The Supreme Court of Nigeria has affirmed the authority of the Asset Management Corporation of Nigeria (AMCON), to sell the Lagos Continental Hotel in Victoria Island, Lagos, bringing to an end a prolonged legal dispute involving financial institutions and corporate entities.
The ruling validates AMCON’s statutory powers to dispose of mortgaged assets acquired from non-performing loans and reinforces the legal framework governing debt recovery in Nigeria’s banking sector.
The apex court’s decision confirmed the sale of the hotel to 11 Hospitality Plc for ₦22 billion and overturned an earlier judgment by the Court of Appeal that had favoured the debtor, Milan Industries Limited. The judgment effectively settles a dispute that had lasted several years and clarifies the scope of AMCON’s powers under its enabling legislation.
Background of the Dispute
Financing of the Lagos Continental Hotel
The dispute originated from a credit facility granted by Polaris Bank Limited—formerly Skye Bank Plc—to Milan Industries Limited for the construction of the Lagos Continental Hotel located in Victoria Island, Lagos. The loan later became non-performing after the borrower failed to meet repayment obligations.
In September 2018, AMCON acquired the non-performing loan as an Eligible Bank Asset (EBA), from Polaris Bank. The acquisition was part of AMCON’s statutory mandate to purchase toxic debts from banks and recover such debts through asset management and disposal processes.
Before AMCON acquired the debt, Polaris Bank had already appointed Senior Advocate of Nigeria (SAN), Kunle Ogunba as Receiver/Manager over Milan Industries Limited in order to recover the outstanding debt. The receiver subsequently took control of the Lagos Continental Hotel under a registered Deed of Legal Mortgage securing the facility.
Sale of the Hotel
Following its acquisition of the loan, AMCON validated the appointment of the Receiver/Manager and proceeded to exercise its rights as a secured creditor. The corporation eventually sold the Lagos Continental Hotel to 11 Hospitality Plc for ₦22 billion.
The sale was conducted pursuant to the Deed of Legal Mortgage that secured the credit facility. According to AMCON, the transaction was necessary to recover the debt owed by Milan Industries Limited after repeated defaults on repayment obligations.
However, Milan Industries challenged the disposal of the hotel, arguing that AMCON lacked the authority to sell the asset under the circumstances. This challenge initiated a series of legal battles that moved through several levels of Nigeria’s judicial system.
Legal Proceedings
Federal High Court
The initial lawsuit, filed by Milan Industries Limited, was instituted at the Federal High Court under Suit No. FHC/L/CS/1643/2020. The company sought to invalidate the sale of the hotel and challenge AMCON’s authority to dispose of the collateral.
The Federal High Court dismissed the suit, ruling in favour of AMCON and its co-defendants.
Court of Appeal
Dissatisfied with the Federal High Court’s decision, Milan Industries appealed to the Court of Appeal. The appellate court overturned the lower court’s ruling and gave judgment in favour of Milan Industries Limited, effectively questioning the validity of AMCON’s actions.
Supreme Court
AMCON, Polaris Bank, and 11 Hospitality Plc subsequently appealed the Court of Appeal’s judgment to the Supreme Court.
On February 20, 2026, the Supreme Court delivered its final judgment, setting aside the Court of Appeal’s decision and restoring the earlier ruling that validated the sale of the Lagos Continental Hotel.
Key Issues Determined by the Supreme Court
Interpretation of the AMCON Act
The Supreme Court held that the AMCON Act is a special piece of legislation designed to address challenges in Nigeria’s financial system, particularly the problem of non-performing loans. As a result, the Act must be interpreted in a way that supports its purpose of stabilising the banking sector.
AMCON’s Rights as Mortgagee
The court affirmed that AMCON, as a mortgagee, has the legal authority to enforce security over mortgaged assets when debts remain unpaid. It ruled that AMCON retains a continuing security interest in mortgaged properties until the outstanding debt is fully settled.
Stamp Duty Exemption
The Supreme Court also upheld Section 60 of the AMCON Act, which exempts the corporation from paying stamp duties on certain transactions related to debt recovery. This provision further strengthens AMCON’s operational powers in asset recovery processes.
Implications of the Judgment
Strengthening Debt Recovery Framework
The ruling reinforces AMCON’s legal authority to recover debts through the disposal of collateral assets. By confirming the corporation’s powers, the judgment strengthens mechanisms for dealing with toxic loans within the Nigerian banking system.
Boosting Investor Confidence
By resolving a prolonged legal dispute and confirming the validity of the sale to 11 Hospitality Plc, the decision provides greater certainty for investors involved in asset acquisitions from financial institutions or government agencies.
Precedent for Future Cases
The case establishes an important legal precedent regarding the interpretation of the AMCON Act and the rights of secured creditors. Courts in future disputes involving AMCON or similar institutions may rely on this judgment as guiding authority.
Conclusion
The Supreme Court’s affirmation of AMCON’s sale of the Lagos Continental Hotel marks the final resolution of a complex legal battle involving debt recovery, mortgage rights, and statutory interpretation. By validating AMCON’s actions and overturning the Court of Appeal’s decision, the apex court has reinforced the legal framework governing non-performing loan recovery in Nigeria.
The judgment not only secures the ownership of the hotel by 11 Hospitality Plc but also strengthens AMCON’s mandate to stabilise the financial sector through effective asset management and debt recovery mechanisms.
