A Federal High Court in Lagos on Monday handed Union Bank of Nigeria a resounding victory, ordering prominent oil marketer Eterna Plc to repay a colossal N20.7 billion in outstanding loans and accrued interest, capping a protracted battle over defaulted credit facilities that exposed vulnerabilities in the downstream energy sector.
Justice Ambrose Lewis-Allagoa delivered the ruling in suit FHC/L/CS/564/2023, where the lender sought redress for unpaid sums stemming from a 2019 syndicated loan agreement designed to bolster Eterna’s operations amid volatile fuel markets.
The court found Eterna liable for the principal debt of N10.2 billion, plus interest and penalties that ballooned the total to N20.7 billion, with Lewis-Allagoa declaring: “The defendant has failed to demonstrate any valid defence against the plaintiff’s claims. The facility was duly executed, disbursed, and remains irrecoverable despite repeated demands.”
Union Bank’s counsel, Chief Joe Agi (SAN), hailed the outcome as a “pivotal affirmation of contractual sanctity,” telling reporters outside the courthouse: “This judgment reinforces the banking sector’s resolve to recover legitimate dues, sending a clear message to borrowers that obligations must be honoured, regardless of market headwinds.”
Eterna, once a bellwether in Nigeria’s petroleum distribution, had argued force majeure clauses tied to global oil slumps and regulatory shifts, but the judge dismissed these as “insufficient to vitiate the agreement’s terms,” mandating immediate compliance or asset attachment.
The dispute traces back to a N15 billion credit line extended in phases from 2018, aimed at expanding Eterna’s depot infrastructure and import quotas, only for repayments to falter as naira devaluation and subsidy scrapping eroded margins.
“This isn’t just about money; it’s about accountability in an industry that’s too often shielded by excuses,” Agi added, underscoring how the win could unlock funds for Union Bank’s retail expansion.
Eterna’s legal team, led by Dr. O. Afolabi (SAN), expressed intent to appeal, terming the verdict “hasty” and vowing to challenge it at the Court of Appeal. “We respect the process but believe critical evidence on economic duress was overlooked,” Afolabi stated.
