COURT AWARDS N72BN AGAINST ECOBANK IN HONEYWELL’S FAVOUR
The Federal High Court has delivered a judgment in favor of Honeywell Flour Mills Plc in a protracted suit against Ecobank Nigeria, granting all four reliefs amounting to the sum of N72.2 billion.
According to details of the court proceedings seen by BusinessDay, Justice Mohammed Liman of the Federal High Court in Lagos in his ruling on Tuesday noted that “The plaintiff was denied the use of funds in his account based on the ex parte order granted in favour of the defendant.”
Honeywell had in 2018 filed a suit claiming the sum of N72 billion in damages from the bank for reputational losses suffered as a result of the asset-freezing ex-parte order.
The claims include foreign exchange devaluation loss, interest on unutilised cash balance, loss of revenue, and aggravated and exemplary damages.
“It is, therefore, my firm view that the plaintiff is entitled to the amount claimed in relief,” Justice Liman said in his ruling.
He added, “The argument of the defendant in his written address is therefore not acceptable as the contents of the document are the best evidence and they speak for themselves.”
The legal battle between Honeywell and Ecobank commenced in 2015 as a result of a dispute between the two companies over the terms of settlement of a debt, which the company owed the bank.
Honeywell had claimed that it had settled its outstanding debt to Ecobank having fulfilled its part of an agreement with the bank to pay the sum of N3.5 billion as full and final payment of the company’s obligation to the bank.
Ecobank, meanwhile, claimed that this agreement was not binding on the bank as its Board of Directors had not ratified the agreement, which was communicated to Honeywell by the Managing Director of the bank.
The bank also claimed that the payment was not made within the stipulated timeline. Seeking a resolution to the issue,
Honeywell sought the intervention of the Chartered Institute of Bankers of Nigeria’s (CIBN) Sub-Committee on Ethics and Professionalism (Bankers’ Committee), being the industry-accepted dispute resolution mechanism for resolving disputes between bankers and their customers.
The Bankers’ Committee is an organ made up of representatives from the Central Bank of Nigeria (CBN), CIBN, Nigeria Deposit Insurance Corporation (NDIC) and Managing Directors of Banks.
At the end of the review of the arguments adduced by Honeywell and Ecobank, the Bankers’ Committee ruled in Honeywell’s favour by resolving that the payment of N3.5 billion by Honeywell was indeed full and final settlement of its obligations to Ecobank and Honeywell was not indebted to Ecobank.
Not satisfied Ecobank asserted, through correspondence with the company, that the company was still indebted to the bank and also maintained the company’s name in the CBN’s credit risk management database portal for non-performing loan accounts.
Honeywell Group, therefore, sought the intervention of the courts to give effect to the decision reached at the Bankers’ Committee.
“The bank, through its lawyer, went on to institute several suits against Honeywell before multiple judges of the same Federal High Court, Lagos Judicial Division with all primarily being in respect of the same subject matter, seeking an order to freeze all the accounts of the company and deny the company access to all its funds with banks in Nigeria,” the Nigerian lawyer said in its publication.
Asides from Justice Mohammed Yunusa, who eventually granted the order, all the courts approached, requested the bank to put Honeywell on notice regarding the ex-parte order, which was applied for.
Honeywell is now claiming damages based on the order granted by Justice Yunusa claiming the move was designed primarily to injure its business and cause significant embarrassment to principals and officials of the company, according to Nigerianlawyer bulletin.
“The defendant’s arguments in this regard cannot stand.…… I have no hesitation in granting relief in favour of the plaintiff,” Justice Liman said.