In a significant court victory, Honeywell Flour Mills Plc has been awarded N72 billion in damages against Ecobank Nigeria by the Federal High Court. The ruling, delivered by Justice Mohammed Liman on July 18, 2023, found in favor of Honeywell Flour Mills, stating that the plaintiff’s account was wrongfully denied the use of funds due to an ex parte order obtained by Ecobank.
The legal battle between the two financial institutions dates back to 2015 when Honeywell filed a suit claiming N72 billion in damages from Ecobank for losses suffered due to an asset-freezing ex parte order. The claims include foreign exchange devaluation loss, interest on utilized cash balance, loss of revenue, and aggravated and exemplary damages.
The dispute arose from the terms of the settlement of a debt owed by Honeywell to Ecobank. Honeywell maintained that it had fully settled its obligations to the bank by paying N3.5 billion, as agreed upon. However, Ecobank disputed the settlement, stating that its Board of Directors had not ratified the deal and that the payment was not made within the stipulated timeframe.
Honeywell sought resolution through the Chattered Institute of Bankers of Nigeria (CIBN) Sub-Committee on Ethics and Professionalism but later turned to the courts when Ecobank insisted that the company was still indebted to the bank and placed its name on the credit risk list of the Central Bank of Nigeria for non-performing loan accounts.
After careful consideration of the arguments presented by both parties, the court ruled in favor of Honeywell, affirming that the N3.5 billion payment was indeed the complete and final settlement of its obligations to Ecobank. Ecobank expressed its intention to appeal the court’s decision.
Honeywell Flour Mills, owned by billionaire investor Oba Otudeko, has recently been in the spotlight due to his acquisition of 4.7 billion shares of First Bank, making him the largest shareholder with a 13.3% stake. This share acquisition has sparked a feud among the three largest shareholders of First Bank, Femi Otedola, Tunde Hassan-Odukale, and Oba Otudeko. As a result, the shares of First Bank have faced challenges as investors express concerns over the ongoing situation.
Ecobank Nigeria Limited has requested a temporary suspension of proceedings regarding Dr. Oba Otudeko’s share acquisition in First Bank from FBN Holdings Plc, the parent company of First Bank of Nigeria Limited.
