Ecobank Nigeria Limited scored a major victory at the Supreme Court on Friday as it won in a N5.5 billion debt dispute against Honeywell Flour Mills Limited and its sister firms: Anchorage Leisures Limited and Siloam Global Limited.
The Court dismissed an appeal by Honeywell challenging the Court of Appeal judgement in a debt dispute with Ecobank.
The five-member panel of the Supreme Court, led by Tijjani Abubakar, delivered the judgement that Honeywell, Anchorage and Siloam were indeed indebted to Ecobank.
In the lead judgement delivered by Emmanuel Agim, the Supreme Court declared the verdict of the Court of Appeal, which said Honeywell and its sister companies are still indebted to Ecobank.
Agim held: “I affirm the judgment of the Court of Appeal, setting aside the decision of the Federal High Court, granting the reliefs claimed for by the appellants (Honeywell).
“I hold that the appellants’ claim at the trial court fails and it is hereby dismissed.
“The appellants shall pay the cost of N1 million to the respondent (Ecobank).”
By the instant judgment of the apex court confirming the indebtedness of the named customers to the Bank, the Bank can now proceed to recover from the debtor-customers the total outstanding debt of N5.5 billion, including all the accrued interest from 2015.
In the wake of the legal tussle, Dr. Oba Otudeko, Chairman, Honeywell Group, had told a Court of Appeal that the sum was owed by individual companies.
These companies include Anchorage Leisures Limited, Siloam Limited and Honeywell Flour Mills Plc.
Otudeko maintained that his companies had paid N3.5 billion as of December 12, 2013 as the full and final payment for the N5.5 billion debt as agreed by the parties at a July 22, 2013 meeting.
With the latest Supreme Court judgement, the companies remain indebted to the Bank.
On August 6, 2015, Honeywell, and its sister firms: Anchorage Leisures Limited and Siloam Global Limited, sued Ecobank before the Federal High Court in Lagos over repayments of a N5.5 billion debt.
In the suit, the companies urged the Federal High Court in Lagos to declare that “having paid the sum of N3.5 billion in cumulative settlement of their total outstanding indebtedness” (of N5.5 billion) to Ecobank,”they owed no further debt obligation” to Ecobank “arising from their banker-customer relationships”.
As a result, they also asked the court to hold that Ecobank “was obligated to issue letters of discharge, release collaterals by which the prior indebtedness was secured”.
In addition, Honeywell and its sister companies begged the court to compel Ecobank to “update” their status on the”Credit Risk Management System Portal of the Central Bank of Nigeria”.
But in its defence, Ecobank argued that an agreement was reached between it, Honeywell, Anchorage and Siloam on July 22, 2013 “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 (Central Bank of Nigeria) examiners from” Ecobank’s offices.
Ecobank had contended that the repayment agreement period was for six months as it rejected Honeywell and its sister companies’ request to “pay the balance over a one-and-half-year period in three equal half-yearly instalments”.
The bank informed the court that the debt repayment agreement “lapsed in August 2013”.
But in its judgement, the judge, Ayokunle Faji of the Federal High Court, upheld the arguments of Honeywell Group and granted their prayers.
Dissatisfied with the verdict, Ecobank, in 2015, approached the Court of Appeal.
In its decision, the appellate court overturned the judgement of the Federal High Court, setting the stage for the Supreme Court appeal, which was resolved in favour of the Bank.
