Nigeria Deposit Insurance Corporation V. Rabo Farms Limited & Anor (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.(Delivering the Leading Judgment)

This is an appeal against the decision of the Federal High Court Lagos division Coram ARCHIBONG, J., wherein the Court in its judgment dated 3rd December, 2009 dismissed the claims of the Appellant.

The suit originated in the Failed Banks Tribunal, Zone II sitting in Lagos as suit No: FBFMT/L/ZII/34/96. It was instituted by Century Bank Limited against Rabo Farms Limited and another later taken over by Nigerian Deposit Insurance Corporation (Liquidator of Century Merchant Bank Limited). See pages 131-133 of the record of appeal.

The Failed Banks (Recovery of Debt and Fraud Malpractices in Banks) Decree No. 18 of 1994 having been listed in the Schedule of Decree No. 62 of 1999 as one of the amended Decrees, the Federal High Court assumed jurisdiction over cases involving failed banks. The facts of the case are that the 1st Respondent was a customer of Century Merchant Bank Limited and operated current account No: 70014 with the Bank (now NDIC).

The 1st Respondent obtained an approval for export credit facilities in the sum of N15,000,000.00 (Fifteen

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Million Naira) from the Appellant but the sum of N12, 985,339,57.00 was disbursed, even though the Appellant claimed it was N13,477,153,78.00. Same was granted by the 2nd Respondent vide personal guarantee/indemnity dated 28th February, 1991 interest rate was at 21percent per annum.

Respondent engaged the services of Mr. Etukudo, a Chartered Accountant to reconcile the accounts of the 1st Respondent, the said report was Exhibit ?9?, and the license of Century Merchant Bank was later revoked by Central Bank of Nigeria by Gazette dated 16th January, 1998.

The Appellant by its 4th Amended Application for Recovery of Debt dated 9th November, 1998 against the Respondent claimed as follows:

?The Appellant claims against the Respondent the sum of N69,911,137.28k being export credit facility interest and bank charges due as at 31st August 1996, the repayment which was guaranteed by the Respondent, and interest at the rate of 21% per annum until final payment?

The Appellant’s amended brief was settled by T. A. B. Oladipo of Babajide Oladipo & Co is dated and filed 30th September, 2016, wherein the Appellant settled 13

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issues for determination as follows:

1. “Whether an admission that the 1st Respondent was owing the sun of N44,141,786.24 or any other lower sum to Century Merchant Bank Limited as at 28th February, 1994 could be reasonably inferred from Exhibit 9 (Ground 1)
2. Whether the learned trial Judge was right when he failed to find the 2nd Respondent liable to the Appellant for the sum claimed, and to enter judgment against him accordingly. (Ground 2).
3. Was the learned trial Judge correct in not treating the evidence against the 2nd Respondent differently from that against the 1st Respondent, when Exhibit 5A received in evidence by the lower Court showed a distinct and separate contract between the bank and the 2nd Respondent? (Ground 3).
4. Whether, after having found that the 1st Respondent enjoyed overdraft facilities from Century Merchant Bank Limited, the learned trial Judge was nonetheless correct not to have held the Respondents liable to the Appellant for the sum claimed, when the dispute was not about the nature of the transaction between the parties, but the quantum of the debt. (Ground 4).
5. Whether, having regard to the

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