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The Supreme Court docket has dismissed an enchantment by Honeywell Flour Mills Restricted difficult the judgement of the Court docket of Enchantment in a N5.5 billion debt dispute with Ecobank Nigeria Restricted.
Nairametrics gathered {that a} five-member panel of the Supreme Court docket, led by Tijjani Abubakar, delivered the judgement on the substantive points within the case on Friday. They mentioned Honeywell, Anchorage, and Siloam had been certainly indebted to Ecobank.
Nonetheless, the courtroom held that the companies’ enchantment succeeded partly, declaring that they had been proper to begin their swimsuit on the Federal Excessive Court docket in Lagos.
The judgment: The Supreme Court docket additionally held that the Court docket of Enchantment was incorrect to have held that the trial courtroom lacked jurisdiction to have heard Honeywell’s case within the lead judgement delivered by Emmanuel Agim.
- “This enchantment succeeds partly in respect of points numbers one and two… Accordingly, I maintain that the appellants have the locus standing to sue and that the trial courtroom has the jurisdiction to find out the swimsuit,” Agim mentioned.
Nonetheless, the Supreme Court docket declared the decision of the Court docket of Enchantment, which mentioned Honeywell and its sister firms are nonetheless indebted to Ecobank.
- “I affirm the judgment of the Court docket of Enchantment, setting apart the choice of the Federal Excessive Court docket, granting the reliefs claimed for by the appellants (Honeywell).
- “I maintain that the appellants’ declare on the trial courtroom fails and it’s hereby dismissed.
- “The appellants shall pay the price of N1 million to the respondent (Ecobank),” Agim mentioned.
Ecobank’s warnings: Nairametrics earlier reported that Ecobank Nigeria Restricted had warned Flour Mills of Nigeria Plc in opposition to the acquisition of an fairness stake in Honeywell Flour Mills Plc.
The financial institution alleged through the build-up to the acquisition by Flour Mills that Honeywell Group Restricted, the mother or father agency, had not been servicing its loans with the financial institution, in accordance with Punch.
In a letter addressed to the Managing Director of Flour Mills of Nigeria and signed by solicitors to Ecobank, Kunle Ogunba and Associates, the corporate, in addition to the general public and company our bodies had been warned of the “hazard inherent in dealing in any shares of the corporate.”
The financial institution alleged that it had superior a number of mortgage amenities to Honeywell Flour Mills, together with working capital disbursements. Additional stating that because of the failure of the corporate to liquidate its mortgage amenities, it was constrained to begin winding up proceedings in opposition to Honeywell Group Restricted on the Federal Excessive Court docket, Lagos in swimsuit no: FHC/L/CP/1571/2015.
- The letter mentioned, “Nonetheless, whereas the mentioned motion was dismissed on the Federal Excessive Court docket and the Court docket of Enchantment, it’s pertinent to state that an enchantment with enchantment no: SC/700/2019 has been filed difficult the mentioned determination on the Supreme Court docket (Discover of Enchantment is herein enclosed and marked as Annexure C).
- “Therefore, the impact of the above is that there’s at present a winding-up motion/continuing pending in opposition to the mentioned Honeywell Group Restricted.”
- The financial institution quoted a provision of Part 577 of the Corporations and Allied Issues Act 2020 as saying, “The place an organization is being wound up by the courtroom, any attachment, sequestration, misery or execution enforce in opposition to the property or results of the corporate after the graduation of the winding-up is void”
In keeping with the financial institution, this restricts Honeywell Group from transferring forward with the sale of Honeywell Flour Mills to Flour Mills of Nigeria.
- “Consequently, we hereby demand that Flour Mills of Nigeria Plc, in its greatest company curiosity, instantly stop and desist from consummating the topic transaction, which goals to divest the belongings of an organization being wound up (Honeywell Group Restricted).
- “Please be additional knowledgeable that the belongings of each Honeywell Group Restricted and Honeywell Flour Mills Plc. are the topic of the winding-up motion and thus based mostly on the doctrine of “lis-pendens” (along with the provisions of CAMA provided above) you’re suggested to chorus from coping with the topic asset which kinds a part of the subject material of litigation,” the financial institution added.
The Backstory: Each firms have been in a long-standing authorized battle since 2015 over an unpaid debt of N5.5 billion by the latter. Whereas Ecobank is sustaining that Honeywell is indebted to it to the tune of the aforementioned cash, out of which N3.5 billion had been paid, Honeywell claimed to have paid the debt in full.
Within the wake of the authorized tussle, Dr Oba Otudeko, Honeywell Group chairman, had informed a Court docket of Enchantment that the sum was owed to particular person firms. These firms embody Anchorage Leisures Restricted, Siloam Restricted, and Honeywell Flour Mills Plc.
Otudeko maintained that his firms had paid N3.5 billion as of December 12, 2013, as the complete and last cost for the N5.5 billion debt as agreed by the events at a July 22, 2013 assembly.
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