| Debtors & Recovery |     4374 VIEWS  |
| Debtors & Recovery | |
| 4374 VIEWS | |
 |
Tuesday, September 25, 2018 07:45AM / Thisday
The Supreme Court has upheld decision of the Court of Appeal, which dismissed the asset-freezing ex-parte order filed by Ecobank Plc against Honeywell Group at the Federal High Court in Lagos.
The apex court said the ex-parte order was
unduly obtained and a clear breach of the provisions of the winding up rules.
Armed with the victory, Honeywell has 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 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.
It is charged with the responsibility of sanitising the practice of
banking in Nigeria and promotion of discipline among practitioners, with part
of its duties being the resolution of issues emanating from normal
banker-customer relationships.
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 with this judgment, 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 CRMS 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.
Rather than allowing the case to go to trial, Ecobank, through its
lawyers sought an ex-parte order from the same Federal High Court.
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.
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.
However, Justice Yunusa eventually granted the ex-parte injunction
against Honeywell.
Following an appeal by Honeywell Group seeking a discharge of the order
granted by Justice Yunusa, the Court of Appeal, based on Honeywell’s
application dismissed the ex-parte injunction and even described the decision
as “exercise of discretion too extreme and injudicious to be allowed to
subsist.”
This position was further re-emphasised by the Supreme Court in the
final judgment, stating that the grant of the asset freezing order was a clear
breach of the provisions of the extant laws.
Honeywell is now claiming damages based on the losses it suffered as a
result of the ex-parte order, which the Supreme Court has now ruled was wrongly
obtained by Ecobank.
Honeywell’s claim is that the order granted by Justice Yunusa to the
bank was designed primarily to injure its business and cause significant
embarrassment to principals and officials of the company.
The company has also put forward evidence to the court to support its
application for damages it suffered as a result of the, now proven, wrong
order, which was in place for nearly six months until it was lifted by the
Court of Appeal.
Related News
1.
Alleged
N3.5bn debt: Ecobank loses appeal against Honeywell ... Aug 11, 2018
Signup with Facebook
Signup with Twitter
