Business/Brands & Marketing
Oba Otudeko floors EcoBank as Court orders N72 payment to Honeywell
The Honeywell Flour Mills, owned by Oba Otudeko, will receive N72.2 billion in damages from Ecobank Nigeria, according to a ruling from the Federal High Court in Lagos.
The decision, made on Tuesday by Justice Mohammed Liman, put an aspect of the protracted legal dispute between the bank and the wheat milling company to rest.
A number of accusations and denials made by Honeywell Flour Mills and Ecobank led to the legal conflict.
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When Ecobank acquired ex-parte orders from the Federal High Court to freeze Honeywell Flour Mills’ assets, including all of its bank accounts, the protracted legal dispute began in November 2015.
This almost halted Honeywell Flour Mills’ business as they were unable to fulfill their obligations to stakeholders.
They were unable to pay suppliers, process Letters of Credit, and collect payment from distributors, thus endangering the livelihood of over 2,000 employees and causing significant reputational and operational damage.
After weeks of struggling to run a business without access to their bank accounts, Honeywell Flour Mills applied for discharge of the orders, with the court varying the asset freezing ex-parte orders and allowing the company limited access to its accounts.
In March 2016, a Court of Appeal overruled the ex-parte orders to restore Honeywell Flour Mills’ right to operate its accounts without any restrictions, stating that Ecobank’s application to freeze the assets should not have been allowed to stand.
Ecobank requested that the Supreme Court reverse the Court of Appeal ruling in an appeal against the ruling.
But in July 2018, the highest court was constituted, and it confirmed the appellate court’s ruling that an ex-parte injunction could not be sought in a winding-up case.
Following the Supreme Court’s affirmation of the Court of Appeal’s decision, 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. More than N72 billion in damages were sought against Ecobank by the firm.
Bode Olanipekun, the lead attorney for Honeywell Flour Mills, argued that the ex parte orders obtained by the bank against the plaintiff were improper, and that once a court finds that an application is improper, that application is frivolous.
Kunle Ogunba, a spokesman for Ecobank, contended that the bank’s undertaking contained a clause requiring HFMP to notify the court registrar of any damages it incurs in order for the registrar to inform Ecobank.
According to the bank, that requirement was not met, hence HFMP is not entitled to damages.
The court made a determination 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.
