Mutual Benefits winding petition seeks to dissolve oil firm over ₦10bn and \$36m debt, citing default on consent judgment amid bitter legal dispute

Mutual Benefits winding petition has triggered a high-stakes legal battle in Nigeria’s commercial capital, as the insurance powerhouse seeks to dissolve Prime Exploration and Production Limited over an alleged judgment debt exceeding ₦10 billion and \$36 million.

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The winding-up petition was jointly filed before the Federal High Court in Lagos by Mutual Benefits Assurance Plc and its associate firm, Mutual Exploration and Production Limited.

According to court documents submitted through their counsel, Senior Advocate of Nigeria Gboyega Oyewole, the debt in question originated from a series of loans and advances to the oil firm.

These liabilities were later consolidated under a consent judgment in Suit No. LD/2864GCM/2021, based on a negotiated settlement dated November 10, 2023.

The petitioners allege that Prime Exploration has defaulted on its obligations under the judgment, which pegged the liability at ₦5.72 billion and \$27.7 million, accruing 15% annual interest on the naira portion from January 1, 2022.

As of February 28, 2025, they claim the total outstanding debt had risen to ₦10,062,715,955 and \$36,492,546.

In the affidavit deposed by Inyene Docars Ntuk, Legal Manager at Mutual Benefits, the company asserts that Prime Exploration’s refusal to honour its obligations signals insolvency.

“The Respondent has failed, refused, and/or neglected to pay its outstanding indebtedness to the Petitioners,” the affidavit reads. “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, Mutual Benefits is asking the court to wind up Prime Exploration and appoint a liquidator to manage its affairs.

However, the oil company has pushed back forcefully. In a counter-affidavit filed by Ikechukwu Oleru of Oditha Legal Practitioners, Prime Exploration described the petition as “a veiled attempt to harass the Respondent.”

The company argues that the debt is not yet due and payable, citing an unresolved reconciliation process stipulated in the consent judgment.

The counter-affidavit points to three key conditions that must be satisfied before payment can be enforced. First is the ascertainment of alleged unpaid cash calls owed by Mutual Benefits dating back to June 2008.

Second is the application of any amounts owed to Prime Exploration as a set-off against the current debt. Lastly, a final reconciliation must be completed to determine whether a net balance remains.

“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 oil company stated in its response.

Additionally, Prime Exploration raised procedural concerns, arguing that the verifying affidavit filed by Mutual Benefits fails to comply with Rule 18 of the Companies Winding-Up Rules, 2001. Based on this, the company has urged the court to dismiss or strike out the petition.

As the case progresses, legal analysts say it could set a significant precedent for corporate debt enforcement and the interpretation of consent judgments in Nigeria’s commercial courts. The outcome will be closely watched by stakeholders across the financial and energy sectors.

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“The sheer size of the debt and the reputations involved guarantee national attention,” said a Lagos-based insolvency lawyer who preferred not to be named. “It’s a test of legal clarity on when a consent judgment becomes enforceable and how disputes over set-offs should be handled.”