Fresh facts have emerged about the landmark ruling on a protracted legal dispute between Ecobank and Honeywell Flour Mills Plc at the Federal High Court sitting in Lagos.
On Tuesday, July 18, Hon. Justice Mohammed Liman awarded the food manufacturing company N72.2 billion in damages over the freezing of its assets by the bank in 2015.
The bank had, eight years ago, obtained ex-parte orders from the Federal High Court to freeze the assets of three Honeywell Group-related companies — Anchorage Leisures Limited, Honeywell Flour Mills and Siloam Global Services Limited — over a contentious loan settlement agreement. However, following a successful appeal and subsequent upholding of an Appeal Court judgement to return unrestricted access to the companies’ assets, Honeywell filed a N72 billion suit against Ecobank as damages for the loss it suffered during the freeze.
In an exclusively obtained court judgement, Justice Liman pronounced that Ecobank should not have obtained the orders ex parte (without informing Honeywell) and was liable to pay the damages requested in the suit filed by Honeywell. Ecobank will appeal the judgement.
Speaking on the bank’s legal team’s argument that the Federal High Court lacked the jurisdiction to entertain the suit, thereby requesting its dismissal, the judge said, “Having held in my analysis that the court has the jurisdiction to entertain this suit and that the instant suit is not an abuse of court process furthermore that the plaintiff has a reasonable course of action against the defendant, I find the defendant’s preliminary objections unmeritorious. It is hereby overruled.”
Elsewhere during his pronouncement of judgement, the judge declared that Honeywell had reasonable grounds for requesting damages, especially as Ecobank had signed an undertaking while filing for the ex parte orders to pay compensation if its application to freeze the assets was found frivolous.
The proceedings were witnessed by parties to the case on both sides, select journalists, and analysts over virtual conferencing platform Zoom. It lasted 115 minutes.
“I have painstakingly examined the plaintiff’s statement of claim wherein it avowed that it suffered injury and damages as a direct consequences of the ex-parte orders obtained against it by the defendant,” Justice Liman said, confirming that “it is clear that the plaintiff indeed made an undertaking to [pay] damages on two occasions.”
While ruling on Ecobank’s legal representative’s claim that Honeywell did not appeal the original ex-parte order for which the bank made an undertaking and therefore it was devoid of any legal rights to seek damages for an issue not appealed against, Justice Liman pronounced:
“From the above excerpts of both the judgement of the Court of Appeal and the Supreme Court, it is clear that the issue as to whether or not the plaintiff appealed against original ex parte order or the varied order of the court and whether the ruling of 18th November [2015] had outdated, the delivery of the ruling of the 4th December 2015 has been laid to rest. This court, therefore, lacks the jurisdiction to visit the said issue as it is bound by the decision of both the court of Appeal and the Supreme court.
He continued, “An attempt to raise the issue again, is to my mind a weak ploy by the defendant to pull a wool over the eyes of the court even in the face of the clear pronouncements made by the court of appeal and supreme court. Let me also state that the defendant’s argument in my respective view is aimed at creating confusion where none exists.”
On the technical argument by Ecobank’s legal team that the Court of Appeal or Supreme Court didn’t term the application of the ex-parte orders as “frivolous” or as “a sham” in their ruling and therefore wasn’t entitled to demand damages, the judge said “As logical as the argument sounds, I find it difficult to agree with it. Let me state at this point that the fact that the court did not expressly pronounce that the ex parte was ‘sham’ or ‘frivolous’ does not rob it of these characteristics.”
The judge proceeded to explain that the Court of Appeal and the Supreme Court agreed that the ex parte orders of injunction was a clear breach of the provisions of the rule for the company’s winding-up and that it was enough grounds for Honeywell to file a suit against the bank seeking payment of damages.
He said, “I have earlier stated that it is not mandatory for the court to use the precise or exact words used in an undertaking to pay damages. The purpose of an undertaking to damages which has been held in a legion of cases is to indemnify or compensate a party for the losses he may suffer based on the grounds of an ex parte order. The provisions of the winding-up rules are very clear and unambiguous. The defendant can not claim ignorance of these provisions of the winding-up rules, as ignorance of the law is no excuse. And it is even more inexcusable if it is committed by a lawyer.”
“Based on the foregoing, I am of the firm view that the plaintiff’s right to the damages sought has crystallised. Plaintiff therefore has a legal right to maintain this action,” he ruled.
Pronouncing the ultimate judgement, Justice Liman ordered Ecobank to pay Honeywell a total of N72.2 billion in damages for the losses it experienced during the time, as claimed in the suit.
READ ALSO FROM NIGERIAN TRIBUNE