In a case involving Honeywell Flour Mills Plc and two other businesses and unresolved debt with Ecobank, the Supreme Court confirmed an earlier decision of the Court of Appeal.
With regards to the settlement of a N5.5 billion debt, Honeywell and its sibling companies, Anchorage Leisures Ltd. and Siloam Global Ltd., have been at odds with their bank, Ecobank.
Despite the three businesses’ claims that they had paid the bank N3.5 billion in full payment of their obligation, Ecobank asserted that they were still owed the money.
In a verdict released on Friday, a five-member panel of the Supreme Court backed the arguments put out by Ecobank’s attorney, Kunle Ogunba (SAN), and reaffirmed an earlier ruling by the Lagos Appeal Court that had invalidated the Federal High Court’s ruling from May 21, 2019.
Emmanuel Agim, who wrote the lead judgment, decided two of the three questions in favor of the appellants and one in favor of the respondent.
In concluding that the appellants lacked locus standi to have filed the lawsuit at the Federal High Court in Lagos, Justice Agim criticised the Court of Appeal.
He said that it was incorrect for the Court of Appeal to rule that the trial court lacked jurisdiction to consider Honeywell’s case.
“This appeal succeeds in part with regard to problems one and two, but fails with regard to issue three,” said Justice Agim.
“Therefore, I hold that the trial court has jurisdiction to decide the suit and that the appellants have locus standi to bring it.
“I uphold the Court of Appeal’s ruling overturning the Federal High Court’s order granting the appellants’ requested reliefs.
“I hold that the trial court’s decision dismissing the appellants’ claim was incorrect.
“The appellants shall reimburse the respondent for the cost of N1 million.
“The cross appeal was incorporated into the main appeal’s argument. It is out of date,” Justice Agim declared.
On August 6, 2015, Honeywell, Anchorage, and Siloam filed a lawsuit against Ecobank in front of the Federal High Court in Lagos about payment of the N5.5 billion debt.
The companies asked the trial court to rule that since “they held no further financial obligation” to Ecobank “arising from their banker-customer relationships” after “paying the sum of N3.5 billion in cumulative settlement of their total outstanding indebtedness” (of N5.5 billion) to Ecobank.
They said that Ecobank “was required to give letters of discharge, release collaterals by which the earlier debts was secured,” and they asked the court to rule in their favor.
Forcing Ecobank to “update” its status on the “Credit Risk Management System Portal of the Central Bank of Nigeria,” the three companies asked the court for permission.
In response, Ecobank claimed that on July 22, 2013, a settlement of N3.5 billion was agreed upon between it and the three companies, “for a definite settlement of N3.5 billion to be paid in terms of N500 million immediately and the balance of N3 billion before the exit of the CBN examiners from” Ecobank’s offices.
In response to Honeywell and its sister firms’ request to “pay the debt over a one and a half year term in three equal half-yearly installments,” Ecobank claimed that the repayment arrangement time was for six months.
Among other things, the bank claimed that the debt repayment arrangement “lapsed in August 2013.”
Justice Ayokunle Faji of the Federal High Court in Lagos ruled in the firms’ favor and granted all of their requests for relief.
The Federal High Court’s ruling was overturned by the Court of Appeal in Lagos after Ecobank filed an appeal of the ruling there.
