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Fortune Towers, Victoria Island, Lagos

NDIC floors Union Bank, firm over ownership of Fortune Towers

Nigerian Deposit Insurance Corporation (NDIC) has succeeded in moving the Court of Appeal, Lagos, to set aside a ruling of a Lagos High Court, which held that the corporation’s suit on the lingering crisis on the ownership of an imposing complex, popularly known as Fortune Towers, situated at No. 27/29 Adeyemo Alakija Street, Victoria Island, Lagos, was an abuse of court process.

The corporation, being the provisional liquidator of Fortune International Bank Plc (in liquidation) on appeal, named Union Bank of Nigeria Plc and Cowrie Business Solutions Limited as respondents.
Following the Court of Appeal’s ruling, the matter was sent back to the trial court to be heard on its merit. However, The Guardian confirmed that talks are on-going reach an amicable out-of court settlement of the dispute. But as at press time, the next hearing date could not be ascertained.

Fortune International Bank Plc (FIB Plc), a licensed commercial bank, maintained a banking relationship with first respondent, Union Bank of Nigeria and in the course of the relationship, the latter granted overdraft facilities to FIB Plc, which were later secured with a deed of legal mortgage. Fortune Towers, which originally belonged to FIB Plc, was pledged as collateral in the legal mortgage.

On 16th January 2006, the Central Bank of Nigeria revoked the banking license of FIB Plc for failing to meet up with the minimum capital requirement of N25billion for commercial banks. Consequently, an Interim Management Committee (IMC) was appointed provisional liquidator to control and manage its affairs. The appellant later commenced winding-up proceedings against FIB Plc at the Federal High, Lagos.

Meanwhile, when the IMC took over the affairs of FIB Plc, it discovered that there were disputes between the first respondent and FIB Plc, which led to two separate suits at the Federal High Court, Lagos and the High Court of Lagos State.

In suit No. FHC/L/CS/1321/2005 filed at the Federal High Court, Lagos, FIB Plc, claimed against Union Bank, declaratory and injunctive reliefs.

FIB Plc complained about unilateral deduction from its account as legal charges for the perfection of the legal mortgage with Union Bank, refusal to set off treasury bill it deposited as clearing collateral, the charge of illegal and arbitrary interest; and that, in the circumstances, the mortgage held by Union Bank over Fortune Towers could not be foreclosed.

FIB Plc filed an application seeking an order of interlocutory injunction restraining Union Bank from appointing a receiver under the legal mortgage or selling or attempting to sell Fortune Towers or taking benefit of the mortgage.

In its ruling, the trial court refused the application and held that FIB Plc had no legal right in the property. Dissatisfied, FIB Plc appealed to the Court of Appeal.

However, while the suit at the Federal High Court was pending, thugs and hoodlums invaded Fortune Towers. Consequently, FIB Plc instituted another action at the High Court of Lagos State against UBN Property Co. Ltd and the Union Bank as first and second defendants claiming declaration that the invasion and entering of the property, as well as issuing and circulating of notices to all tenants by the defendants were unlawful, illegal, unconstitutional, null and void. The claimant also sought an order of perpetual injunction restraining them from invading, entering, issuing or circulating notices or otherwise dealing with the property and general damages. Similarly, FIB Plc also filed at the High Court an application for an order of injunction.

The first defendant and first respondent filed their own application praying for the same order against the bank.

In its ruling, the trial court dismissed the FIB Plc’s application but granted the defendants’ application. Dissatisfied with the ruling, FIB Plc, appealed to the Court of Appeal and applied for an order of stay of execution of the order of the High Court, but the court refused the application.

In the suit at the High Court, Cowrie Business Solutions Limited applied to be joined as a party. The reasons it gave were that the Federal High Court had made an order winding up FIB and appointed NDIC as provisional liquidator and that Union Bank had sold and handed over possession of Fortune Towers to it. The application was granted.

Meanwhile, Union Bank sent a letter to all the tenants in Fortune Towers informing them of the sale and hand over of possession of the property to Cowrie pursuant to the power of sale in its deed of legal mortgage with FIB Plc. They subsequently issued a notice to quit and deliver up possession to FIB Plc/NDIC.
At that point, NDIC instituted an action at the Federal High Court, seeking a declaration that the disposition of Fortune Towers by means of sale or assignment by Union Bank to Cowrie when the property formed part the assets of FIB Plc in liquidation whilst a winding up proceedings was pending and a provisional liquidator appointed was ineffective, illegal, unlawful, null and void.

It also sought an order setting aside the purported disposition and the notice to quit; and an order of injunction restraining the respondents from disturbing the appellant in the performance of its statutory duties as provisional liquidator of FIB Plc as it relates to the management and exercise of all possessory rights over the property until the bank was fully and finally wound up by order of court. The appellant also filed an application for interlocutory injunction.
Following the service of the process, the Union Bank filed a statement of defence while Cowrie Solutions filed a statement of defence and counter-claim.

Also, Union Bank then filed an application by which it sought an order dismissing the appellant’s suit on the ground that same constituted an abuse of court process.

According to the bank, the grounds for the application were that the ownership, management and control rights in respect of Fortune Towers were subject matter of existing litigations between the parties and their privies in suits No. FHC/L/CS/1321/2005 and No. ID/1098/2008 and that the decisions of both the Federal High Court and High Court of Lagos State in the suits declared that FIB Plc no longer had further interest in the property and the decisions of the courts in the suits, which held that FIB Plc had no further interest in the property, the appellant being a privy of FIB Plc lacked the necessary locus and competence to institute the action and in the process sought to re-litigate the same matter in respect of the same subject matter.


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