Mercantile Bank Nigeria Plc V. Imesco Enterprises Limited (2016)

LawGlobal-Hub Lead Judgment Report

PAUL OBI ELECHI, J.C.A.

 This is an appeal against the Ruling of the High Court of Cross River State sitting at Calabar coram S.E.J. Ecoma C. J. of blessed memory delivered on the 21st November, 1995. The Lower Court on an application to withdraw the suit during trial, exercised discretion and dismissed the suit rather than merely strike it out as applied by the Appellant.

The Appellant bring dissatisfied with the above Ruling of the Court filed a Notice of Appeal on the 15th December, 1995.
However, owing to the re-structuring of the Appellant (Mercantile Bank Nigeria PLC) and subsequent taking over of same by their liquidator, the Nigeria Deposit Insurance Corporation (NDIC) the appeal was not prosecuted diligently until recently when the present Counsel B. E. Udo, Esq., took up the challenge and filed a motion for extension of time within which to file the Appellant?s brief. Thereafter, he filed Notice of Appeal containing three grounds and later added an additional ground making it altogether four.

?The facts leading to this case on appeal is that the Respondent obtained a loan from the defunct

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Mercantile Bank of Nigeria PLC (now called Mercantile Bank of Nigeria PLC – in liquidation) and failed to liquidate the loan. The Appellant in a bid to recover the loan filed a Suit – C/87/92 at the Calabar High Court Cross River State: In the course of hearing the suit the Bank became distressed and Nigeria Deposit Insurance Corporation (NDIC) was appointed as its liquidator.

With the advent of the Failed Banks Tribunal, the Nigeria Deposit Insurance Corporation (NDIC) instructed their solicitor – the firm of Paul Erokoro & Co. to discontinue the suit at the High Court and transfer same to the Failed Banks Tribunal for the accelerated hearing and determination of the suit.

However, when the Appellant applied to Court to discontinue the hearing and determination of the suit at the High Court the High Court instead of striking out the suit rather dismissed same on the 21st December, 1995.

?The NDIC as the liquidator to the Appellant instructed their Counsel to challenge the Ruling on appeal. Due to one reason or the other, the NDIC engaged the services of another Law firm – Edu-Uwem Chambers with B. E. Udoh as Solicitor to continue the

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prosecution of the said appeal.

From the statement of claim it is stated that the Respondent took a loan of N1,000,000.00 (One Million Naira) from the Appellant in October 1984. At the instance of the Respondent, the said loan facility was later increased to N5,000,000.00 (Five Million Naira) only. In the course of time, the Appellant took over the Respondents liability (debt) from the United Bank for Africa to the tune of N2,770,895,26 (Two Million, Seven Hundred and Seventy Thousand, Eight Hundred and Ninety Five Naira, Twenty Six Kobo) on the Respondent’s request. The Respondent further applied for an additional loan of N300,000.00 in September 1995 and it was granted. This therefore brought the total indebtedness to N6, 443,255.00 (Six Million, Four Hundred and Forty Three Thousand, Two Hundred and Eighty Five Naira) only as at September, 1985.

The Respondents have not liquidated the loan and all the accruing interest has raised the total indebtedness to the sum of N25,393,971 as at the tune of instituting this suit.

Thereafter, the Respondent makes frantic efforts to have the outstanding debt re-structured but to no avail.