N7.1bn LC Dispute: Firm Drags Parallex Bank to Court, Seeks Order Freezing Bank’s Funds Nationwide

Wale Igbintade 

A Lagos-based equipment and logistics company, FHT Mega Express Limited, has filed an ex parte application before the High Court of Lagos State seeking sweeping preservatory orders against Parallex Bank Limited over an escalating dispute involving N7.154 billion deposited for the establishment of Letters of Credit (LCs).

In the application filed pursuant to the Pre-Emptive Remedies Protocol of the Expeditious Disposal of Civil Cases Practice Direction, the company is asking the court to direct all financial institutions in Nigeria to freeze and withhold all funds standing to the credit of Parallex Bank up to N7.154 billion, pending the determination of its motion on notice.

According to the applicant, the immediate order is necessary to prevent the dissipation of the disputed funds, which form the core of the conflict.

In the supporting affidavit deposed to by the General Manager of FHT Mega Express Limited, the business relationship between the company and the bank began in June 2023 when FHT approached Parallex Bank to establish several Letters of Credit for the importation of heavy equipment from Europe.

The bank issued an Indicative Offer on June 7, 2023, requiring a 100% cash cover for each LC. To meet this demand, the company opened an account and deposited N7.154 billion between July 2023 and February 2024 to fund four LCs, with total Form M values exceeding €7.8 million.

Based on these deposits, Parallex Bank allegedly issued the LCs, and shipments began arriving in tranches between February 2024 and February 2025.

However, the company claimed that while the bank released shipping documents for the first eight containers, it refused to release the documents for the remaining 30 containers. As a result, the containers began to accumulate terminal and shipping charges.

Despite several written requests in December 2024, the company stated that Parallex Bank insisted it must first pay N3.79 billion as exchange rate differential before the outstanding documents could be released.

The applicant described this demand as unjustified, stressing the bank had earlier represented that foreign exchange for the LCs would be sourced directly from its deposits.

As the 30 containers continued to accrue charges allegedly exceeding N850 million, FHT Mega Express said it made several attempts to resolve the impasse, including raising additional funds and entering a Debenture Trust arrangement with Cedrus Trustees Limited, which the bank ultimately rejected after months of delay.

Settlement proposals made between July and September 2025 were also allegedly dismissed.

While awaiting the release of the documents, the company discovered that the Nigeria Customs Service had obtained a forfeiture order in Suit No. FHC/L/MISC/519/2025 over the abandoned containers, which were subsequently auctioned to third parties.

Some of the buyers reportedly obtained delivery orders through court processes.

The applicant argued that the loss of the containers resulted directly from Parallex Bank’s refusal to release the shipping documents.

FHT Mega Express further accused Parallex Bank of acting in bad faith, alleging the bank used its N7.154 billion to procure LCs worth €7.8 million and still holds €7.31 million belonging to it. Using the Central Bank of Nigeria’s official rate of N1,740.70 per euro, the applicant says the current value of its funds stands at N12.7 billion.

The company listed its losses to include the total value of the 30 containers, accumulated charges, loss of business, and depreciation of its capital.

It argued that the N7.154 billion at the centre of the dispute is in danger of dissipation and must be preserved.

It therefore seeks an order directing all Nigerian financial institutions to transfer any funds belonging to Parallex Bank into an interest-yielding account, preferably with the Central Bank of Nigeria, pending the court’s decision.

The applicant has given an undertaking to compensate the bank if the order is later found to have been wrongly granted.

The matter is scheduled to come up on November 18 before Justice Abdul-Raheem Muyideen, who will consider whether to grant the interim preservatory orders.

Parallex Bank has not yet filed any response, as the application was brought ex parte.