Justice Akintayo Aluko of the Federal High Court sitting in Lagos on Thursday struck out the suit filed by the Lagos State Internal Revenue Service (LIRS) against Eroton Exploration and Production Limited. The Judge further vacated the earlier interim orders which led to the appointment of an Administrator over Eroton.
In his ruling delivered on Suit No FHC/L/CS/2499/2025, Justice Aluko struck out the suit and vacated the interim orders after confirming that Eroton had fully settled its outstanding tax liabilities to LIRS, thus extinguishing the basis of the action and effectively bringing the contentious appointment of an Administrator to an end
When the matter was called for hearing, Dr. Joseph Nwobike, (SAN), leading Victor Chukwumah and David Nwobike of Osborne Law Practice, announced appearance for Eroton and Bilton Energy Limited, while Jubril Kareem represented the LIRS.
Counsel to the interim administrator, Sesugh Famave, appeared with Ogunwole Ebenezer and Kehinde Sanwade, while Adesewa Mojeed, represented a party seeking to be joined in the suit.
At the resumed hearing, counsel to the interim administrator urged the court to adjourn proceedings pending the determination of a motion for joinder filed by the interested party.
The application was supported by counsel to the joinder/applicant.
However, Eroton’s legal team strongly opposed the request, arguing that it amounted to an abuse of court process.
They drew the court’s attention to an unchallenged affidavit of settlement, accompanied by a letter from the office of the Lagos State Attorney General, confirming that the company had fully liquidated its indebtedness to the LIRS and that the tax authority no longer had any subsisting claim.
On that basis, the defence argued that the doctrine of mootness applied, as the plaintiff’s cause of action had been completely extinguished, thereby robbing the court of jurisdiction to continue entertaining the suit.
They further contended that the interim administrator lacked the procedural standing to participate beyond the scope of the administration application, describing his submissions as misconceived.
Relying on judicial authority, including South Atlantic Petroleum Ltd vs Minister of Petroleum Resources (2023), the defence urged the court to strike out the suit and discharge all subsisting interim orders.
Responding, counsel to the LIRS confirmed before the court that the defendant had indeed settled its outstanding obligations and that the agency no longer had any claim against Eroton.
In his ruling, Justice Aluko agreed with the submissions of the defence and held that the suit had become academic.
The court found that the cause of action had been extinguished by the payment of the outstanding debt and that there was no longer a live dispute requiring adjudication.
The judge further held that the application for joinder was incompetent, noting that the absence of a subsisting claim meant there was no basis upon which a new party could be introduced.
The court observed that the divergence in positions, where the plaintiff sought to discontinue the suit while the proposed co-plaintiff sought to sustain it, demonstrated a lack of common interest.
Justice Aluko also clarified that the purpose of administration proceedings under the Companies and Allied Matters Act (CAMA), 2020, is to rescue financially distressed companies, not to serve as a mechanism for indiscriminate debt recovery, as appeared to be the case in the instant proceedings.
Consequently, the court struck out the suit and discharged all interim orders previously granted.
In earlier proceedings, the court had granted interim reliefs restraining the enforcement of the ex-parte orders and barring the administrator from acting in that capacity pending the determination of the substantive applications.
The court also issued a mandatory restorative injunction nullifying actions already taken pursuant to the disputed orders, including administrative directives and communications linked to the administrator’s appointment.
Eroton had argued that the orders were obtained without full disclosure of material facts, adding that allowing them to stand would prejudice its right to fair hearing, as guaranteed under Section 36 of the Constitution.
Thursday’s decision effectively restores the status quo ante, bringing an end to the administration process and reversing all steps taken under the now-vacated orders.