July 19, (THEWILL) – The Federal High Court in Lagos on Tuesday, July 8, 2023 slammed a N72 billion damages against Ecobank Nigeria in a matter that has been at the centre of business discussions in recent times.
THEWILL recalls that the case started when Ecobank obtained ex-parte orders from the Federal High Court, led by Hon. Justice Yunusa, in November 2015 to freeze Honeywell Flour Mills’ assets, including its bank accounts
Honeywell Flour Mills (HFM) immediately applied to have the orders lifted, with the court then varying the orders, allowing the company limited access to its accounts.
However, following an appeal by HFM in 2016, the Appellate Court fully overturned the ex-parte orders, restoring HFM’s right to operate its accounts.
In its ruling, the Court of Appeal concluded that Ecobank’s request to freeze the assets by an ex parte order was unconstitutional.
The Supreme Court subsequently upheld the Court of Appeal’s judgement. Following the Supreme Court pronouncement, the company sought to enforce the oath sworn by Ecobank that it would indemnify HFM of any loss suffered if the ex-parte orders were deemed frivolous
Ecobank’s attempt to argue against enforcement did not help its cause as Justice Liman of the Federal High Court, on Tuesday ruled that the defendant’s arguments in the matter cannot stand.
The presiding Judge therefore ruled in favour of the plaintiff, noting, “I have no hesitation in granting relief in favour of the plaintiff.”
Reacting to the judgement, Bode Olanipekun, SAN, commended the court stating that – “it’s a commendable decision and precedent in an area of our jurisprudence that has been scarcely tested.
\”The court has awarded damages in a claim brought on the premise of an undertaking given for the grant of ex parte orders which both the Court of Appeal and Supreme Court have found were improperly sought and granted.”
Ecobank Nigeria had written FBN Holdings Plc, asking the financial services group not to recognise the 4.8 billion shares recently acquired by the bank’s former chairman, Oba Otudeko.
The local unit of the Lomé-based Ecobank Transnational Incorporated made the request through its solicitor, ‘Kunle Ogunba & Associates, in a letter dated 7 July 2023.
The solicitor noted that the bank made the request because of Mr Otudeko’s failure to clear a debt totalling N13.5 billion.
Ecobank noted that it initiated a legal action against Honeywell Group Limited, Anchorage Leisures Limited, Siloam Global Services Limited and Mr Otudeko at the Federal High Court in Lagos, aimed at recovering the debt.
According to the document, the four disputed their indebtedness to Ecobank, but a Supreme Court judgment on 27 January 2023, affirmed the indebtedness, ordering them to pay N13.5 billion from the loan contract said to be personally guaranteed by Mr Otudeko.
Ecobank further noted that it initiated a legal action against Honeywell Group Limited, Anchorage Leisures Limited, Siloam Global Services Limited and Mr Otudeko at the Federal High Court in Lagos, aimed at recovering the debt
Wole Olanipekun & Co, the legal representatives of Dr. Oba Otudeko, Chairman of Honeywell Group Limited, have issued a response to the letter from Ecobank Nigeria Limited regarding the recognition of shares transferred to Barbican Capital Limited.
The law firm, on behalf of Dr. Oba Otudeko, urged FBN Holdings PLC to disregard the requests made in Ecobank’s letter.
The recent judgement by the Federal High Court in Ikoyi – Lagos provided a new dimension to the matter following the award of a staggering N72.2 billion in damages against Ecobank.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
