Appeal Court Overturns GTBank’s ₦970m Debt Victory Against MKO Abiola’s Son, RCN Networks
Appeal Court overturns GTBank’s ₦970m win over MKO Abiola’s son, cites faulty mortgage.
Judges void 2014 ruling, say deed tied to forgery claims can’t support debt enforcement.
The Court of Appeal in Lagos has overturned a 2014 judgment by the Federal High Court that awarded Guaranty Trust Bank Plc (GTBank) ₦970 million in debt claims against RCN Networks Ltd and Agboola Abiola, son of late business mogul and politician MKO Abiola.
In the ruling delivered by Justice Paul Bassi on Wednesday, the appellate court set aside the lower court’s decision because it was based on a legally questionable document, the Deed of Tripartite Legal Mortgage dated August 15, 2012, which allegedly involved Abiola’s property as collateral.
This legal instrument is typically a three-party mortgage agreement involving a borrower, a lender (usually a bank), and a third party offering security, often when the borrower lacks adequate collateral. In this case, GTBank had presented it as evidence that Abiola acted as a guarantor for the debt owed by RCN Networks Ltd.
At the Federal High Court, GTBank had successfully argued that RCN defaulted on the agreement, and as guarantor, Abiola became liable for the outstanding ₦970 million. The bank sought a perpetual injunction preventing both defendants from obstructing its appointed Receiver/Manager, Mr. Norrison I. Quakers SAN, from taking control of Abiola’s property listed in the mortgage document.
On June 20, 2014, the court granted GTBank’s request, awarding judgment in its favor and enabling the bank to enforce the mortgage and recover the debt.
However, dissatisfied with the ruling, RCN Networks Ltd and Abiola filed an appeal, contending that there was no valid or enforceable legal mortgage agreement binding on Abiola. Their counsel, Charles Adeogun-Phillips, argued that Abiola’s name might have appeared in the document, but he never signed it, making the mortgage legally void.
The appellants further argued that enforcing the deed against Abiola breached the principle of privity of contract, which holds that only parties to a contract are bound by its terms. They also raised concerns about alleged forgery and unauthorized alterations in the document, which had previously attracted police attention.
On the other hand, GTBank’s counsel insisted that the mortgage deed was duly executed and that it entitled the bank to appoint a receiver over Abiola’s property.
In a unanimous decision, the three-member panel of the Appeal Court ruled in favor of the appellants. Justice Bassi emphasized that the lower court erred by basing its judgment on a document whose authenticity had been called into question and was tainted with unresolved allegations of fraud.
“The lower court elected to gloss over these alleged alterations and amendments, which even the police alluded to,” Bassi said. “A court cannot determine the rights of parties based on a document clouded by forgery or lacking clear acceptance by the parties involved.”
He added that judicial interpretation should only occur when the legitimacy of a document is not in dispute. “It is incumbent on the court to be satisfied that the deed or document sought to be interpreted is accepted by the parties as creating the rights and obligations of the parties.”
Concluding that the Federal High Court acted on a “faulty premise,” the Appeal Court voided the 2014 judgment, dismissed GTBank’s claims, and ruled that Mr. Quakers’ appointment as Receiver/Manager over Abiola’s property was invalid.
This decision marks a significant legal victory for Agboola Abiola and RCN Networks Ltd., while also reinforcing the judiciary’s stance that contested or allegedly fraudulent documents cannot form the basis for enforceable legal decisions.
