The Federal High Court in Lagos has delivered a significant ruling, compelling Ecobank Nigeria to pay a staggering sum of N72.2bn in damages to Honeywell Flour Mills. The judgment, issued by Justice Mohammed Liman on Tuesday, marks the conclusion of a protracted legal battle between the renowned flour milling company and the bank.
The dispute between Honeywell Flour Mills and Ecobank dates back to November 2015, when Ecobank secured ex-parte orders from the Federal High Court to freeze all of Honeywell Flour Mills’ assets, including its bank accounts. This action had severe ramifications for the company, as it hindered their ability to fulfill obligations to stakeholders. Suppliers went unpaid, processing Letters of Credit became impossible, and collecting payments from distributors became a daunting task. As a result, the livelihoods of over 2,000 employees were jeopardized, and the company suffered substantial damage to both its reputation and operations.
After enduring weeks of struggling to conduct business without access to their bank accounts, Honeywell Flour Mills sought to have the orders discharged. The court eventually modified the freezing orders, granting the company limited access to its accounts. However, the legal battle continued, leading to a Court of Appeal decision in March 2016 that overturned the ex-parte orders, allowing Honeywell Flour Mills unrestricted access to operate its accounts. The appellate court ruled that Ecobank’s application to freeze the assets should not have been granted.
In response, Ecobank appealed the judgment to the Supreme Court, seeking to overturn the decision of the Court of Appeal. Nevertheless, in July 2018, the highest judicial authority upheld the appellate court’s ruling, stating that ex-parte injunctions were not permissible in winding-up petitions. Following the Supreme Court’s endorsement of the Court of Appeal’s judgment, Honeywell Flour Mills demanded that Ecobank fulfill its undertaking to compensate the company for the losses incurred due to the baseless ex-parte order, seeking damages exceeding N72bn.
During the legal proceedings, Honeywell Flour Mills’ lead counsel, Bode Olanipekun, argued that the Supreme Court had established the impropriety of the ex-parte orders obtained by the bank, rendering the application frivolous. Ecobank’s representative, Kunle Ogunba, countered by stating that the bank’s undertaking required Honeywell Flour Mills to notify the court’s registrar in the event of any damage suffered, which was allegedly not fulfilled, thus disqualifying the company from claiming damages.
After a thorough examination of the evidence and careful deliberation, the court ruled in favor of Honeywell Flour Mills. All four reliefs sought by the company were granted, culminating in a substantial award of N72.2bn in damages against Ecobank. This landmark judgment brings a definitive resolution to this long-standing legal battle, marking a significant victory for Honeywell Flour Mills.
