The Federal High Court in Lagos has finally ruled in favor of Honeywell Flour Mills as Ecobank Nigeria was ordered to pay a staggering N72.2bn in damages.
The ruling, handed down by Justice Mohammed Liman on Tuesday, brings an end to a long-standing and complex legal dispute between the two parties.
The origins of the legal battle date back to November 2015 when Ecobank secured ex-parte orders from the Federal High Court, freezing Honeywell Flour Mills’ assets, including all its bank accounts in a drastic move that nearly crippled the company as management was unable to meet obligations to suppliers, process Letters of Credit, or collect payments from distributors.
After enduring weeks of trying to run their business without access to their bank accounts, Honeywell Flour Mills sought relief from the court, eventually leading to the partial lifting of the asset freezing orders.
In March 2016, the Court of Appeal further overruled the ex-parte orders, allowing Honeywell Flour Mills to regain full access to its accounts without restrictions. The Court of Appeal stated that Ecobank’s initial application to freeze the assets should not have been granted in the first place.
Ecobank, dissatisfied with the ruling, appealed to the Supreme Court to overturn the decision of the Court of Appeal. However, in July 2018, the highest judicial authority upheld the Court of Appeal’s judgment, declaring that ex-parte injunctions were not permissible in winding-up petitions.
Following the Supreme Court’s verdict, Honeywell Flour Mills demanded compensation from Ecobank for the losses incurred due to the baseless ex-parte orders. Seeking damages in excess of N72bn, the company argued that the Supreme Court’s determination of the improper nature of the bank’s application rendered it frivolous.
In response, Ecobank contended that Honeywell Flour Mills failed to comply with the conditions outlined in their undertaking and thus should not be entitled to damages.
However, after careful examination of the evidence and thorough deliberation, the court sided with Honeywell Flour Mills, granting all four reliefs sought, culminating in the substantial N72.2bn damages award.
