Ecobank Nigeria Limited V. Honeywell Flour Mills Plc (2018)

LAWGLOBAL HUB Lead Judgment Report

INYANG OKORO, J.S.C.

This is an appeal against the judgment of the Court of Appeal, Lagos Division delivered on 30th March, 2016 in Appeal No CA/L/1247/2015 wherein the Court below set aside the Ruling of the Learned Trial judge of the Federal High Court sitting in Lagos which refused to set aside ex-parte orders made against the Respondent herein. A brief facts of the case giving birth to this appeal may be stated thus:-

The Appellant herein, as plaintiff at the trial Federal High Court filed a petition on the 9th of November, 2015 and sought the following reliefs against the Respondent (as defendant):

“WHEREOF your petitioner therefore humbly prays as follows:-

(a) That HONEYWELL FLOUR MILLS PLC with Registration No. 55495 be WOUND-UP by the Court under the provisions of Sections 409(1) and 410(1) of Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria, 2004.

(b) Or such other Order (s) may be made in the premise as this Honourable Court consider just in circumstances.”

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Contemporaneous with the said petition, the Appellant filed a motion ex-parte on the same 9th November, 2015 seeking five orders against the Respondent and other parties. In a nutshell, the Appellant’s case was that the Oceanic Bank Plc (which it now has acquired with all its liabilities, rights and obligations) entered into an import finance facility/Revolving Product finance Facility and Overdraft facility agreement with the Respondent.

Sequel to the said acquisition, it embarked on a process of recovery of the huge sums of monies said to be owed by the Respondent as a result of the credit facilities. Sometimes in July, 2013, the Respondent, through the Chairman of Honeywell Group Limited, Oba Otudeko, proposed the payment of the sum of N3.5 Billion out of the N5.5 Billion owed by the Respondent and other sister companies under the Honeywell Group Limited.

The proposal by the Chairman of the Group to pay the sum of N3.5 Billion was accepted by the Appellant on certain conditions, part of which was the payment of the sum of N500 million immediately and the balance before the Central Bank of Nigeria (CBN) examiners left the bank on inspection as was clearly stated in the letters exchanged by the parties on the 22nd July, 2013 which

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is based on the in principle agreement.” The Respondent was fully aware that the Central Bank of Nigeria examiners would leave the bank by the end of August, 2013 and on the basis of which the concession to pay the sum of N3.5 Billion was made by the Appellant in order to balance its acquired accounts.

The Respondent subsequently defaulted in the bullet and staggered repayment of the indebtedness as suggested by Oba Otudeko, the Chairman of Honeywell Group Limited on behalf of the defaulting Respondent and other sister companies. This led to a series of correspondences and proposals by the Respondent urging the Appellant to accept the said sum of N3.5 Billion as full payment to settle the indebtedness and which proposal was not agreeable to the Appellant given the failure of the Respondent to honour the “in principle agreement ”

The intervention of the Bankers Committee and the sub-Committee on Ethics and Professionalism did not yield positive results and the Respondent took the option to institute an action in the Federal High Court, Lagos Division in suit No. FHC/L/CS/1219/2015.