Asset Management Corporation of Nigeria v. Suru Worldwide Ventures Nigeria Limited & Ors (2024)

LAWGLOBAL HUB Lead Judgment Report – SUPREME COURT

ADAMU JAURO, JSC (Delivering the leading judgment)

The appeal herein is against the judgment of the Court of Appeal, Lagos Judicial Division, delivered on 12th July, 2019 in appeal No. CA/L/88/2018, which allowed the 1st respondent’s appeal, set aside the judgment of the Federal High Court, Lagos Division and ordered that the appellant’s suit be tried de novo with the 1st respondent as a party.

Facts leading to this appeal

The 1st respondent was a customer of Oceanic Bank International Plc (Now Ecobank Limited) and by virtue of their banker-customer relationship, the 1st respondent applied for and was granted a number of credit facilities by the bank. The credit facilities were inter alia secured by Deeds of Legal Mortgagee in respect of some of the 1st respondent’s properties.

The 1st respondent did not repay the credit facilities as and when due and the facilities were later bought over by the appellant in performance of its statutory duty. The purchase of the facilities was evidenced by a Loan Purchase and Limited Servicing Agreement entered into between the appellant and Oceanic Bank.

Now the creditor in respect of the credit facilities granted to the 1st respondent by Oceanic Bank, the appellant as plaintiff took out an originating motion before the Federal High Court, Lagos Division, with the 2nd 4th respondents as well as the Commissioner of Police, Lagos State Command as defendants.

In the course of the proceedings, however, the appellant applied that the name of the Commissioner of Police, Lagos State Command, sued as the 2nd defendant, be struck out and the trial court duly obliged. The 1st respondent was not a party to the suit before the trial Federal High Court.

The following reliefs were sought in the originating motion which was brought pursuant to sections 390, 391 and 393(1) of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004; order 3 rule 1 of the Federal High Court (Civil Procedure) Rules, 2009 and under the inherent jurisdiction of the court:

“1. An order directing the defendants, jointly and severally, whether personally and/or through officers and men under their command and control, to assist the plaintiff, its officers, agents and representatives howsoever described, in exercising its rights as a legal mortgagee under the Deeds of Legal Mortgage registered as 32/32/2033, 88/88/2032 and 89/89/2028, respectively.

2. An order directing the defendants, jointly and severally, whether personally and/or through officers and men under their command and control, to assist the plaintiff, whether acting through its officers, agents and representatives howsoever described in maintaining peace, order and for the protection of its exclusive possessory rights and powers over the properties located at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A., Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos State pursuant to and in furtherance of the exercise and/or discharge of its powers, functions and duties as the Legal Mortgagee of the said properties.
3. And for such further or other orders as this honourable court may deem fit to make in the circumstances.”

The following were the grounds upon which the originating motion was brought as stated on the face thereof:

“i. By virtue of the banker/customer relationship that existed between Oceanic Bank International Plc (now Ecobank Limited) (“the bank”) and Suru Worldwide Ventures Nigeria Limited (“the debtor”), the latter applied for and was granted several credit facilities running into several billions of Naira.

ii. As part of the security requirements for the aforesaid credit facilities, the debtor executed several Deeds of Legal Mortgage including the Deeds of Legat Mortgage registered as 32/32/2033, 88/88/2032 and 89/89/2028 in respect of properties lying and situate at No. 86, Opebi Road, Ikeja, Lagos State, No. 12, Reverend Ogunbiyi Street, G.R.A. Ikeja, Lagos State and No. 12, Allen Avenue, Ikeja, Lagos Sate respectively.

iii. Due to the failure and refusal of the debtor to liquidate its indebtedness arising from the aforesaid credit facilities, which as at 1st January, 2011 stood at the sum of N15,341,050,642.21 (fifteen billion, three hundred and forty-one million, fifty thousand, six hundred and forty-two Naira, twenty-one Kobo), the credit facilities were classified as non-performing loans.

iv. In order to rescue the bank from imminent collapse due to its exposure to the debtor, the plaintiff acquired and took over the debtor’s indebtedness stated above, pursuant to its statutory mandate under the Asset Management Corporation of Nigeria Act, 2010 and the policy of the Federal Government of Nigeria thereto.