Federal High Court awards N72.2b damages in favour of Honeywell against Ecobank

Federal High Court awards N72.2b damages in favour of Honeywell against Ecobank                                                           Grants all four reliefs sought

The Federal High Court sitting in Lagos has awarded N72.2 billion in damages to Honeywell Flour Mills Plc, in a judgement delivered by Justice Mohammed Liman, on the flour milling company’s protracted legal battle against Ecobank Nigeria Limited.On Tuesday, July 18, Liman brought to an end an aspect of the drawn-out legal tussle between both entities by ruling in favour of Honeywell Flour Mills. The company had sought N72.2 billion in damages from Ecobank for the harm caused by the bank’s freezing of its assets in 2015.

The legal dispute started when Ecobank and its lawyer Kunle Ogunba, SAN obtained ex-parte orders from the Federal High Court to freeze Honeywell Flour Mills’ assets, including its bank accounts, halting the company’s operations and causing severe reputational and operational damage. For weeks, the business was unable to fulfil its obligations to stakeholders including inability to pay suppliers, process Letters of Credit, and collect payment from distributors. Honeywell Flour Mills then applied for the discharge of the orders and the court varied the asset freezing ex-parte orders, allowing the company limited access to its accounts.

In 2016, upon appeal, the Court of Appeal overturned the ex-parte orders, restoring Honeywell Flour Mills’ right to operate its accounts without restrictions. In its judgement the Court of Appeal concluded that Ecobank’s request to freeze the assets should not have been granted in the first place. This was subsequently affirmed by the Supreme Court in July 2018.

After the Supreme Court upheld the Court of Appeal judgement, Honeywell Flour Mills demanded Ecobank fulfil its undertaking to compensate the company for the loss suffered due to the ex-parte order, being baseless. The company sought damages, filing a suit in excess of N72 billion against Ecobank.

Although Ecobank argued against the validity and technicality of the conditions, seeking a dismissal of the suit, Justice Liman ruled that the court was convinced beyond reasonable doubt that the bank had violated the law and caused Honeywell Flour Mills significant damage with the asset freeze. The judge, while giving his ruling, said “The defendant’s arguments in this regard cannot stand…I have no hesitation in granting relief in favour of the plaintiff.