The Supreme Court has upheld decision of the Court of Appeal, which dismissed the asset-freezing ex-parte order filed by Ecobank Plc against Honeywell Group at the Federal High Court in Lagos.
The apex court said the ex-parte order was unduly obtained and a clear breach of the provisions of the winding up rules.
Armed with the victory, Honeywell has filed a suit claiming the sum of N72 billion in damages from the bank for reputational losses suffered as a result of the asset-freezing ex-parte order.
The legal battle between Honeywell and Ecobank commenced in 2015 as a result of a dispute between the two companies over the terms of settlement of a debt, which the company owed the bank.
Honeywell had claimed that it had settled its outstanding debt to Ecobank having fulfilled its part of an agreement with the bank to pay the sum of N3.5 billion as full and final payment of the company’s obligation to the bank.
Ecobank, meanwhile, claimed that this agreement was not binding on the bank as its Board of Directors had not ratified the agreement, which was communicated to Honeywell by the Managing Director of the bank.
The bank also claimed that the payment was not made within the stipulated timeline.
Seeking a resolution to the issue, Honeywell sought the intervention of the Chartered Institute of Bankers of Nigeria’s (CIBN) Sub-Committee on Ethics and Professionalism (Bankers’ Committee), being the industry accepted dispute resolution mechanism for resolving disputes between bankers and their customers.
The Bankers’ Committee is an organ made up of representatives from the Central Bank of Nigeria (CBN), CIBN, Nigeria Deposit Insurance Corporation (NDIC) and Managing Directors of Banks.
It is charged with the responsibility of sanitising the practice of banking in Nigeria and promotion of discipline among practitioners, with part of its duties being the resolution of issues emanating from normal banker-customer relationships.
At the end of the review of the arguments adduced by Honeywell and Ecobank, the Bankers’ Committee ruled in Honeywell’s favour by resolving that the payment of N3.5 billion by Honeywell was indeed full and final settlement of its obligations to Ecobank and Honeywell was not indebted to Ecobank.
Not satisfied with this judgment, Ecobank asserted, through correspondence with the company, that the company was still indebted to the bank and also maintained the company’s name in the CBN’s CRMS portal for non-performing loan accounts.
Honeywell Group, therefore, sought the intervention of the courts to give effect to the decision reached at the Bankers’ Committee.
Rather than allowing the case to go to trial, Ecobank, through its lawyers sought an ex-parte order from the same Federal High Court.
The bank, through its lawyer, went on to institute several suits against Honeywell before multiple judges of the same Federal High Court, Lagos Judicial Division with all primarily being in respect of the same subject matter, seeking an order to freeze all the accounts of the company and deny the company access to all its funds with banks in Nigeria.
Asides from Justice Mohammed Yunusa, who eventually granted the order, all the courts approached, requested the bank to put Honeywell on notice regarding the ex-parte order, which was applied for.
However, Justice Yunusa eventually granted the ex-parte injunction against Honeywell.
Following an appeal by Honeywell Group seeking a discharge of the order granted by Justice Yunusa, the Court of Appeal, based on Honeywell’s application dismissed the ex-parte injunction and even described the decision as “exercise of discretion too extreme and injudicious to be allowed to subsist.”
This position was further re-emphasised by the Supreme Court in the final judgment, stating that the grant of the asset freezing order was a clear breach of the provisions of the extant laws.
Honeywell is now claiming damages based on the losses it suffered as a result of the ex-parte order, which the Supreme Court has now ruled was wrongly obtained by Ecobank.
Honeywell’s claim is that the order granted by Justice Yunusa to the bank was designed primarily to injure its business and cause significant embarrassment to principals and officials of the company.
The company has also put forward evidence to the court to support its application for damages it suffered as a result of the, now proven, wrong order, which was in place for nearly six months until it was lifted by the Court of Appeal.