Polaris Bank and the Asset Management Company of Nigeria, AMCON, lacked the powers to sell Intercontinental Hotel, the Court of Appeal in Lagos has ruled.
The appellate court has also ordered the the return of the hotel to the original owner, the Milan Industry Ltd.
The judgement of the court is based on the N2 billion loan facility obtained by the Milan Industry Ltd to part finance the construction of the hotel. The loan facility, according to the bank has now grown to over N15 billion.
But ruling on the matter, the Court of Appeal in a unanimous judgment said the hotel management had paid fully the N2 billion loan obtained from the bank, and as such the hotel should not have been put up for sale.
According to the appellate court in the judgement appeal No CA/LAG/ CV/476/2021, the issue put before it is whether the hotel has fully paid the N2 billion original loan , and not whether it has liquidated other facilities and intents which now stood at N15 billion.
on the appeal filed by Polaris and AMCON which had earlier nullified the sale of the hotel to another firm, 11 Plc.
The Court of Appeal, Lagos Division has nullified the sale of Intercontinental Hotels, Lagos, by Polaris Bank and the Asset Management Corporation of Nigeria, AMCON, and ordered a return of the facility to the original owner, the Milan Industries Ltd.In a unanimous judgment in appeal No CA/LAG/CV/476/2021, the appellate court held that Milan Industries Ltd had fully paid the bank the N2 billion mortgage facility it secured from Polaris Bank before the hotel was taken over and sold by AMCON and the bank.
On the argument by Polaris Bank that the hotel has not liquidated the loan, the three-man panel presided over by Justices Jimi Olukayode Bada, held that facts before the court proved to the contrary, noting that with the deposition of the Respondent in paragraph 16 of the Counter Affidavit on page 115, the records indicate that the sum has been liquidated since December 5, 2016.
Justice Bada held: “In this case, the maximum amount secured was N2 billion and the 1st respondent cannot use the property charged to liquidate any amount in excess of the maximum amount secured and where the maximum amount secured is paid the security is discharged.
“The excess amount not secured is an unsecured debt which can only be recovered through a debt action and not by enforcement of the charge.
“In this matter the maximum amount secured in the sum of N2 billion has been repaid to discharge the security. As I said earlier the respondent cannot enforce the charge for any amount in excess of the N2 billion registered against the charge.
“The issue before the trial court was not whether the appellant had repaid all the facilities availed and standing at N15 billion, the issue in dispute was whether the appellant had repaid the N2 billion secured.
“For reason best known to the 1st Respondent it registered the charge under consideration for N2 billion when it could have registered it for the maximum amount availed, including the accrue interest.”
Recall that Polaris Bank formerly known as Skye Bank had put the management of the five-star hotel under the receivership of Kunle Ogunba, an arrangement that was nullified by a Federal High Court in Lagos.
Despite this, the bank went ahead and sold the hotel to another company, 11 Plc, a move that was challenged at the Appeal Court by the lawyers to Milan Industries Ltd, Messrs Ahmed Raji and Tunde Kasunmu of Prof. A.B Kasunmu Chambers.
Based on the judgment released on Wednesday, the Court of Appeal has now resolved the two issues sought by Intercontinental Hotel which is the Appellant/ Cross Respondent, in its favour.
Milan Industries Ltd had taken a facility from Skye Bank to part-finance the five-star hotel located in Victoria Island, Lagos and managed by IHG.
The Milan Group had up till 2021 to pay back the facility but in a curious move, the bank obtained an interim order to take over the management of the hotel, an order that was vacated when the suit was struck out by the court on March 20th 2018According to the Certified True Copy of the judgment signed and released on Wednesday by the Senior Registrar of the court, A. G. Balogun, the appellate court held that the two issues Milan Industries as Appellant/Cross Respondent was contesting were resolved in its favour.
“With the resolution of Issues No. 1 and 2 in favour of the Cross Respondent and against the Cross Appellants (Polaris Bank, AMCON and 11 PLC), it is my view that this cross appeal lacks merit and it is hereby dismissed,” Justice Baba said.
