JAPAUL PLC VS ACCESS BANK: FEDERAL HIGH COURT VACATES MAREVA ORDER_Ada Nkong

In what can be described as a temporary respite, the Federal High Court led by Justice Aneke has vacated the Mareva order obtained against Japaul PLC by it’s bankers Access bank.

The case of Japaul Oil & Maritime Services Plc, who acknowledges the debt owed its bankers, Access Bank Plc  but has a higher counter-claim as evidenced by the forensic report led to the company being under a MAREVA order obtained by the bank since January 15, 2019 that has all but crippled the ability of the listed entity to function as a viable going concern.
 
The Federal High Court (FHC) in the Lagos Judicial Division before Justice C. J. Aneke, has awarded Japaul a judgment against its banker, Access Bank Plc , the judgment order in respect of
Access Bank Plc v. Japaul & 8 Others [2019] Suit No: FHC/L/CS/29/19 of May 6, 2019 by the Honourbale J. C. Aneke,

wherein it challenged the MAREVA order successfully. 

The judgement reads

“The Defendants/Applicants have therefore demonstrated to the satisfaction of this Honourable court how the instant suit constitutes an abuse of judicial or court process. For instance it has been shown that there is a multiplicity of actions on the same subject matter against the same opponents on the same and /or similar issues and that the instant suit constitutes the use of judicialprocess to the irritation and annoyance of the Defendants/ Applicants to truncate the efficient and effective administration of justice. All these have been demonstrated to the case therein. I hold therefore that this suit constitutes abuse of Court or judicial process thus robbing this Honourable Court of the requisite jurisdiction to hear and determine same.  In the result, the interim Orders of this Honourable Court made on the 15th day of January, 2019 are hereby set aside and the suit accordingly struck out for want of jurisdiction to hear and determine same.”

As a result of the case, Japaul and its Chairman were denied access to either the corporate account of the listed entity or/and that of the Chairman personally (having been a guarantor of the loan); thereby placing the company in dire operating conditions even while the substantive suit was yet undetermined. 
 Access Bank and Japaul have prior to this had an incident free relationship from the representations made; and had built a banking relation for about fourteen (14) years up to the point when things turned south.

 

 The Chairman of the company was invited in October 2018 for questioning and detained while the EFCC carried out an investigation into the matter and subsequently recommended that both parties reconcile the customer’s loan book. 
 
This action by the EFFC occurred while the case challenging the outstanding loan claim had been filled in the court of competent jurisdiction. 
 The three cases were filed in 2018 with proceedings in progress. The State High Court advised that both parties go for mediation and that Access Bank bring its own report on the account status of the customer. This process, for reasons unknown, has not been consummated since mid-January 2019.
 
Perharps unsatisfied with the non-progress of the process for an amicable resolution of the matter, the bank approached Honourable Justice C. J. Aneke of the Federal High Court in Lagos wherein the bank asked for; and received an ex parte Mareva Injunction seizing the assets of Japaul and its Chairman. 
 
The Mareva Judgment: 
In suit No: FHC/L/CS/29/19 the Honourable Justice Aneke granted the following order:

 
1.       An Order for the immediate Arrest and detention ofvthe Vessels MV JAPAUL A TUGBOAT AND MV DOMINON (MV PINA) TUGBOAT, THE VESSELS JD-1 DREDGER and JD 11 DREDGER the 1st, 2nd, 3rd and 4th Defendants (the mortgaged properties) anywhere they may be found within the Niegrian territorial waters within the jurisdiction of this Honourable Court pending the hearing and determination of the substantive suit;
2.      AN ORDER OF MANDATORY PRESERVATIVE INJUNCTION is made restraining the 3rd Defendant, JAPAUL MINES & PRODUCTS LIMITED, JAPAUL OIL & MARITIME SERVICES PLC AND PAUL ABIODUN JEGEDE, OWNERS OF JAPAUL A TUGBOAT AND MV DOMINION (MV PINA) TUGBOAT, THE VESSELS JD-1 DREDGER AND JD-11 DREDGER the 1st,2nd, 3rd, and 4thDefendants (the mortgaged properties) from registering any change or charges or mortgages to the ownership of the 1stand 2nd Defendants pending the hearing and determination of the substantive suit;
3.      AN ORDER OF MAREVA INJUNCTION is made restraining the 3rd Defendant; JAPAUL MINES & PRODUCTS LIMITED, JAPAUL OIL & SERVICES PLC and PAUL ABIODUN JEGEDE, OWNERS OF JAPAUL A TUGBOAT AND MV DOMINION (MV PINA) TUGBOAT, THE VESSELS JD-1 DREDGER AND JD-11 DREDGER the 1st, 2nd 3rd and 4the Defendants herein, their agents, officers, assigns from operating the account maintained with the banks listed in schedule hereto including issuance of cheques, bank drafts, cash withdrawals or anything howsoever that would cause any sum of money to be removed from the said account pending the hearing and determination of the substantive suit;
 The Effect Of The Order 
Effectively, the court order had a severe impact on Japaul’s ability to conduct normal business interests.
The Mareva order made it impossible for the company to operate its accounts and sustain its activities as a going concern; the consequence of which threatened the jobs of hundreds of workers employed by the company.
 

 
This alleged response from a market regulator requires some deep reflections as it undermines the integrity of timely problem resolution mechanisms put in place to build confidence in the market and promote a veritable ‘ease of doing business’ climate.