The Supreme Court has decided in favour of Ecobank Nigeria Limited in a N5.5 billion debt dispute against Honeywell and its sister firms, Anchorage Leisures Ltd. and Siloam Global Ltd.
The Supreme Court last Friday dismissed an appeal by Honeywell Flour Mills Limited challenging the judgement of the Court of Appeal in the debt dispute with the bank.
The five-member panel of the Supreme Court, led by Justice Tijjani Abubakar, held that Honeywell, Anchorage, and Siloam were indeed indebted to Ecobank.
In the lead judgement delivered by Justice Emmanuel Agim, the apex Court agreed with the verdict of the Court of Appeal, which held that Honeywell and its sister companies were 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),” Justice Agim said.
By the instant judgment of the apex court confirming the indebtedness of the named customers to the Bank, the Bank can now proceed to recover from the debtor-customers the total outstanding debt of N5.5Billion, including all the accrued interest from 2015.
During the legal tussle, Oba Otudeko, Honeywell Group chairman, had told a Court of Appeal that the sum was owed by individual companies.
These companies include Anchorage Leisures Limited, Siloam Limited, and Honeywell Flour Mills Plc.
Otudeko maintained that his companies had paid N3.5 billion as of December 12, 2013, as the full and final payment for the N5.5 billion debt as agreed by the parties at a July 22, 2013 meeting.
With the latest Supreme Court judgement, the companies remain indebted to the Ecobank.
On 6th August 2015, Honeywell, and its sister firms, Anchorage Leisures Ltd and Siloam Global Ltd, sued Ecobank before the Federal High Court in Lagos over repayments of a N5.5 billion debt.
In the suit, the companies urged the Federal High 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 owed no further debt obligation” to the bank “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 begged 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 22nd 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 installments.”
The bank informed the court that the debt repayment agreement “lapsed in August 2013.”
But in its judgment, the judge, Justice Ayokunle Faji of the Federal High Court, upheld the arguments of the Honeywell Group and granted their prayers.
Dissatisfied with the verdict, Ecobank in 2015, approached the Court of Appeal.
In its decision, the appellate court overturned the judgement of the Federal High Court, setting the stage for the Supreme Court’s appeal which has now been resolved in favour of Ecobank.