A Lagos State High Court has granted interim preservative orders, including a Mareva injunction, in favour of United Bank for Africa (UBA) Plc in a dispute involving the alleged diversion of petroleum products valued at $242 million.
The orders, granted last Thursday by Justice K. A. Jose, followed allegations by UBA that Vitol SA, a Switzerland-based energy trading company, wrongfully released cargoes of petroleum products consigned to the bank in the bills of lading.
UBA’s lead counsel, Bode Olanipekun, SAN, urged the court to grant the interim orders to preserve assets and prevent the dissipation of funds pending the determination of the substantive dispute.
In her ruling, Justice Jose granted three of the prayers sought by the bank, including requests to restrain dealings with assets and funds up to the disputed amount.
“Prayers 1–3 are granted as prayed against the 2nd Respondent only,” the judge ruled.
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.
In the substantive proceedings, UBA is seeking to establish the liability of Vitol SA and the owners of the vessels over alleged conversion, misrepresentation and negligence arising from the non-delivery of the petroleum products.
The bank also cited 34 financial institutions and public agencies, including commercial banks, merchant banks, microfinance banks, the Nigerian Ports Authority and the Nigeria Customs Service, in connection with the application.
In an affidavit supporting the application, UBA’s Group Head of Recoveries and Remedial Management, Anthony Chilaka, stated that the bank had issued a letter of credit in favour of Vitol SA to facilitate petroleum products transactions.
According to the affidavit, the cargoes were transported to Nigeria, and the masters of the vessels issued several bills of lading.
UBA alleged that Vitol subsequently endorsed the bills of lading “to the order of” the bank and handed over the original documents to it.
The bank maintained that the endorsement entitled it to take possession of the cargoes upon completion of the voyages.
However, Chilaka stated that UBA had not received the gasoil despite the completion of the voyages.
“The applicant has not been given possession of the gasoil despite completion of the voyage,” the affidavit stated.
UBA alleged that the cargoes were instead diverted for the use of another party, arguing that the failure to deliver the products amounted to conversion and negligence.
The bank further contended that the respondents had obligations arising from the transactions and the endorsement of the shipping documents but failed to fulfil them.
UBA also alleged that cargoes linked to the transactions were diverted to other parties after the completion of their voyages rather than delivered to the bank as stipulated in the shipping documents.
The allegations are expected to be determined in the substantive proceedings.