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Ecobank won a major victory in the High Court on Friday, winning a N$5.5 billion debt dispute against Honeywell and its sister companies Anchorage Leisures Ltd and Siloam Global Ltd.
The Supreme Court dismissed an appeal by Honeywell Flour Mills Limited against the Court of Appeals ruling in the debt dispute with Ecobank Nigeria Limited.
The five-member Supreme Court panel, led by Justice Tijjani Abubakar, ruled that Honeywell, Anchorage and Siloam were indeed indebted to Ecobank.
In the leading judgment delivered by Judge Emmanuel Agim, the Supreme Court announced the Court of Appeals’ ruling that Honeywell and its sister companies still owe Ecobank.
“I affirm the Court of Appeals’ judgment overturning the Federal Court’s decision and granting the reliefs sought by the applicants (Honeywell).
“I am of the opinion that the applicant’s action in the trial court is unsuccessful and is hereby dismissed. “The complainants must pay the costs of N1 million to the defendant (Ecobank),” Judge Agim said.
With the Supreme Court’s immediate ruling confirming the indebtedness of the named customers to the bank, the lender can now recover from the debtor customers the total outstanding debt of N5.5 billion, including all interest accrued in 2015.
After the lawsuit, Mr. Oba Otudeko, chairman of the Honeywell Group, told an appeals court that the sum was owed by individual companies. These companies include Anchorage Leisures Limited, Siloam Limited and Honeywell Flour Mills Plc.
Mr Otudeko claimed that by December 12, 2013, his companies had paid N3.5 billion in full and final payment for the debt of N5.5 billion, as agreed by the parties at a meeting on July 22, 2013. With the latest BGH ruling, the companies remain indebted to the bank.
background
On August 6, 2015, Honeywell and its sister companies Anchorage Leisures Ltd and Siloam Global Ltd sued Ecobank in the Lagos Federal High Court for repayment of a N5.5 billion debt.
In the lawsuit, the companies urged the Lagos Supreme Court to state that “after paying the sum of N3.5 billion to cumulatively settle their total outstanding debt” (of N5.5 billion) to Ecobank, “they no longer had debt obligations” to Ecobank “resulting from their banker-customer relationships.”
As a result, they also asked the court to find that Ecobank was “obliged to issue relief orders, to release collateral securing the pre-indebtedness.” Additionally, Honeywell and its sister companies asked the court to force Ecobank to “update” its status on the Credit Risk Management System Portal of the Central Bank of Nigeria.
But in her defense, Ecobank argued that an agreement was reached between her, Honeywell, Anchorage and Siloam on July 22, 2013 “for a final settlement of N3.5 billion, to be settled immediately in the form of N500 million and the Remainder of N3 is to be paid billions before CBN auditors exit Ecobank offices. Ecobank had claimed that the term of the repayment agreement was six months because it had rejected Honeywell and its sister companies’ request to “pay the balance in three equal semi-annual installments over a period of a year and a half.”
The bank told the court that the debt settlement agreement “expired in August 2013.” But in his ruling, Federal Court Judge Ayokunle Faji upheld the Honeywell group’s arguments and answered their prayers.
Dissatisfied with the verdict, Ecobank appealed to the Court of Appeal in 2015. The Court of Appeals’ decision overturned the Federal Court’s ruling, preparing the ground for the Supreme Court’s appeal, which ruled in favor of the bank.
