Meak Investment Limited & Ors v. Keystone Bank Plc(Formerly Platinum Habib Bank Plc) (2024)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

PETER CHUDI OBIORAH, JCA (Delivering the leading judgment)

This is an appeal against the judgment of the High Court of the Federal Capital Territory, Abuja, delivered on the 22nd day of May, 2014 by Honourable Justice A. S. Umar.

The 2nd appellant is the alter ego of the 1st appellant. The 1st appellant as a customer of the respondent sought and obtained an overdraft facility of N3,500,000.00 which it secured with share certificates of certain companies as collateral.

The overdraft which was approved on 3rd December, 2007 was a for a duration of 90 days. Following the expiration of the facility on 3rd March, 2008, the appellants by a letter dated 18th March, 2008 instructed the respondent to sell the shares deposited as security for the overdraft facility to clear the overdraft and credit the balance to them.

The respondent did not carry out the sale as instructed by the appellants on the basis that the appellants had subsequently applied for a roll-over of the overdraft and an increase to N5,000,000.00 using the same share certificates as collateral which the respondent granted and in effect invalidated the initial instruction to sell the shares.

Consequently, the 1st appellant initiated legal action against the respondent whereby it sought the following reliefs:

a. A declaration of this honourable court that the defendant was negligent by her failure, refusal or neglect to comply with the plaintiffs instructions of 18th March, 2008 in line with standard banking practices, authorizing the defendant to dispose of her shares used as collateral for the overdraft facility.

b. A declaration of this honourable court that the failure of the defendant to comply with the plaintiff’s instructions of 18th March, 2008 in line with standard banking practices, authorizing the defendant to dispose of its shares used as collateral for the overdraft facility amounted to a breach of duty which the defendant owes its customers.

c. A declaration that as a result of the defendant’s failure, refusal or neglect to dispose of the shares and liquidate the overdraft facility as instructed plunged the plaintiff into loses.

d. A declaration that the plaintiff is not liable to the defendant for any interest charged on her account as accruable to the defendant as a result of non-liquidation of the overdraft facility.

e. A declaration that the plaintiff is entitled to the sum equal to the market value of all the shares used as collateral for the overdraft facility as at 19th March, 2008.

f. An order of this honourable court compelling the defendant to credit the plaintiff’s account with the sum of N8,282,845.00 (Eight million, two hundred and eighty-two thousand, eight hundred and forty-five naira) only, being the total market value of all shares used as collateral for the overdraft facility.

g. The sum of N20,000,000.00 (Twenty million naira) being general damages against the defendant negligence, breach of duty, frustration and loses it caused the plaintiffs business.

h. 18% compound interest every month from when the defendant started debiting the account of the plaintiff unlawfully until judgment is delivered.