The Irish principle of equitable receivership – a debt recovery bludgeon in the Nigerian soil?

Abstract

Recovery of debt is an aspect of the lending business that is both dicey and sometimes, very difficult. The Rule of Law operative in a particular clime largely determines the relative success of lenders and survival strategies. One of the remedies for debt recovery is the appointment of Receivers to realize the assets used as collaterals. In Nigeria, a Receiver may be appointed by the court or by the creditor pursuant to the agreement between the parties or pursuant to statutory provisions like the AMCON Act or the Companies and Allied Matters Act. When appointed other than by AMCON, the Receiver’s powers are only exercisable towards the assets under receivership; but when appointed by AMCON, the power of the Receiver applies to all the assets of the company. Despite the overwhelming powers of Receivers, recovery of debts succeeds in its entirety when there are readily available assets to satisfy the indebtedness. The Irish case discussed in this article goes beyond the assets of the debtor to deal with future incomes of a debtor in the nature of salaries, pensions, rents, et cetera. The article ended with recommendations necessary at the contract and enforcement stages.