Obat Oil Seeks Out of Court Settlement over Alleged N1.4b Debt

Obat Oil and Petroleum Limited has proposed to settle out of court with Skye Bank Plc, in an alleged N1.4 billion debt recovery suit slammed against the oil firm by the bank.

The bank, had in a bid to enforce an arbitral award dated August 7, 2015, dragged the oil firm before a Federal High Court sitting in Lagos.

Skye Bank had sought to recover a loan debt of N2,142,462,572.26 owed to it by Obat Oil and Petroleum. The loan was guaranteed by His Imperial Majesty, Oba (Dr) Frederick Eniti Akinruntan.

The bank further sought to recover 15 per cent interest on the amount, from April, 2014 till the date of the liquidation of the debt.

The case was taken before an arbitrator, Aare Afe Babalola (SAN), during which Obat Oil and Dr Akinruntan, appealed for concessions and waivers on the amount of accrued interest, fees and commissions.

The Arbitrator held that it would be fair and equitable to award N1,406,944,352.76 to the claimant, which represents the amount that the respondents admitted as being the outstanding balance, as at March 31.

Aare Babalola also awarded 10 per cent interest per annum, on the N1.4billion from the April 1, 2014, till the date of final liquidation of the amount.

Justice Jude Dagat of the Federal High Court, had in his ruling on the Originating Motion by Skye Bank, directed Skye Bank to take over Obat Oil and Petroleum Limited’s depot over the said debt.

But at the resumed hearing of the matter last week, counsel to Obat Oil, Mr. Olalekan Ojo, moved a motion to regularise his processes, which was granted.

According to him, the parties have met on several occasions with a view to settling out of court.

"I most respectfully apply for a short adjournment to enable the parties effectively agree on the repayment terms. They have been customers for years," he said.

Mr. Sylva Ogwemoh SAN, counsel to the bank, confirmed that meetings had been held, but that no offer had been made.

"No payment terms have been proposed to us. My hands are tied and my clients are eager. What's in issue is depositors' funds. If there's a display of good faith, why not?", he said.

Ogwemoh said that a meeting was held on November 14, but that Obat Oil did not improve on its initial offer of N100 million part payment.

"They owe N1.4 billion and their offer is not even up to half a billion naira. Nothing reasonable has been put on the table," Ogwemoh added.

But, Ojo promised that his client would "take this issue of amicable settlement seriously".

Justice Dagat adjourned the matter till January 13, 2017, for report of settlement or hearing of pending applications.