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UBA Intensifies Debt Recovery Drive, Begins Contempt Proceedings Against WEMPCO Directors
UBA Intensifies Debt Recovery Drive, Begins Contempt Proceedings Against WEMPCO Directors
Federal High Court grants UBA permission to serve Form 49 on nine WEMPCO directors over alleged disobedience of an existing court order, paving the way for contempt proceedings.
Contempt action stems from UBA’s N61.45 billion debt claim against WEMPCO, over which the court had earlier granted a Mareva injunction and appointed a Receiver/Manager over some assets.
In a separate $242 million petroleum products dispute, Lagos High Court grants interim preservative orders against Switzerland-based energy trader Vitol SA following allegations of wrongful release and diversion of cargoes.
UBA alleges petroleum products covered by bills of lading endorsed to its order were not delivered to the bank; both cases remain before the courts and the allegations have not been finally determined.
October 23, () – United Bank for Africa (UBA) Plc has intensified separate legal actions over disputed commercial transactions, commencing contempt proceedings against directors of WEMPCO over alleged disobedience of a Federal High Court order and securing interim preservative orders against Switzerland-based energy trader Vitol SA in a separate petroleum products dispute.
The two cases, though unrelated, form part of legal efforts by the bank to protect and recover assets running into billions of naira and hundreds of millions of dollars.
In the WEMPCO matter, the Federal High Court, presided over by Justice Aluko, granted UBA’s application for substituted service of Form 49 on nine directors of the company named as alleged contemnors.
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They are Lewis Shui Ngor Tung, Phillip Shui Chei Tung, M.A. Ola Yusuf, Tung Lawrence Blake, Aali Aare Hadji Tokunbo, Paul Shui Po Tung, Tung Robert, C.L. Ip and Taiwo Alli.
The application is part of proceedings seeking to determine whether the directors disobeyed an existing order of the court and whether they should be committed to prison for contempt.
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Counsel to UBA argued that serving Form 49 on the directors was necessary to bring them formally before the court to show cause why an order of committal should not be made against them.
The bank further alleged that some WEMPCO directors and members of staff took steps aimed at frustrating or disobeying the court’s order.
Form 49 is a formal notice requiring a person accused of disobeying a court order to show cause why an order for committal should not be made against them.
The Federal High Court had earlier granted a Mareva injunction and appointed a Receiver/Manager over some WEMPCO assets following claims by UBA that the company was indebted to it to the tune of N61,445,695,993.76.
The latest order therefore clears a procedural hurdle for the contempt proceedings to continue against the named directors.
$242m Petroleum Products Dispute
In a separate case, UBA has also secured interim preservative orders from the Lagos State High Court in a dispute involving Vitol SA and four shipping companies over the alleged wrongful release of petroleum products valued at about $242 million.
UBA alleged that petroleum cargoes covered by bills of lading made to its order were released or diverted without being delivered to the bank.
The interim application was argued by Bode Olanipekun, SAN, lead counsel to UBA, who asked the court to preserve assets pending determination of the substantive dispute.
Justice K.A. Jose granted three prayers in the bank’s application, with the orders applying to Vitol SA.
“Prayers 1–3 are granted as prayed against the 2nd Respondent only,” the judge ruled.
The orders include restrictions against dissipation of assets and dealings with funds up to the amount in dispute.
The application was brought pursuant to Order 43 Rule 1 of the High Court of Lagos State (Civil Procedure) Rules 2019 and the Lagos State High Court Practice Direction No. 2 of 2019.
UBA’s substantive claims centre on allegations of conversion, misrepresentation and negligence arising from the alleged non-delivery of petroleum products.
According to an affidavit filed in support of the application by UBA’s Group Head of Recoveries and Remedial Management, Anthony Chilaka, the bank issued a letter of credit for the benefit of Vitol to facilitate petroleum products transactions.
The bank alleged that after the products were transported to Nigeria, the masters of the vessels issued bills of lading which Vitol subsequently endorsed “to the order of” UBA before the original documents were handed to the bank.
UBA contends that the endorsement entitled it to take possession of the petroleum products upon completion of the voyages.
Chilaka, however, told the court that the bank did not receive the gasoil.
“The applicant has not been given possession of the gasoil despite completion of the voyage,” the affidavit stated.
UBA alleged that the products were instead applied to the use of another party, arguing that the alleged failure to deliver the cargo amounted to conversion and negligence.
It further alleged that cargoes connected with other transactions were similarly diverted to third parties after their voyages rather than delivered in accordance with the shipping documents.
The bank also cited 34 financial institutions and public agencies, including commercial and merchant banks, microfinance banks, the Nigerian Ports Authority and Nigeria Customs Service, in connection with its application.
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