Lagos Court Orders Ecobank To Pay Honeywell N72.2bn in Damages

The Federal High Court in Lagos has ruled that Honeywell Flour Mills Plc. should receive N72.2 billion in damages for its long-running legal encounter with Ecobank Nigeria Limited, following the decision handed down by Justice Mohammed Liman.

Honeywell’s accounts had been frozen by Ecobank pursuant to an ex parte order that was given in an effort to wind up the company and resolve its liabilities to the bank. In exchange for the ex parte order, Ecobank agreed to compensate Honeywell for any losses.

In December 2015, the court of appeal changed the order, but Ecobank was not satisfied and took its case to the supreme court, where it also lost.

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

They were unable to process Letters of Credit, pay distributors, or pay suppliers, threatening the livelihood of over 2,000 employees and seriously harming their reputation and business operations.

The ex-parte orders were reversed by the Court of Appeal in 2016, following an appeal, restoring Honeywell Flour Mills’ freedom to manage its affairs as usual.

 The Court of Appeal found that the request to freeze the assets made by Ecobank should not have been approved in the first place. In July 2018, the Supreme Court subsequently upheld this.

After the Supreme Court confirmed the decision of the Court of Appeal, Honeywell Flour Mills demanded Ecobank meet its promise to reimburse the business for the loss incurred as a result of the ex-parte decree, which was illegitimate. The corporation sued Ecobank for more than N72 billion in an effort to recover damages.

“The plaintiff was denied the use of funds in his account based on the ex parte order granted in favour of the defendant. It is therefore my firm view that the plaintiff (Honeywell) is entitled to the amount claimed… The argument of the defendant in his written address is therefore not acceptable as the contents of the document are the best evidence and they speak for themselves,” he said.

“The provisions of the winding up rules are very clear and unambiguous. The defendant cannot claim ignorance of this provision as ignorance of the law is no excuse and it is even more inexcusable if it is committed by a lawyer. The ex parte application was therefore made ultra vires.”

Justice Liman decided that the court was beyond a reasonable doubt persuaded that Ecobank had broken the law and significantly harmed Honeywell Flour Mills with the asset freeze, notwithstanding Ecobank’s arguments disputing the legality and technicalities of the restrictions and attempting to have the lawsuit dismissed. 

He says, “The defendant’s arguments in this regard cannot stand…I have no hesitation in granting relief in favour of the plaintiff.”

The court made its decision 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.

“The plaintiff was denied the use of funds in his account based on the ex parte order granted in favour of the defendant. It is therefore my firm view that the plaintiff (Honeywell) is entitled to the amount claimed.

Frances Ibiefo

Follow us on: