Court orders AMCON to pay Capital Oil and Gas N26bn

A Federal High court sitting in Abuja has ordered the Asset Management Corporation of Nigeria (AMCON) to pay Capital Oil and Gas Limited the sum of  N26 billion  as contained in the consent judgment delivered in 2013 conveying and giving force of judicial authority to an agreement between the parties for the restructuring of debts owed by the capital oil to various creditors.
The consent judgment prescribed that AMCON would provide a total sum of N55.89 billion to the plaintiff, Capital Oil and Gas Industries Limited for the payment of debts owed to various creditors including banks, trade creditors and staff of the plaintiff and an additional N16 billion as trading capital to the plaintiff for the purpose of its petroleum products trading business.
The terms of the consent judgment, which were a replication of the terms of a settlement agreement entered into by the parties, reflected the reality that the plaintiff was not insolvent but merely illiquidity in that it had more assets even at forced sale value than the debts it owed. In his judgment yesterday, Justice Abdul Kafarati  held that the court has powers to enforce its judgment or the verdict of any lower court in the country.
Besides, Justice Kafarati also restrained AMCON from exercising any powers over Capital Oil and Gas Limited and its assets and from processing any assignment and transfer among others. He further advised the defendant to live up to its statutory responsibility of reviving the nation’s economy through positive supports for businesses to thrive.
The court went further to grant all the reliefs of the plaintiff and made the following orders:
“An order compelling the defendant (AMCON) to comply with obligations to restructure the plaintiff’s debt and to provide Trade Finance Facility in the sum of N16 billion for revamping of the plaintiff’s business and to pay the plaintiff’s trade creditors.
“An order compelling the defendant to comply with the consent judgment and to make the additional sum of N10,590, 000,000 available to the plaintiff for the payment of sundry creditors who continue to threaten the plaintiff’s business. “An order of injunction restraining the defendant from exercising any powers over the plaintiff and its assets and from processing any assignment, transfer or other demise whatsoever or requesting for statutory consent or other approvals for the transfer or other demise of any rights in the assets of the plaintiff,” Justice Kafarati said.
In his reaction shortly to the judgment, counsel to the plaintiff, Ajibola Oluyede, described the verdict as a “landmark decision” that is rooted in the vision of the founding fathers of AMCON, urging AMCON to adhere to the position of the court by living up to its statutory billing in providing the needed support for businesses to flourish with the ultimate goal of creating jobs for the citizenry.
It would be recalled that a Federal High Court, Lagos Division, had on May 6th struck out the suit commenced by AMCON against Capital Oil and Gas Industries Limited on the grounds that the suit was premature and seeks to circumvent existing suits in different courts on issues relating to the alleged indebtedness of Capital Oil and Gas which is currently under dispute.
This was the basis of an order by the judge, Justice Idris, striking out a petition filed in the court by AMCON for the freezing of Capital Oil and Gas’ accounts and winding up of Capital Oil and Gas Ltd  for its alleged inability to pay the disputed debt.
In the ruling delivered on 6th May 2016 in Suit No. FHC/L/CP/506/2016, the judge upheld the contention of Capital Oil and Gas’ counsel, Ajibola Oluyede, represented by Michael Damiari, that the winding up proceedings filed by AMCON against Capital Oil and Gas was intended to circumvent the existing actions in suits FHC/ABJ/CS/430/15; FHC/ABJ/CS/514/15 and FHC/L/CS/1529/15 where-in live issues pertaining to the consent judgment in FHC/ABJ/CS/714/2012 which is the subject matter of the winding up petition are pending.
According to the court “until the issues raised in those suits are determined, it will be premature to say the judgment debt has crystalized as provided in clause 2.4 of the consent judgment”.
Specifically, ‎the Federal High Court, Lagos Division,had struck out the suit commenced by AMCON against Capital Oil and Gas Industries Limited on the ground that the suit is premature and seeks to circumvent existing suits in different courts on issues relating to the alleged indebtedness of Capital Oil and Gas which is currently under dispute.‎
This was the basis of an or-der by the judge, Justice Idris, striking out a petition filed in the court by AMCON for the freezing of Capital Oil and Gas’ accounts and winding up of Capital Oil and Gas Ltd. for alleged inability to pay the disputed debt.
In the ruling delivered on Friday 6th May 2016 in Suit No. FHC/L/CP/506/2016, the judge upheld the contention of Capital Oil and Gas’ counsel, Ajibola Oluyede, represented by Michael Damiari, that the winding up proceedings filed by AMCON against Capital Oil and Gas was intended to circumvent the existing actions in suits FHC/ABJ/CS/430/15; FHC/ABJ/CS/514/15 and FHC/L/CS/1529/15 where-in live issues pertaining to the consent judgment in FHC/ABJ/CS/714/2012 which is the subject matter of the winding up petition are pending. According to the court “until the issues raised in those suits are determined, it will be premature to say the judgment debt has crystalized as provided in clause 2.4 of the consent judgment”.
In defence, Capital Oil and Gas, in its Respondent’s Counter Affidavit of 91 paragraphs deposed to by Nsikan Usoro in opposition to AMCON’s petition, had contended that AMCON grossly violated the terms of the consent judgment entered between the two parties. It was argued that AMCON failed, refused and/or neglected to inject the requisite funds into Capital Oil and Gas as agreed and contained in the terms of the consent judgment despite Capital Oil and Gas fulfilling all its obligation of transferring assets valued at over N150 billion to AMCON. It was also contended that Capital Oil and Gas, which is a going concern and also a company of strategic national importance responsible for a great percentage of petroleum products distributed nationwide, is not insolvent, not indebted to AMCON, neither was it unable to pay its debt as the company has assets worth over N300 billion, far in excess of any alleged debt to AMCON or any other creditor.
It was further argued that AMCON is indebted to Capital Oil and Gas to the tune of over N150 billion, arising from economic losses and damages inflicted on Capital Oil and Gas by AMCON, through the gross mismanagement of Capital Oil and Gas’ prime facilities and business interests during the two years of AMCON’s ill management of Capital Oil and Gas, which is the subject matter of suit no. FHC/ABJ/CS/430/2015 and in other various claims pending before different courts.
The court agreed with the argument of Capital Oil and Gas in its preliminary objection and struck out the petition. The court also set aside all the interim orders made by the court therein.

Source;Sunnews