Societe Generale Favouriser Le Development Du Commerce Et De L’ Industrie En France V. Societe Generale Bank (Nigeria) Limited (1997)

LAWGLOBAL HUB Lead Judgment Report

E. OGUNDARE, J.S.C.

Sometime in 1976 Dr. Abubakar Sola Saraki, Dr. E.A. Ikomi, Mr. N.A.B. Kotoye and Societe General Favouriser Le Development du Commerce et de L’industrie en France (who is the appellant in the appeal now before us and shall hereinafter be referred to as the appellant) agreed to form a bank in Nigeria to be known as Societe Generale Bank (Nigeria) Limited. On 7th July, 1976 the three gentlemen and the appellant executed a written agreement wherein the parties are referred to as “founders” of the bank to be incorporated. The agreement contains a number of articles, one of which, Article 11 provides:

“If any difference or dispute shall arise between the parties as to the construction of the agreement or as to any matter or thing of whatsoever nature arising thereunder, or in connection thereunder, or in connection therewith, such dispute or difference, shall be referred to the Arbitration and final decision of a person to be agreed between the Parties or failing Agreement within 14 days (fourteen) after either party has given to the other a written request to concur in the appointment of an Arbitrator, a person to be appointed on the request of either party by the President of the International Chambers of Commerce in Paris according to its rule.”

The bank was incorporated, under the Companies Act, 1968, in December, 1976. At a meeting of the Board of Directors of the new bank, id est, Societe Generale Bank (Nigeria) Ltd. (hereinafter referred to as the respondent) the agreement of the 7th July 1976 was ratified. The appellant acted as Managers to the new bank.

It would appear that the relationship between the appellant and the respondent soured in consequence of which the latter terminated the management arrangement and instituted an action in 1989 at the High Court of Lagos State, against the appellant claiming as per paragraph 27 of its Statement of Claim as hereunder:

“Whereof the plaintiff claims as follows:

A(i) N163,347,309,52k, being amount lost by the plaintiff as a result of mismanagement/ negligence by the defendant of the credit facilities granted by the plaintiff on the advice of the defendant – See paragraphs 10 to 13 of Claim.

(ii) N10 million; being loss of interest on the amount deposited with Central Bank of Nigeria free of interest – See paragraph 15 of Claim.

(iii) N1 million, being amount paid as penalties and fines for contravention of Central Bank of Nigeria’s guidelines and provisions of the Banking Act – see paragraph 13 of Claim.

(iv) FF 20,750,000 or its Naira equivalent, being amount taken out of the plaintiff’s account by the defendant without authority – See paragraph 16 of Claim.

(v) N16,883,000.00 being the amount received by the defendant from Silos, a subsidiary of Doumeng Group which amount was not reflected in the plaintiff’s books.

(vi) interest on the amounts claimed in A(i) to A(v) hereof at the rate of 18% from the date of Writ until payment.

An order directing the defendant to disclose the account numbers of the various accounts kept by the defendant overseas in the name of the plaintiff and/or on its behalf.

An account of monies kept by the defendant in the plaintiff’s name in the defendant’s Branches in London, Paris and other places in Europe and elsewhere.”