Court grants UBA interim order against Vitol over $242m petroleum dispute

A Lagos high court has granted United Bank for Africa (UBA) Plc’s request to preserve assets in a dispute with Vitol over the alleged diversion of N242 million in petroleum products.

In a ruling last Thursday, Justice K. A. Jose granted three prayers in the bank’s application, including requests to prevent the dissipation of assets and restrict dealings with funds up to the disputed amount.

“Prayers 1–3 are granted as prayed against the 2nd Respondent only,” the judge ruled.

In its application, UBA alleged that Vitol SA, a Switzerland-based energy trading company, and four shipping companies wrongfully released petroleum cargoes consigned to the bank’s order in the bills of lading.

The bank sought to establish in substantive proceedings that Vitol and the owners of the vessels are liable for alleged conversion, misrepresentation and negligence arising from the non-delivery of the products.

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.

In an affidavit supporting the application, Anthony Chilaka, UBA’s group head of recoveries and remedial management, said the bank issued a letter of credit in favour of Vitol SA to facilitate a petroleum products transaction.

Chilaka said the cargoes were transported to Nigeria, and the vessels’ masters issued several bills of lading.

He said Vitol subsequently endorsed the bills of lading “to the order of” UBA and handed the original copies to the bank.

According to the group head, the endorsement entitled it to take possession of the cargo upon completion of the voyage.

However, Chilaka said the bank has not received the gasoil despite the completion of the voyage.

“The applicant has not been given possession of the gasoil despite completion of the voyage,” the affidavit stated.

UBA alleged that the cargo was instead applied to the use of another party, arguing that the respondents’ failure to deliver it amounted to conversion and negligence.

The lender said the respondents had obligations arising from the transaction and the endorsement of the shipping documents, which it alleged were not fulfilled.

UBA also cited 34 financial institutions and public agencies in connection with the application, including commercial banks, merchant banks, microfinance banks, the Nigerian Ports Authority and the Nigeria Customs Service (NCS).