LawPavilion Online


Back

HONEYWELL FLOUR MILLS PLC (RC.NO. 55495) v. ECOBANK NIGERIA LTD (RC.NO. 89773)

(2016) LPELR-40221(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 30th day of March, 2016

CA/L/1247/2015


Before Their Lordships

SIDI DAUDA BAGE Justice of The Court of Appeal of Nigeria

SAMUEL CHUKWUDUMEBI OSEJI Justice of The Court of Appeal of Nigeria

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria


Between

HONEYWELL FLOUR MILLS PLC (RC.NO. 55495) - Appellant(s)

AND

ECOBANK NIGERIA LTD (RC.NO. 89773) - Respondent(s)


Other Citations

; ;


Summary

INTRODUCTION This appeal borders on civil procedure. FACTS This appeal emanated from the Federal High Court, Lagos presided over by M. N. Yunusa. Respondent had filed a petition against appellant seeking the following reliefs: a. That HONEYWELL FLOUR MILLS PLC with Registration No. 55495 be WOUND-UP by the Court under the provisions of Sections 409 (1) and 410 (1) (b) of Companies and Allied Matter Act, Cap C20 Laws of the Federation of Nigeria, 2004 . b. Or such other Order(s) may be made in the premise as this Honorable Court consider just in the circumstance. Respondent also filed a motion ex parte the same day the petition was filed. According to respondent, Oceanic Bank PLC entered into an import finances Facility/Revolving Product Finance Facility and overdraft facility agreement with the Appellant. Sequel to the acquisition of Oceanic Bank, it embarked on a process of recovery of the huge sum of money said to be owed by the Appellant as a result of the credit facilities. Sometimes in July 2013, the Appellant through the Chairman of Honeywell Group Limited, OBA OTUDEKO proposed the payment of the sum of N3.5 Billion out of the N5.5 Billion owed by the Appellant and other sister companies under the Honeywell Group Ltd. The proposal by the Chairman of the Group to pay the sum of N3.5 Billion was accepted by the Respondent on certain conditions, part of which was the payment of the sum of N500 Million immediately and the remaining balance before the Central Bank of Nigeria (CBN) examiners leave the bank on inspection as was clearly stated in the letters exchanged by the parties on the 22-7-2013. Appellant was fully aware that the CBN examiners will leave the bank by the end of August 2013 and on the basis of which the concession to pay the sum of N3.5 Billion was made by the Respondent in order to balance its acquired accounts. The Appellant subsequently defaulted in the bullet and staggered repayment of the indebtedness as suggested by OBA OTUDEKO, the Chairman of Honeywell Group Limited on behalf of the defaulting Appellant and other sister companies. This led to a series of correspondences and proposals by the Appellant urging the Respondent to accept the said sum of N3.5 Billion as full payment to settle the indebtedness and which proposal was not agreeable to the Respondent given the failure of the Appellant to honour the agreement. The intervention of the Bankers Committee and the sub-committee on Ethics and Professionalism did not yield positive results and the Appellant took the option to institute an action in the Federal High Court Lagos. In the said suit, Appellant sought inter alia, the specific performance of the agreement . During the proceedings of the Court presided over by M.B IDRIS J., the Learned trial Judge made an order for the parties to maintain status quo ante Bellum. The Respondent felt that it has been exposed to scrutiny by the Central Bank of Nigeria and other statutory bodies and consequently filed a petition for winding-up followed with applications for interim/interlocutory reliefs seeking to preserve the assets and funds of the Appellant pending the appointment of a provisional liquidator and the hearing of the petition before the Federal High Court. The Court refused to grant the application but directed that the Respondent put the Appellant on notice. Respondent however filed a notice of discontinuance of the said petition for winding up. Again, Respondent filed a fresh petition for winding-up against Appellant and filed another motion exparte seeking an interim order for the preservation of the Assets/funds of the Appellant. The Suit was assigned to M.N.YUNUSA J who entertained the motion Exparte and granted same. Upon being notified of the grant of the Exparte orders, Appellant filed a motion on notice seeking the order of the said Court to discharge the Exparte orders so granted and dismiss the petition before it on grounds of abuse of Court process amongst others. Respondent filed a counter affidavit to oppose the said motion and also filed a motion on notice seeking the order of Court to dismiss the said motion on notice for being an abuse of process. The two applications were then taken together and in a Ruling delivered by YUNUSA J., the Court declined to vacate or discharge all the interim orders made but rather varied them by allowing the Appellant access to withdraw the sum of N15 Million per week for the running/overhead expenses and also suspended the order for advertisement of the petition for winding-up. Respondent?s application to dismiss the Appellant?s motion was refused. Appellant was dissatisfied with the said Ruling, and appealed. Respondent cross-appealed. ISSUES FOR DETERMINATION The following issues were formulated by appellant and deployed in determining the appeal: (1) Whether the Lower Court was not in grave error and also acted in breach of Appellant's right to fair hearing in its refusal to consider and pronounce on several diverse and fundamental issues validly raised before it by the Appellant. (Ground 8) (2) Considering the clear provisions of applicable winding-up rules, whether the Lower Court did not act without jurisdiction in granting exparte orders if so granted and its subsequent failure to discharge same. (ground 1). (3) Considering the facts and circumstances of the case before the Lower Court, whether the said Court was not wrong in failing to treat the Suit before it as an abuse of Court process. (Ground 2) (4) Struck out by this Court. (5) Whether the Lower Court was correct to have considered the appropriateness or otherwise of the grant of mareva injunction in making a decision on Appellant's motion of 23rd November, 2015. (Ground 3) (6) Considering the contractual arbitration agreement in the facility agreement between the parties as presented by the Respondent, whether the Lower Court was not wrong in refusing Appellant's alternative prayer for stay of proceedings pending arbitration on the ground that Appellant had already taken steps thereby waiving its right to such a relief. (Ground 7) (7) In view of Respondent?s reaction to Appellant?s motion dated 23rd November 2015, whether the Lower Court was not in error in failing to treat same as unchallenged. (Ground 9) Respondent submitted the following issues and issue 4 was used in determining its cross-appeal: (1) Whether the Lower Court was right both in law and on the facts presented to have refused to discharge its interim orders of 18th November, 205 in the Ruling delivered on 4th December 2015? (2) Whether preservative reliefs sought via exparte application of the Respondent dated 9th November, 2015 can amount to ?Mareva injunction? as the Learned Trial Judge called it in his Ruling of 4th December, 2015? (3) Whether the Learned Trial Judge was wrong in upholding the interim orders via its Ruling of 4th December 2015. (4) Whether the Lower Court was right to have dismissed Cross-appellant?s Notice of Preliminary objection without resolving issue of abuse raised therein and inspite of the existence of form 49 filed in FHC/L/CS/1219/2015 brought to its attention? HELD The appeal succeeded and was allowed. The cross-appeal was struck out.


Read Full Judgment