Ecobank Nigeria Limited won a N5.5 billion debt dispute at the Supreme Court on Friday against Honeywell Flour Mills Limited and its sister firms, Anchorage Leisures Limited and Siloam Global Limited.
The Supreme Court dismissed Honeywell’s appeal challenging the Court of Appeal judgment, which was in favour of Ecobank.
The five-member panel of the Supreme Court, led by Justice Tijjani Abubakar ruled that Honeywell, Anchorage and Siloam were indeed indebted to Ecobank.
In the lead judgment delivered by Justice Emmanuel Agim, the Supreme Court affirmed the verdict of the Court of Appeal, which said Honeywell and its sister companies are still indebted to Ecobank.
“I affirm the judgment of the Court of Appeal, setting aside the decision of the Federal High Court, granting the reliefs claimed for by the appellants (Honeywell). I hold that the appellants’ claim at the trial court fails and it is hereby dismissed. The appellants shall pay the cost of N1 million to the respondent (Ecobank)”, Agim said.
In the wake of the legal tussle, Honeywell Group Chairman, Dr Oba Otudeko had told a Court of Appeal that the sum was owed by individual companies, which include Anchorage Leisures Limited, Siloam Limited, and Honeywell Flour Mills Plc.
Otudeko maintained that his companies had paid N3.5 billion as of 12 December 2013, as the full and final payment for the N5.5 billion debt, as agreed by the parties at a 22 July 2013 meeting.
On 6 August 2015, Honeywell, and its sister firms, Anchorage Leisures Limited and Siloam Global Limited sued Ecobank at the Federal High Court in Lagos over repayments of a N5.5 billion debt. In the suit, the companies urged the court to declare that “having paid the sum of N3.5 billion in cumulative settlement of their total outstanding indebtedness” (of N5.5 billion) to Ecobank, “they owned no further debt obligation” to Ecobank “arising from their banker-customer relationships”.
As a result, they also asked the court to hold that Ecobank “was obligated to issue letters of discharge, release collaterals by which the prior indebtedness was secured.” In addition, Honeywell and its sister companies prayed the court to compel Ecobank to “update” their status on the “Credit Risk Management System Portal of the Central Bank of Nigeria”.
But in its defence, Ecobank argued that an agreement was reached between it, Honeywell, Anchorage and Siloam on 22 July 2013 “for a definite settlement of N3.5 billion to be paid in terms of N500 million immediately and the balance of N3 billion before the exit of the CBN examiners from” Ecobank’s offices.
Ecobank had contended that the repayment agreement period was for six months as it rejected Honeywell and its sister companies’ request to “pay the balance over a one-and-half-year period in three equal half-yearly instalments”.
The bank informed the court that the debt repayment agreement “lapsed in August 2013″.
In his judgement, Justice Ayokunle Faji of the Federal High Court upheld the arguments of the Honeywell Group and granted their prayers.
Dissatisfied with the verdict, Ecobank approached the Court of Appeal in 2015. In its decision, the appellate court overturned the judgment of the Federal High Court, setting the stage for the Supreme Court’s appeal which was resolved in favour of the bank.
