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ECOBANK NIGERIA LIMITED v. HONEYWELL FLOUR MILLS PLC

(2018) LPELR-45124(SC)

In The Supreme Court of Nigeria

On Friday, the 13th day of July, 2018

SC.402/2016


Before Their Lordships

OLABODE RHODES-VIVOUR Justice of The Supreme Court of Nigeria

MARY UKAEGO PETER-ODILI Justice of The Supreme Court of Nigeria

JOHN INYANG OKORO Justice of The Supreme Court of Nigeria

CHIMA CENTUS NWEZE Justice of The Supreme Court of Nigeria

AMIRU SANUSI Justice of The Supreme Court of Nigeria


Between

ECOBANK NIGERIA LIMITED - Appellant(s)

AND

HONEYWELL FLOUR MILLS PLC - Respondent(s)


Other Citations

; ;


Summary

INTRODUCTION:
This appeal borders on Company Law.
FACTS:
This is an appeal against the judgment of the Court of Appeal, Lagos, setting aside the Ruling of Yunusa, J., of the Federal High Court, Lagos.

The Appellant's case at the trial Court was that, Oceanic Bank Plc entered into an import finance facility/Revolving Product finance Facility and Overdraft facility agreement with the Respondent. Sequel to the acquisition of Oceanic Bank by the appellant, it embarked on a process of recovery of the huge sums of monies owed by the Respondent as a result of the credit facilities. Sometimes in July, 2013, the Respondent, 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 Respondent and other sister companies under the Honeywell Group Limited. The proposal by the Chairman of the Group to pay the sum of N3.5 Billion was accepted by the Appellant on certain conditions, part of which was the payment of the sum of N500 million immediately and the balance before the Central Bank of Nigeria (CBN) examiners left the bank on inspection. The Respondent was fully aware that the Central Bank of Nigeria examiners would 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 Appellant in order to balance its acquired accounts.

The Respondent 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 Respondent and other sister companies. This led to a series of correspondence and proposals by the Respondent urging the Appellant to accept the said sum of N3.5 Billion as full payment to settle the indebtedness and which proposal was not agreeable to the Appellant given the failure of the Respondent to honour the "in principle agreement "

The intervention of the Bankers Committee and the sub-Committee on Ethics and Professionalism did not yield positive results. Respondent instituted an action in the Federal High Court, Lagos and sought inter alia, specific performance of the "in principle agreement' of 22nd July, 2015. The Appellant 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 of the Respondent on 16th October, 2015, followed with applications for interim/interlocutory reliefs seeking to preserve the assets and funds of the Respondent pending the appointment of a provisional liquidator and the hearing of the petition before the trial Court.

The Appellant's petition for winding-up was assigned to J. T. Tsoho, J. who heard the ex-parte application for interim reliefs towards preserving the assets/funds of the Respondent and declined to grant the same but directed that the Respondent put the Appellant on notice and the suit adjourned. The Appellant thereafter filed a notice of discontinuance of the petition. On 9th November, 2015, the Appellant filed a fresh petition for winding-up against the Respondent and contemporaneously with same, it filed another motion ex-parte seeking an interim order for the preservation of the Assets/funds of the Respondent. The suit was assigned to the trial judge, who entertained the motion ex-parte on 18th November, 2015 and granted same. Upon being notified of the grant of the ex - parte orders, the Respondent filed a motion on notice seeking the order of the Court to discharge the ex- parte orders so granted and dismiss the petition before it on ground of abuse of Court process amongst others. The Appellant filed a counter affidavit to oppose the motion and also filed a motion on notice seeking the order of Court to dismiss the motion on notice for being an abuse of process. The two applications were then taken together. The Court declined to vacate or discharge all the interim orders made but rather varied them by allowing the Respondent 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. The trial Court also refused to grant the appellant's application to dismiss the Respondent's motion. Dissatisfied, respondent appealed to the Court of Appeal, while the appellant filed a cross appeal.

The Court of Appeal allowed the appeal and struck out the cross appeal, transferring the suit to another judge of the trial Court for hearing. Dissatisfied, appellant appealed to the Supreme Court.

ISSUES:
The issues for determination are:
"1. Whether the grounds as contained in the Respondent's Notice of Appeal against an interlocutory decision of the Trial Court dated the 4th day of December, 2015 were competent to warrant the hearing of the entire APPEAL filed by the Respondent on the merit as done by the Lower Court, the Court of Appeal?
2. Whether the APPEAL filed by the Respondent at the Lower Court was against the ex -parte order of the Lower Court made on the 27th day of October, 2015 which order was varied by the Trial Court pursuant to its ruling of 4th December, 2015 and consequently, ceased to be in existence?
3. Whether by a community reading of the Companies Winding - up Rules 2001, Section 411(1) of the Companies and Allied Matters Act, 2004, the extant Constitution of the Federal Republic of Nigeria 1999 (as amended) and the Supreme Court's decision in Provisional Liquidator Tapp Industries v. Tapp Industries Ltd (1995) 5 NWLR (Pt. 393) page 9, ex - parte orders are permissible under the Companies Winding - up Rules, 2001?
4. Whether the Court of Appeal by virtue of Section 15 of the Court of Appeal Act Cap C 36 Laws of the Federation of Nigeria, 2004 is not bound to hear, determine and make pronouncement on the issue of abuse of Court process validly submitted to it by the parties herein?
5. Whether the Court of Appeal was right to strike out the appellant's Cross Appeal solely on the grounds that the granting of prayer 1 of the Respondent's Motion on Notice at the Lower Court dated the 23rd day of November, 2015 by the Court of Appeal made the sole issue submitted in the Cross-Appeal a moot point."

DECISION/HELD:
In conclusion, the Supreme Court dismissed the appeal.


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