$242m Petroleum Dispute: Court Grants UBA Interim Order Against Vitol, Four Shipping Firms

$242m Petroleum Dispute: Court Grants UBA Interim Order Against Vitol, Four Shipping Firms Wale Igbintade The Lagos State High Court has granted interim preservative orders of Mareva injunction in favour of United Bank for Africa (UBA) Plc against Vitol SA, a Switzerland-based energy trading company, and four other shipping companies over a petroleum products diversion dispute involving $242 million. UBA alleged that Vitol wrongfully released cargoes of petroleum products consigned to the bank’s order under the relevant bills of lading. Addressing the court, Bode Olanipekun, SAN, lead counsel to UBA, urged the judge to grant the interim preservative orders against Vitol and the other shipping companies. In her ruling, Justice K. A. Jose granted three prayers in UBA’s application, including requests to restrain the dissipation of assets and dealings in funds up to the disputed amount by Vitol SA. “Prayers 1–3 are granted as prayed against the 2nd Respondent only,” the judge ruled. The application was brought pursuant to 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 the substantive proceedings, UBA intends to contend that Vitol SA and the owners of the vessels are liable for alleged conversion, misrepresentation and negligence arising from the non-delivery of the petroleum products. The bank also cited 34 financial institutions and public agencies, including commercial banks, merchant banks, microfinance banks, the Nigerian Ports Authority and the Nigeria Customs Service, in connection with the application. In an affidavit supporting the application, UBA’s Group Head of Recoveries and Remedial Management, Anthony Chilaka, stated that the bank had issued a letter of credit in favour of Vitol SA to facilitate a petroleum products transaction. According to the affidavit, the cargo was transported to Nigeria, where the masters of the vessels issued several bills of lading. UBA further alleged that Vitol subsequently endorsed the bills of lading in favour of the bank and handed over the original copies to it. The bank maintained that the endorsement entitled it to take possession of the cargo upon completion of the voyage. However, Chilaka stated that UBA had 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 diverted for the benefit of another party, arguing that the failure to deliver the petroleum products amounted to conversion and negligence. The bank further contended that the respondents had obligations arising from the transaction and the endorsement of the shipping documents but failed to fulfil them. It also alleged that cargoes associated with the transactions were diverted to other parties after the completion of their voyages rather than being delivered to UBA.