A Lagos State High Court has granted interim preservative orders against Switzerland-based energy trading company Vitol SA following allegations by United Bank for Africa Plc (UBA) that petroleum cargoes valued at $242 million were diverted instead of being delivered to the bank.
The orders, granted last Thursday by Justice K. A. Jose, followed an application by UBA seeking to prevent the dissipation of assets and dealings in funds up to the disputed amount pending the determination of the underlying dispute.
The bank is accusing Vitol and four other shipping companies of wrongful release and non-delivery of petroleum products covered by bills of lading endorsed to UBA.
However, the judge’s ruling was expressly limited to the second respondent, with the court stating: “Prayers 1–3 are granted as prayed against the 2nd Respondent only.”
UBA’s lead counsel, Bode Olanipekun, SAN, urged the court to grant the interim orders to preserve assets while the bank pursues its claims.
In an affidavit supporting the application, UBA’s Group Head of Recoveries and Remedial Management, Anthony Chilaka, said the bank had issued a letter of credit for the benefit of Vitol to facilitate petroleum products transactions.
According to the affidavit, the cargoes were shipped to Nigeria, and the vessels’ masters issued bills of lading subsequently endorsed by Vitol “to the order of” UBA. The original shipping documents were then handed over to the bank.
UBA argued that the endorsement entitled it to take possession of the petroleum products upon completion of the voyages.
The bank, however, alleged that the cargoes were not delivered despite the completion of the voyages and were instead diverted for the benefit of other parties.
“The applicant has not been given possession of the gasoil despite completion of the voyage,” Chilaka stated in the affidavit.
UBA contends that the alleged diversion and non-delivery constitute conversion, misrepresentation and negligence, and is seeking to establish the liability of Vitol and the vessel owners in the substantive proceedings.
The application was brought under 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 also cited 34 financial institutions and public agencies, including commercial and merchant banks, microfinance banks, the Nigerian Ports Authority and the Nigeria Customs Service, in connection with the application.
The interim orders are intended to preserve relevant assets pending further proceedings. The allegations against the respondents have yet to be determined on their merits.
