Appeal Court Overturns Judgment In $25m Loan Dispute, Validates Foreign Jurisdiction Clause

The Court of Appeal has overturned a Lagos High Court judgment in favour of Panasonic Industries Limited, upholding Afreximbank’s right to recover a $25 million loan in US dollars and endorsing the agreement that disputes should be resolved in English courts.

The appellate court, presided over by Justice Yargata Nimpar, ruled in favour of Afreximbank in a dispute over a receivables-backed loan of up to $25 million granted to Panasonic Industries Limited in 2012, with Sterling Bank Plc acting as the local agent.

The judgment reverses the earlier decision delivered by Justice Olufolake Olufolashade Adewunmi-Oshinon on 25th June, 2024, which had dismissed Afreximbank’s objection and granted key reliefs to Panasonic Industries.

The dispute arose when Afreximbank demanded repayment in US dollars instead of naira.
Panasonic and its chairman, Chief Patrick Chidolue, filed the suit in Lagos, where the High Court dismissed the bank’s preliminary objections and ruled in their favour.

Afreximbank then appealed to the Court of Appeal, with Sterling Bank lodging a related appeal.
The Appellate upheld all six issues raised by Afreximbank, agreeing with lead counsel, Onyemauche Ibezim.

With respect to jurisdiction, the court noted that the parties had agreed to submit disputes to the English courts.

The court also recognised Afreximbank’s diplomatic immunity and ruled that the case was statute-barred.

The appellate court held, on the substantive issues, that the loan was payable in US dollars at the exchange rate on the day of repayment.

It found that Afreximbank’s demand was consistent with the contract, which was governed by English law.

In Sterling Bank’s appeal, the court agreed that the case was time-barred and criticised the trial court for declaring the agreement illegal without hearing from the parties.

The court upheld the agreement’s validity and enforceability, dismissed both appeals, and awarded costs against Panasonic and Chidolue.