The Supreme Court Friday, 20 February, finally delivered judgment in favour of the Asset Management Corporation of Nigeria (AMCON) following the protracted legal battle between Polaris Bank Limited, AMCON, 11 Hospitality Plc, and Milan Industries Limited over the sale of Lagos Continental Hotel.
The defunct Skye Bank Plc (now Polaris Bank Plc) advanced a credit facility to Milan Industries Limited for the construction of the Lagos Continental Hotel in Victoria Island, Lagos. The loan became non-performing, and AMCON acquired the Eligible Bank Asset (EBA) of Milan Industries Limited from Polaris Bank in September 2018.
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Prior to purchase of the loan, the Bank had appointed Kunle Ogunba SAN as Receiver/Manager over Milan Industries to recover the non-performing loan. As Receiver/Manager, Kunle Ogunba took over the Lagos Continental Hotel pursuant to the registered Deed of Legal Mortgage collateralizing the Hotel to the Bank and his Deed of Appointment.
Upon acquisition of the EBA, AMCON validated the appointment of Kunle Ogunba SAN as Receiver/Manager. Subsequently, AMCON disposed the Lagos Continental Hotel for the sum of N22 billion to 11 Hospitality Plc pursuant to the registered Deed of Legal Mortgage collateralizing the Hotel to the Bank/AMCON.
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Following the disposal of the collateral, Milan Industries Limited commenced Suit No. FHC/L/CS/1643/2020- Milan Industries Limited vs Polaris Bank Limited, Asset Management Corporation of Nigeria and 11 Plc wherein the obligor challenged the disposal of the collateral by AMCON.
The Federal High Court had dismissed the obligor’s suit at the time.
Dissatisfied with the judgment; Milan Industries commenced an appeal at the Court of Appeal vide CA/L/CV/476/2021: Milan Industries Limited vs Polaris Bank Ltd, AMCON & 11 Hospitality Plc. The matter over the years went through the Court of Appeal, which ruled in favour of Milan Industries Limited.
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The judgment of the Court of Appeal was appealed to the Supreme Court that finally ruled on the matter on 20 February 20, in favour of AMCON.
In setting aside the judgment of the Court of Appeal, the Supreme Court stated that the AMCON Act is a special law enacted by the National Assembly to tackle peculiar problems in the financial industry and interpretation should be done in accordance with special nature of the law. Hence the Supreme Court affirmed salient provisions of the Act; The Supreme Court upheld the provisions of Sections 60 of the AMCON, which exempts AMCON from paying stamp duties; The Supreme Court validated the rights of AMCON as a mortgagee irrespective of the up stamping of the document.
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The Supreme Court held that provided there was an outstanding debt, AMCON had a continuing security interest in the mortgaged assets. The Supreme Court upheld the sale of the Lagos Intercontinental Hotel thereby ensuring that the powers of AMCON to dispose mortgaged assets are protected.
It would be recalled that AMCON acquired the Lagos Continental Hotel (‘’Asset or Hotel”) as collateral for an eligible bank asset purchased from Sky Bank Plc (now Polaris Bank Limited) following the failure of Milan Industries Limited’s to repay their outstanding debt to the bank. With this development, the matter has been permanently laid to rest.
Signed
Jude Nwauzor, Head, Corporate Communications Department, AMCON
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