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The many legal battles of Ecobank and Honeywell

Honeywell

The lawyers for both Ecobank and Honeywell Group are pushing several cases against each other in connection with the dispute over the settlement of claims of N5 billion by the bank against Honeywell as well as an unrelated matter of the sale of shares held originally in what is today’s Airtel Nigeria plc.

On July 23, 2013, Honeywell wrote to Ecobank accepting the terms for the resolution of the claim by the bank 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 N500million 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 part 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.

Read Also: Ecobank warns FMN against Honeywell acquisition deal

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 banks accounts allowing the company to take no more than N15 million weekly.

Worried by the orders of Justice Yunusa, Honeywell petitioned the National Judicial Council alleging judicial misconduct arising from what the company called, “the unfair and unlawful exercise of his discretion.”

After this petition to the NJC, Ecobank’s lawyer wrote to Honeywell demanding a copy of the petition. This got Honeywell thinking that something was amiss.

Sensing that Ecobank’s lawyers might be attempting to use the administration of justice to blackmail Honeywell into submission, on April 7, 2016, Honeywell petitioned the Legal Practitioners Disciplinary Committee also known as the Body of Benchers.

In the petition, the company said, “in view of the critical role of the judiciary in preserving the sanctity of the law and in light of the facts set out above, we respectfully urge you to conduct an investigation into Mr Kunle Ogunba’s conduct with respect to this dispute and to take such disciplinary actions as are necessary in line with Section 11 of the Legal Practitioners Act CCAP L11. LFN 2004) to ensure that the integrity of the legal profession is preserved.”

At an emergency meeting held on September 15, 2017, the Legal Practitioners Privileges Committee adjudicated on the matter and in a statement dated 11/1/2018 and signed by Hadizatu Mustapha, Chief Registrar of the Supreme Court, the committee said as follows, “Honeywell Group petitioned Kunle Ogunba SAN alleging professional misconduct against him. The misconduct alleged consists of the institution of multiplicity of proceedings before different judges of the Federal High Court on the same subject with the deliberate aim of abusing the process of court and derailing the course of justice. This is to further notify the general public that after a thorough investigation of the petition by the sub-committee set up by the Legal Practitioners’ Privileges Committee (at which the respondent was given a fair hearing) it was decided that the petition is meritorious.”

Consequently, the Legal Practitioners’ Privileges Committee at its 129th plenary meeting sanctioned the senior lawyer, withdrawing a set of privileges from him forthwith.

Honeywell is also in court pressing damages claim against Ecobank for harm to its interests arising from the ex-parte order granted against it and which has now been made voided by courts including the Supreme Court.

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.”

In an unrelated matter, Honeywell and Ecobank are also in court over the sale of Airtel shares by Ecobank to Bharti Airtel for $28 million. Honeywell claims that as at the time the shares were sold to Delta State government, which then sold to Oceanic Bank (acquired by Ecobank), there was a subsisting shareholder agreement that stipulated that existing shareholders were to be given rights of first refusal.

Honeywell is now asking that the court compel Ecobank to deposit the $28 million proceeds from the share sale into the accounts of the court until the determination of the substantive suit brought by Honeywell.