Ecobank Nigeria has been ordered by the Federal High Court in Lagos to pay Honeywell Flour Mills ₦72.2 billion in damages, following a legal ruling.
The flour milling company and the bank’s prolonged legal battle saw one aspect finally resolved through the ruling delivered by Justice Mohammed Liman on Tuesday.
The legal dispute between Honeywell Flour Mills and Ecobank can be traced back to a series of allegations and counterclaims.
With ex-parte orders obtained from the Federal High Court in November 2015, Ecobank initiated the protracted legal battle, causing the freezing of Honeywell Flour Mills’ assets, including all its bank accounts.
The operations of Honeywell Flour Mills were severely impacted, as they faced difficulties fulfilling their commitments to stakeholders.
The repercussions were far-reaching, as Honeywell Flour Mills found themselves unable to pay suppliers, process Letters of Credit, and collect payments from distributors, thereby jeopardizing the livelihood of over 2,000 employees and inflicting substantial reputational and operational harm.
The arduous struggle of weeks without access to their bank accounts led Honeywell Flour Mills to take decisive action and apply for the orders’ discharge. In response, the court granted some respite by modifying the asset freezing ex-parte orders, allowing the company restricted access to its accounts.
The trajectory of events changed in March 2016 as the Court of Appeal reversed the ex-parte orders, granting Honeywell Flour Mills unrestricted access to operate its accounts. The court deemed that Ecobank’s application to freeze the assets should not have been approved.
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Ecobank brought the matter to the Supreme Court, seeking to have the Court of Appeal’s decision overturned through their appeal.
However, in July 2018, a significant milestone was reached when the highest judicial authority was established and upheld the decision of the appellate court, concluding that the inclusion of an ex-parte injunction in a winding-up petition was not authorised.
Upon the Supreme Court’s validation of the Court of Appeal’s judgment, Honeywell Flour Mills asserted its right to demand compensation from Ecobank for the unfounded ex-parte order’s impact. Seeking damages surpassing ₦72 billion, the company held Ecobank responsible for the incurred losses.
Bode Olanipekun, the attorney representing Honeywell Flour Mills, contended that the Supreme Court had ruled in favour of the plaintiff, stating that the ex parte orders obtained by the bank were not valid. He underscored that any application found to be improper by the court must be treated as frivolous.
Kunle Ogunba, representing Ecobank, put forward the argument that their undertaking included a clause stipulating that HFMP must notify the court registrar in the event of any damages, and it would be the registrar’s duty to inform the bank.
The bank’s stance is that HFMP is not entitled to damages because they allegedly did not adhere to the stated condition.
The court’s decision, reached after a careful evaluation of the evidence and thoughtful deliberation, ultimately favoured Honeywell Flour Mills, entitling them to all four sought-after reliefs, amounting to ₦72.2bn.