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N3.5 Billion Indebtedness: Court Rules In Favor Of Honeywell

***As Judge Declares Payment Of Sum As Full, Final Settlement Of Indebtedness To Econbank

By Francis Iwuchukwu, Lagos 

A Federal High Court sitting in Ikoyi, Lagos State, Nigeria, presided over by Justice Ayotunde Faji on Friday (today) held that Honeywell’s payment of N3.5 Billion between 2013 and 2014 constitutes the full and final settlement of its indebtedness to Ecobank Nigeria Limited.

The judgment of the court ends the protracted legal confrontation between Honeywell and Ecobank which commenced in 2015.

In handing down the judgment, Justice Faji declared that a valid agreement was reached at various meetings between representatives of Honeywell and Ecobank on July 22, 2013 and in line with the agreement, Honeywell made payments to the Bank in order to settle its indebtedness. 

The judge further noted that rather than for Ecobank to keep to the terms of the Agreement, it  sought to introduce new terms.

Justice Faji insisted that while the installmental payment being made by Honeywell lasted, Ecobank did not at any time raise any objection(s) to the payments.

The court equally held that, “The amount now being claimed by the bank was not at any time mentioned in the meetings or series of correspondence with Honeywell.”

It would be recalled that Anchorage Leisures Ltd, Honeywell Flour Mills Plc. and Siloam Global Limited (all members of the Honeywell Group), had in August 2015, instituted a suit before the Federal High Court, Lagos seeking the determination of whether or not the companies are truly indebted to the bank following the payment of the sum of N3.5 billion as full and final settlement of their obligations to Ecobank, based on a mutual agreement between Honeywell and Ecobank.

While the trial lasted, Honeywell through its Head of Treasury and Finance, Oluwakemi Owasanoye told Justice Faji that by an agreement reached at a meeting held on July 22, 2013, the bank agreed to merge the collective indebtedness of Honeywell’s three subsidiaries, which amounted to N3.5billion.

Owasanoye added that part of the agreement reached with the bank was that N500million must be paid immediately, while the balance of N3billion would be paid before the exit of the Central Bank of Nigeria (CBN) examiners from the bank. 

The witness had equally informed the trial judge that Honeywell complied with the terms of the agreement, and thereafter wrote to inform the bank of its compliance and the need for the bank to formally discharge the company of any further obligation. 

She stated that the bank in its reply to the letter did not raise any objections. 

Honeywell, she said, was however surprised when the bank proceeded to demand for further payments in respect of the debt which had been fully liquidated for over a year.

She further stated in her testimony that when the dispute arose, the Company referred the matter to the Bankers' Committee which resolved the matter in favor of Honeywell.

On his part, while being cross examined by Honeywell’s lawyer, Olabode Olanipekun (SAN), Ecobank's Head of Corporate Communications, Elemi Agbor, argued that the agreement for the payment was for a two-term payment only. 

Agbor noted that the agreement stipulates that N500million must be paid that same day and the balance later. 

The witness was however not able to substantiate his assertion before the court.

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