Arita Pharmacuetical Limited & Ors v. Equitorial Trust Bank Plc & Ors (2023)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

MOHAMMED BABA IDRIS, JCA (Delivering the leading judgment)

This is an appeal against the judgment of the Federal High Court, Calabar Division delivered in suit No: FHC/CA/CS/55/2007 on the 25th day of May, 2016 by Honourable Justice Phoebe M. Ayua, J., in favour of the respondents herein.

By a writ of summons dated the 4th day of June, 2007, the appellants herein as plaintiffs before the lower court, filed this action against the respondents who were the defendants before the said court. The appellants thereafter amended their statement of claim and claimed against the respondents as follows:

1. A declaration that the plaintiffs are not indebted to the 1st defendant in that the debt is statute barred.
2. An order restraining the 1st and 2nd defendant from attempting to recover the alleged debt.
3. A declaration that the 2nd defendant has no right or power to recover debts legitimately owed in a transaction between a banker/customer.
4. An order of perpetual injunction restraining the 2nd defendant, its agent, privies or assigns from recovering or attempting to recover any alleged debt owed the 1st defendant, and/or arresting, detaining, investigating, intimidating the plaintiffs on any matter connected with Equitorial Trust Bank Plc.
5. 200 million naira, being special and general damages for frustration of contract and unlawful arrest and detention of the 2nd and 3rd plaintiffs by the 2nd defendant on the instructions of the 1st defendant.

The 1st respondent (Defendant) filed a statement of defense and counter-claimed as follows:

1. A declaration that the 1st plaintiff with its guarantors the 2nd and 3rd plaintiffs are indebted to the 1st defendant jointly and severally in the sum of N19,199,680.52 as at 31/5/2006 and interest thereof at the rate of 25% per annum from the said 31/5/2006 until the debt is repaid.
2. An order for the payment by the plaintiffs of the said debt of N19,199,680.52 as at 31/5/2006 and interest thereof at the rate of 25% per annum from 31/5/2006 until judgment debt is satisfied.

It is the case of the appellants before the trial court that the 1st respondent gave the 1st appellant credit facility of N20,000,000 upon the conditions in the letter of offer dated 3rd February, 1998. The 1st appellant accepted the offer upon the conditions and the 2nd and 3rd appellants signed and stamped the contract on behalf of the 1st appellant on the 9th of February, 1998. The 2nd and 3rd appellants were also authorized signatories to the 1st appellants account with the 1st respondent.

It is also the claim of the appellants that the sum of N5,000,000 only was disbursed to the 1st appellant and by a letter dated the 10th day of July, 1998 (Exhibit P3), the 1st respondent indicated its regret to inform the 1st appellant that considering the present portfolio constraint, further disbursed of the N20,000,000 Petroleum Trust Fund Contract facility granted to your company in February, 1998 would no longer be accommodated, and in the same letter, the 1st respondent asked the 1st appellant to make necessary arrangements to refund the N5,000,000 already disbursed as soon as possible.

It is the claim of the appellants that the 1st appellant paid part of the loan overdraft facility of N5,000,000, but did not complete the repayment, even after demands from the 1st respondent. The 1st respondent then wrote a petition to the 2nd respondent alleging fraudulent diversion of banks funds by the 2nd and 3rd appellants describing them as promoters of the 1st appellant.

The appellants also claims that the 2nd respondent invited the 2nd appellant for questioning and consequently, the appellants instituted the action at the trial court against the 1st and 2nd respondents.

At the trial of the matter, the appellants called 2 (two) witnesses, that is the 2nd and 3rd appellants, while the 1st respondent called 1 (one) witness Mr. Abimbade Olumide Dere and the 2nd respondent called 1 (one) witness Muhammed Musa.

The appellants witnesses tendered the following documents which were admitted in evidence and marked as exhibits P1 – P26 thus:

EXHIBIT P1 Offer letter dated 3/2/98

EXHIBIT P2 Domiciliation Letter from PTF

EXHIBIT P3 Letter from 1st defendant dated 10/7/98

EXHIBIT P4 Letter of demand from 1st defendant dated 20/5/99