The latest legal tussle between Ecobank Nigeria Limited and Honeywell Group over an alleged N5 billion debt appears to have been resolved as far back as 2015 after the Bankers’ Committee, the umbrella body of bank CEOs and Nigeria’s apex bank, declared that Honeywell was not indebted to Ecobank.
The Bankers Committee (Sub-committee on Ethics and Professionalism), according to its report seen by BusinessDay ruled that an agreement for Honeywell to pay Ecobank the sum of “N3.5 billion as full and final payment was valid and should be complied with”.
The Bankers’ Committee, in the June 26 2015 report, with reference number ODA/FMA/BUO/1493, said it received a petition that Ecobank was “attempting to renege on a settlement agreement” on facilities it granted to Anchorage Leisures Limited, Siloam Global Services Limited and Honeywell Flour Mills Plc.
The Banker’s committee report which was addressed to Ecobank’s managing director and chief executive said “after several offers and counter offers with respect to the amount for the settlement, the parties agreed at the meeting of 22nd July 2013, involving your bank’s MD/CEO and the Honeywell Group Chairman that Honeywell would pay the sum of N3.5billion in full and final settlement of the indebtedness of the three companies. It was also agreed that Honeywell would immediately proceed to pay the sum of N500million as a sign of faith towards the agreement.”
According to the Bankers Committee’s report, Honeywell paid the agreed N500 million to Ecobank on July 23, 2013 and completed payment of the agreed N3.5 billion on January 10, 2014. Thereafter, the group requested for a letter of discharge from Ecobank.
However, Ecobank in a November 14, 2014 letter to Honeywell Group, claimed that the N3.5 billion was a partial payment and that the agreement that the sum was in full and final settlement was an “in principle understanding”.
“Ecobank also stated that Honeywell Group’s Chairman was a “related party” to the transactions, hence the request for a discharge letter could not be granted,” the Committee said.
The Committee found that it was not in dispute that Ecobank’s management consummated an agreement on July 22, 2013, with Honeywell Group to accept N3.5 billion in full and final settlement.
The Committee stated that at the time the transactions were consummated with Oceanic Bank Plc (legacy bank), Oba Otudeko, Honeywell Group’s chairman was neither on the board of the bank nor the board of Ecobank Transnational Incorporated, the parent company.
The Bankers’ Committee said that based on clarifications from the Banking Supervision Department of the Central Bank of Nigeria, he was not a “related party” to the transactions as he was not on Oceanic Bank’s board when the transactions were consummated.
“After due consideration of findings, the sub-committee ruled that the agreement between the borrower and your bank to pay the sum of N3.5billion as full and final payment of the borrower’s indebtedness is valid and should be complied with and this was ratified by the full Bankers Committee,” the report stated.
How it all started
On July 23, 2013, Honeywell wrote to Ecobank accepting the terms for the resolution of the claim by the bank as agreed at the meeting held the day earlier and saying, “we confirm our agreement to pay the sum of N3.5billion as full and final settlement of our indebtedness to your bank. As part of the verbal agreement reached at the meeting, we shall immediately pay the sum of N500 million towards the facilities. We propose that the balance of N3 billion be paid in three equal half-yearly payments.”
That same day, Ecobank sent back a response in which the bank said, “please note that the agreement was for a full and final payment of N3.5 billion to be partly paid immediately by – N500 million on Monday, July 22, 2013, and the balance to be paid immediately thereafter before the CBN examiners leave the bank.”
The timing of the payment became a big issue and this saw both parties moving their wranglings to the court on October 16, 2015, via a suit by Ecobank before Justice Tsoho seeking to wind up Honeywell.
However, both parties began to get public attention for their dispute after Ecobank secured an ex-parte motion to restrain Honeywell and Oba Otudeko from operating their accounts in all banks and financial institutions and an order directing their respective banks to furnish Ecobank with details of their accounts in the banks.
This same bank-customer dispute was submitted to the subcommittee of ethics and professionalism of the Bankers’ Committee for adjudication and ruling was issued in favour of Honeywell, but Ecobank in a letter dated November 14, 2014, maintained that “during a recent CBN/NDIC review of the bank, the accounts were flagged and that the CBN had insisted that the amount outstanding be paid without further delay.”
On August 6, 2015, Honeywell filed a suit before Justice M. B. Idris in which it sought an interim injunction to restrain Ecobank from making any representation suggesting that it owed the bank and on August 10, 2015, the interim injunction was granted and both parties ordered by the court to maintain status quo.
Following this, Ecobank filed a preliminary objection on the basis that the Federal High court lacked jurisdiction to hear the dispute and on December 11, 2015, the court presided by Justice Idris held that the Federal High court had jurisdiction to hear the matter. Ecobank immediately appealed this decision.
On October 16, 2015, Ecobank filed two separate suits before Justice Abang. On this same day, Ecobank filed another two petitions before Justice Yunusa who on December 4, 2015, varied the ex-parte orders by granting Honeywell Flour Mills restricted access to its bank’s accounts allowing the company to take no more than N15 million weekly.
On July 13, 2018, justices of the Supreme Court made two rulings, both in favour of Honeywell.
In one, suit number SC.401/2016, which was an appeal by Honeywell against the ruling of a lower court in favour of Ecobank, the justices in the ruling read by Amiru Sanusi upheld the appeal.
In another ruling delivered by John Inyang Okoro, the Supreme Court justices reviewed an appeal brought before them by Ecobank in relation to the judgment of the Court of Appeal delivered on March 30, 2016, said inter alia, “having resolved all five issues against the appellant (Ecobank) , I hold that this appeal lacks merit and is hereby dismissed. I affirm the decision of the court of appeal delivered on 30th March 2016.”
In doing so, the Supreme Court justice said, “honestly, I have tried to understand the complaint of the appellant in this issue but it appears to be the more you look, the less you see.”
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