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Ecobank Nigeria has been ordered to pay Honeywell Flour Mills N72.2bn as compensation, but they're objecting.
The ruling was delivered by Justice Mohammed Liman on Tuesday at a Federal High Court in Lagos.
This marks the conclusion of a long-standing legal battle between Honeywell and the bank.
Honeywell Flour Mills and Ecobank rift originated from a series of allegations and counterclaims.
How It Began: Ecobank froze Honeywell Flour Mills account
The legal tussle began in November 2015 when Ecobank obtained an ex-parte order from the Federal High Court to freeze Honeywell Flour Mills' assets, including all its bank accounts.
This action severely impacted Honeywell Flour Mills' operations as they were unable to meet their obligations to stakeholders, such as paying suppliers, processing Letters of Credit, and receiving payment from distributors.
Consequently, this posed a significant threat to the livelihoods of over 2,000 employees and caused substantial damage to the company's reputation and operations.
Honeywell Defeats Ecobank at Appeal
After facing considerable challenges in running their business without access to their bank accounts, Honeywell Flour Mills applied for the discharge of the orders.
The court subsequently modified the asset freezing ex-parte orders, granting the company limited access to its accounts.
In March 2016, the Court of Appeal overruled the ex-parte orders, restoring Honeywell Flour Mills' right to operate its accounts without restrictions.
The Court of Appeal held that the bank's application to freeze the assets should not have been allowed to stand.
Following an appeal against the judgment, Ecobank approached the Supreme Court seeking to overturn the Court of Appeal's decision.
However, in July 2018, the Supreme Court upheld the Court of Appeal's ruling that an ex-parte injunction was not appropriate in a winding-up petition.
Honeywell Gets N72 Billion Compensation
After the Supreme Court upheld the Court of Appeal's judgment, Honeywell Flour Mills demanded that Ecobank fulfil its undertaking to compensate the company for the losses incurred due to the baseless ex-parte order.
Honeywell Flour Mills sought damages of over N72bn against the Pan-African bank.
Honeywell Flour Mills' lead counsel, Bode Olanipekun, argued that since the Supreme Court had declared the ex-parte orders obtained by the bank against the plaintiff as improper, any application based on those orders should be considered frivolous.
On the other hand, Ecobank's representative, Kunle Ogunba, contended that their undertaking required Honeywell Flour Mills to notify the court's registrar if any damage was suffered, and since that condition was not fulfilled, the company was not entitled to damages.
After a thorough examination of the evidence and careful deliberation, the court ruled in favour of Honeywell Flour Mills, granting all four reliefs sought, resulting in a total compensation of N72.2bn.
N72BN: Ecobank Vows to Appeal Ruling
However, Ecobank Nigeria Limited has expressed its intention to appeal the judgment.
In a statement, Ecobank expressed its belief that the judgment is flawed and will not withstand higher court scrutiny.
Ecobank raised several objections during the legal proceedings, which the court allegedly overlooked or refuse to consider.
The bank maintains that the Ex-Parte Orders were discharged based on points of law, not frivolously obtained and that the orders were in effect for less than two weeks, contrary to Honeywell's claim of three years of coverage.
Ecobank further contended that the documents presented by Honeywell, including the annual returns, did not support the alleged damages, rendering them non-existent.
Additionally, documents from other banks reportedly showed that Honeywell companies were heavily indebted to them, challenging the freezing of funds through the Ex-Parte Orders.
Despite the setbacks, Ecobank reiterated its commitment to transparency and compliance with laws and regulations. As part of the Ecobank Group, a Pan-African Bank, it remains steadfast in its pursuit of a conclusive resolution through the appropriate judicial process.
