Mutual Benefits Assurance sues Oil firm over ₦10bn debt

By Akin Kuponiyi

A fierce legal battle has erupted between insurance giant Mutual Benefits Assurance Plc and Prime Exploration and Production Limited, as the former drags the oil company before a Federal High Court in Lagos over an alleged unpaid debt exceeding ₦10 billion and $36 million.

In a winding-up petition jointly filed by Mutual Benefits Assurance and its associate company, Mutual Exploration and Production Limited, the petitioners are urging the court to dissolve Prime Exploration and Production over its “persistent failure” to liquidate a binding judgment debt.

According to court filings deposed to by Mutual’s Legal Manager, Inyene Docars Ntuk, and submitted through their legal counsel, Barrister Gboyega Oyewole, SAN, the petitioners contend that Prime Exploration is indebted to the tune of ₦10,062,715,955 and $36,492,546, inclusive of interest accrued as of February 28, 2025.

The debt stems from a series of loans and advances previously extended to the oil firm. It was later consolidated under a consent judgment entered into by both parties in Suit No. LD/2864GCM/2021, following a negotiated terms of settlement dated November 10, 2023.

By the terms of that judgment, Prime Exploration was held liable for ₦5.72 billion and $27.7 million, with interest on the naira component accruing at 15% per annum from January 1, 2022.

However, Mutual Benefits claims the oil company has failed to honour the consent judgment, defaulting on its payment obligations despite repeated demands through legal correspondence.

“The Respondent has failed, refused, and/or neglected to pay its outstanding indebtedness to the Petitioners,” the affidavit states. “This clearly suggests the Respondent’s unwillingness to comply with the judgment, which has now crystallised into a liquidation scenario.”

Citing Sections 571(d), 572(a & b), and 573(1)(b) of the Companies and Allied Matters Act (CAMA) 2020, the petitioners are seeking the court’s intervention to wind up the company and appoint a liquidator, arguing that Prime Exploration is unable to meet its financial obligations.

In response, however, Prime Exploration and Production Limited has pushed back strongly, filing a counter-affidavit through Oditha Legal Practitioners. The counter was sworn to by litigation executive Ikechukwu Oleru, who described the petition as “a veiled attempt to harass the Respondent.”

The company insists the debt is not yet due and payable, citing the consent judgment’s provision that payment is contingent on the completion of an outstanding accounting and reconciliation process.

According to the oil firm, payment of the debts is subject to three unresolved issues:

The ascertainment of amounts owed by the petitioners to PEPL in respect of unpaid cash calls dating back to June 2008.

Offsetting any amounts owed to PEPL against the current petition debt.

Determining whether a net balance remains after reconciliation.

“The petitioners are, at best, contingent or future creditors and may not be creditors at all once the accounting and set-off exercise has been concluded,” the respondent argued.

It also pointed out a technical flaw in the petition, noting that the verifying affidavit fails to comply with Rule 18 of the Companies Winding-Up Rules, 2001, further urging the court to dismiss or strike out the matter.