows that, the Appeal having been conceded by the Respondent is allowed on the brief filed by the Appellants. The ruling of the court below delivered on 4/12/2017 is hereby set aside and the Mareva Injunction granted by the court below on 07/11/2017 is discharged.
The action is remitted to the Chief Judge of the court below for reassignment to another judge for determination. Parties to bear their costs,” the Judge ruled. Justice Saliu Said of the Federal High Court in Lagos had on November 7, 2017, granted orders of Mareva injunction against Vigeo Limited and its Chairman restraining the company from operating its accounts on the basis of an ex parte application (with no notice to Vigeo Limited or no request to hear a counter argument from Vigeo Limited) filed by Ecobank Nigeria Plc in respect of an original loan facility between Vigeo Limited and the defunct Oceanic Bank Plc that was later acquired by Togo based Ecobank Transnational Incorporated.
It all started in 2007, when Vigeo Limited obtained a loan facility from the defunct Oceanic Bank International Plc to acquire an Anchor Handling Tug Supply (AHTS) Vessel, MV Vigeo Olufunke, to facilitate exploration and production activities in the nation’s deep water oil fields.
The vessel was acquired for charter as an oilfield support vessel to Shell Bonga Oil Field, a key player in the offshore exploration and production of petroleum. Subsequently, the Movement for the Emancipation of Niger Delta (MEND) attacked the offshore Bonga Oil field leading to the stoppage of oil production by Shell Petroleum. The MV Vigeo Olufunke was also badly damaged in the MEND attack.
Oceanic Bank had granted the facility to Vigeo Limited as an independent entity while its Chairman Mr. Victor Osibodu only guaranteed the loan. Findings showed that the repayment of the facility was to be from revenues generated through the vessel’s operation.
Subsequent to the grant of the facility, various factors hindered the optimal performance of the vessel. These include damages suffered by the vessel during the Bonga offshore oil platform attack in April/May 2008, as a result of which the vessel had to be taken to Europe for repairs.
The situation was compounded by the downturn in the economy, particularly, in the oil and gas industry by the collapse in oil prices from over US$100.00 to less than US$30.00 in the international market. These situations forced oil and gas companies to scale down their operation internationally and suspend new projects.
This further led to the non-renewal of the charter contract entered into by Vigeo Ltd for the vessel. Vigeo Limited consequently, met on several occasions with Ecobank in a bid
to restructure the facility and also to seek a moratorium”, the source said. In the interim, Vigeo Limited had to send its vessel to Europe for drydock repairs (which cost the company an estimated $5 million).
Despite the losses, Vigeo made several good faith payments to the Oceanic Bank/Ecobank Nigeria from its other income sources totaling about $14million out of the $17 million dollar loan. It is also supposed to have paid a sum in excess of N2 billion on the Naira element of the loan, a sum far in excess of the original Naira facility sum of N750million.
Conversely, Ecobank Nigeria Plc allegedly embarked on a succession of questionable conducts against Vigeo Limited and its Chairman. For instance, it was gathered that contrary to the terms of the facility agreement, Ecobank unilaterally converted
the United States Dollars portion of the facility (which was the more substantial part of the facility) into Naira in spite of the written objection of Vigeo Limited to the conversion of the facility into Naira.
This conversion of the US Dollar portion of the facility to Naira was allegedly done at the black market exchange rate of N430.00 to US$1.00, as against the legal, approved exchange rate of N304.00 to US$1.00 as per Central Bank of Nigeria rate further to its statutory powers.
By adopting this illegal conversion rate, Ecobank effectively increased the alleged indebtedness of Vigeo Limited by almost 50% (fifty per cent) overnight. Also without clearance or negotiation, the bank more than doubled the interest rate on the inflated loan from 11% per annum applicable to US Dollar facility to 25% per annum after the conversion to Naira.
Ecobank’s conversion of the facility from US Dollars to Naira in breach of the contractual terms and at the illegal and inflated black market conversion rate, together with the imposition of the excessive interest rate, fundamentally breached the facility agreement and made it impracticable to manage the facility as reconstituted, it was learnt.
Part of the security for the facilities was a charge on the shares in blue chip companies belonging to the Chairman of Vigeo Limited. Ecobank Nigeria Plc sold the shares without notice, without advice to, or knowledge of, the owner and without recourse to Vigeo Limited or its Chairman. The shares were sold at 60% of their current value as stated in the loan statement released one year after sale.
Despite the challenges faced by Vigeo Limited, the company was never evasive towards fulfilling its obligations, rather, it made frantic efforts to bring the bank to the table with the view of working out a realistic payment plan structure.
As has subsequently become evident with the victory of Vigeo Limited at the Appellate Court, the widespread longstanding belief is that Ecobank Nigeria Limited obtained the original Mareva Injunction order against several companies, by suppressing names of the account owners and misrepresenting material facts as to the true state of affairs between itself and Vigeo Limited.