Court Dismisses LIRS’ Suit Against Eroton, Vacates Administration Orders

Justice Akintayo Aluko of the Federal High Court in Lagos has dismissed the case filed by the Lagos State Internal Revenue Service (LIRS’) against Eroton Exploration and Production Limited, after verifying that the company had settled all its outstanding taxes.

Justice Aluko also lifted the previous interim orders that resulted in the appointment of an administrator for Eroton, effectively bringing the contentious administration process to an end.

During proceedings, Dr Joseph Nwobike (SAN) and colleagues from Osborne Law Practice represented Eroton and Bilton Energy Limited, while Jubril Kareem represented LIRS.

The counsel for the interim administrator, Sesugh Famave, appeared with Ogunwole Ebenezer and Kehinde Sanwade.

Adesewa Mojeed represented a party seeking to join the suit.

At the hearing, the interim administrator’s counsel asked for an adjournment pending a motion to join additional parties, supported by the applicant’s legal team.

Eroton’s lawyers opposed this, claiming it was an abuse of court process.

They pointed to an uncontested affidavit confirming that Eroton fully settled its debt to LIRS, supported by a letter from the Lagos Attorney General’s office stating that the company no longer owed any taxes.

Based on this, the defence argued that the case was moot, as the cause of action no longer existed; thus, the court lacked jurisdiction. They also stated that the interim administrator lacked the procedural standing to participate beyond the administration scope, considering his submissions misconceived.

Citing judicial authority such as South Atlantic Petroleum Ltd v Minister of Petroleum Resources (2023), the defence asked the court to dismiss the case and to lift all interim orders.

LIRS’s counsel confirmed that Eroton had settled its obligations and had no remaining claims.

Justice Aluko agreed, ruling the case was now academic because the debt had been paid and there was no active dispute. He also noted that the joinder application was invalid because there was no ongoing claim to justify adding a new party.

The judge emphasised that administration under CAMA 2020 aims to rescue struggling companies, not to pursue indiscriminate debt collection, as appeared in this case.

As a result, the court dismissed the suit, vacated all prior interim orders, and issued a restoration injunction nullifying actions taken under those orders, including directives issued by the administrator.