Lagos Federal High Court strikes out LIRS suit against Eroton after tax settlement

A Federal High Court in Lagos has dismissed a suit filed by the Lagos State Internal Revenue Service LIRS against Eroton Exploration and Production Limited. Justice Akintayo Aluko ruled that Eroton's full payment of its outstanding tax liabilities extinguished the LIRS's cause of action, rendering the suit academic and removing the court's jurisdiction. The court also vacated all interim orders, including those appointing an administrator over Eroton, effectively ending the administration process. Counsel for Eroton, Dr. Joseph Nwobike SAN, argued that the tax settlement, confirmed by a letter from the Office of the Attorney-General of Lagos State, meant there was no longer a dispute. The LIRS counsel, Jubril Kareem, confirmed that Eroton had settled its obligations. Justice Aluko also deemed an application for joinder incompetent due to the absence of a subsisting cause of action, clarifying that administration under the Companies and Allied Matters Act, 2020, is a rescue mechanism for distressed companies, not for indiscriminate debt recovery. The ruling restored the parties to their status quo ante, nullifying previous administrative actions and communications.