Longterm Global Capital Ltd & Anor v. Stanbic IBTC Bank Plc (2022)

LAWGLOBAL HUB Lead Judgment Report – SUPREME COURT

ABDU ABOKI, J.S.C. (Delivering the Lead Judgment)

This appeal is against the ruling delivered by the Court of Appeal, Lagos Division, (hereafter called the Court below, or the lower Court), on the 16th of June, 2021, in Appeal No: CA/L/245/2011: STANBIC IBTC BANK LTD v. LONGTERM GLOBAL CAPITAL LTD & 2 ORS.

The facts and circumstances surrounding the appeal can be summarized as follows: The 1st Appellant is a Limited Liability Company with the Registered Head Office thereof situated at No. 5 Ayodele Street, Off Iwaya Road, Onike Yaba, Lagos.

The 1st Appellant was hitherto known as LONGTERM VENTURES LIMITED However, it later changed its name to LONGTERM GLOBAL CAPITAL LIMITED. The 2nd Appellant is the Chairman, and Chief Executive Officer (CEO), of the 1st Appellant.

The Respondent is a commercial bank licensed under the Nigerian Laws to carry out banking business. The Respondent has its registered office at IBTC Place, Walter Island, Lagos.

It equally has several other branches in the country, including the ones at Plot 10712, Idejo Street, Victoria Island, Lagos and at 70, Adetokunbo Ademola Street, Victoria Island, Lagos. It was hitherto known as IBTC Chartered (Bank) Plc, but later changed the name thereof to STANBIC IBTC BANK PLC.

The story of the Respondent is that on April 11, 2007, the Respondent granted an overdraft facility of N600 Million to the 1st Appellant for a tenor of 365 days and an option of rollover amongst other terms. Also, on May 11, 2007 and July 17, 2007, it further granted two additional overdraft facilities to the 2nd Appellant in the sums of N400 Million and N250 Million respectively, for tenors of 365 days, and with options of rollover, amongst other terms.

At the expiration of the respective overdraft facilities granted to the Appellants, the Respondent granted an extension to them to liquidate the facilities. Subsequently, the 2nd Appellant applied that the facility granted to him be merged with that of the 1st Appellant.

However, the case of the Appellants is that they have liquidated the overdraft facilities granted thereto by the Respondent. Thus, in consequence of the Respondent’s refusal to release the Appellants’ shares pledged for the overdraft facilities granted thereto, the Appellants deemed it expedient to institute SUIT NO: FHC/L/CS/1491/2009, at the Trial Federal High Court, Lagos Division.

By the endorsements to the Writ of Summons and Paragraph 50 (1 -14) of the Statement of Claim Appellants sought against the Respondents and others, the following reliefs:

50. WHEREOF the Plaintiffs jointly and severally claim against the Defendant as follows:
    (1) A declaration that as at 8/7/2009, the Defendant was indebted to the Plaintiffs in the sum of N170,304,096.79, being the shortfall arising from the unconscionable and negligent sale of 28,745,400 units of Guaranty Trust Bank Plc shares owned by the Plaintiffs.
    (2) A declaration that the Defendant is indebted to the Plaintiffs in the sum of 05, 725,180.87, being the outstanding excess of interest charges debited to the Plaintiffs’ accounts by the Defendant.
    (3) A declaration that the Defendant is also indebted to the 1st Plaintiff in the sum of N245, 729.49 being the cash deposit which was not credited to the 1st Plaintiff’s account on 2/11/2008, with accrued interest at the rate of 16% per annum from 21/10/2009 when an official demand letter was written to the Defendant in that regard till date.

(4) A declaration that the Plaintiffs are entitled to offset their indebtedness to the Defendant with all the sums referred to in reliefs 1, 2 and 3 above, which were due to the Plaintiffs at the relevant time.

(5) A declaration that based on all the sums due to the Plaintiffs as enumerated in Paragraph 37 of the statement of claim, the Plaintiffs have fully and finally discharged all their obligation to the Defendant in respect of the overdraft facilities.

(6) A declaration that the Defendant is not entitled to charge interest on the overdraft facilities granted to the Plaintiffs with effect from 31/10/2009.

(7) An Order of perpetual injunction restraining the Defendant, either by itself or through its servants, agents, privies, subsidiaries or successors-in-title, from selling, disposing, charging or encumbering in anyway whatsoever, the shares listed in Paragraph (38) above.