ECOBANK TO PAY HONEYWELL N72bn FOR DAMAGES

Ecobank Nigeria has been sentenced to pay Honeywell Flour Mills N72.2 billion in damages by the Federal High Court in Lagos.

The decision, made on Tuesday by Justice Mohammed Liman, put an aspect of the protracted legal dispute between the bank and the wheat milling company to rest.

 A number of accusations and denials made by Honeywell Flour Mills and Ecobank led to the legal conflict.

When Ecobank acquired ex-parte orders from the Federal High Court to freeze Honeywell Flour Mills’ assets, including all of its bank accounts, the protracted legal dispute began in November 2015.

As a result, Honeywell Flour Mills’ operations nearly came to an end since they were unable to meet their commitments to stakeholders.

Over 2,000 employees’ jobs were in jeopardy, and they seriously damaged their brand and operations because they were unable to pay suppliers, process Letters of Credit, and collect payment from distributors.

In response to Honeywell Flour Mills’ application for discharge of the orders, the court modified the ex-parte orders freezing the company’s assets and granting it restricted access to its accounts after weeks of struggle to operate a business without access to its bank accounts.

The ex-parte decisions to reinstate Honeywell Flour Mills’ unrestricted access to its accounts were overturned in March 2016 by the Court of Appeal, which concluded that Ecobank’s request to have the assets frozen should not have been allowed to stand.

Ecobank contested the ruling in court and urged the Supreme Court to reverse the Court of Appeal’s ruling.

But in July 2018, the highest court was constituted, and it confirmed the appellate court’s ruling that an ex-parte injunction could not be sought in a winding-up case.

Following the Supreme Court’s affirmation of the Court of Appeal’s decision, Honeywell Flour Mills demanded Ecobank fulfill its promise to reimburse the business for the loss incurred as a result of the ex-parte decree, which was illegitimate. More than N72 billion in damages were sought against Ecobank by the firm.

Bode Olanipekun, the lead attorney for Honeywell Flour Mills, argued that the ex parte orders obtained by the bank against the plaintiff were improper and that once a court finds that an application is improper, that application is frivolous.

Kunle Ogunba, a spokesman for Ecobank, contended that the bank’s undertaking contained a clause requiring HFMP to notify the court registrar of any damages it incurs in order for the registrar to inform Ecobank.

According to the bank, that criterion was not met, hence HFMP is not entitled to damages.

The court made a determination after carefully examining the evidence and considering the arguments, ultimately siding with Honeywell Flour Mills and awarding all four reliefs requested, amounting to N72.2 billion in total.