N5.5b disputed debt: Honeywell floors Ecobank in court, gets handsome reward

By our correspondent

A Federal High Court sitting  in Lagos on Friday held  that Honeywell Flour Mills Plc and its sister companies, Anchorage Leisures Limited and Siloam Global Limited are not in any way indebted to Ecobank Nigeria Limited contrary to the bank’s claim against the companies, that has dragged this far at the court of first instance.

Justice Ayokunle Faji made the declaration while delivering judgement in a suit filed by Honeywell Group against Ecobank Limited.

Following a dispute over an alleged indebtedness of N5.5 billion to Ecobank Limited, Honeywell Group and its sister companies instituted a suit seeking court’s declaration that they were not indebted to Ecobank, contrary to the bank’s claim that they were indebted to it to the tune of N5.5 billion.

The companies have urged the court to hold that having made a “full and final” payment of N3.5 billion, as agreed at  the July 22, 2013 meeting, they were no longer indebted to the bank.

But the bank insisted that in paying the N3.5 billion, the firms did not comply with the terms of agreement.

It contended that the firms breached the agreement that the money should be paid before the examiners from the Central Bank of Nigeria, who were in the bank to examine its books would leave.

But the firms contended that the bank failed to inform them when exactly the CBN examiners were to leave, adding that it made the final payment on December 12, 2013.

In his judgment, Justice Faji ruled in favour of Honeywell and its sister companies,  holding that they were no longer indebted to the bank based on the exhibits placed before the court by the defendant

Justice Faji in his judgment said Ecobank did not give any update about the actual time limit for the repayment of the loan”.

Based on the agreement reached between the parties, the plaintiffs are no more independent to the defendant” the court held.

The judge further said that “I have looked through all the exhibits placed before the court, letters sent by plaintiffs to defendant about the remittance and the money the defendant is talking about now did not feature in the letters to the plaintiffs”.

The judge also awarded a cost of N250,000 against the bank in favour of Honeywell and its sister companies.

In a swift reaction to the judgment, Ecobank Nigeria Limited through a firm, Specialized Resolution Company, which took over the disputed Honeywell loans said it is set to appeal the judgment delivered by the court, on the protracted N5.5 billion suit between Honeywell and its client.

The ETI Specialized Resolution Company Ltd (ESRC), a recovery resolution vehicle of Ecobank group will fully prosecute the appeal as it strongly disagrees with the decision of the court.   

The main purpose of ESRC is to pursue and recover all outstanding loan obligations of customers whose loans were sold to the company.  It has indeed made appreciable progress in this regard.