Honeywell Wins N72.2bn Damages Case Against Ecobank

Honeywell Flour Mills Plc (HFMP) has emerged triumphant in a damages case against Ecobank Nigeria. The ruling, delivered on Tuesday by the Federal High Court, has settled a protracted legal battle between the food manufacturing company and the banking institution.

In 2018, HFMP filed a suit against Ecobank, seeking damages in the excess of N72 billion, over the bank’s decision to freeze its assets in November 2015 after obtaining ex-parte orders from the Federal High Court. Honeywell was, however, able to successfully regain full access to its assets in 2016, after the Court of Appeal overturned the Federal High Court’s ex-parte orders.

In 2018, the Supreme Court ultimately upheld the Court of Appeal ruling after it was approached by Ecobank to overturn the decision to return full access to Honeywell Flour Mills.

Of particular importance in the hotly-contested case is the fact that Ecobank, in its initial application, submitted an undertaking to compensate Honeywell Flour Mills for any harm or losses suffered as a result of the ex-parte order, if it is determined that the application was without merit.

Honeywell Flour Mills, therefore, told the Federal High Court it was seeking damages based on this undertaking after the Supreme Court determined that the ex-parte orders obtained by the bank were improper.

During the hearing of the suit over the payment of damages on Tuesday, Hon. Justice Liman dismissed Ecobank’s preliminary objection and expressed his displeasure with the use of an ex parte order to freeze assets:

To him, “the purpose of an undertaking to pay damages has been held in a legion of cases to indemnify the party for the losses he may suffer on the bases of an ex parte order. Note that Rule 4 of the Winding Up Rules provides that all applications which affect the rights of parties in a winding-up proceeding must be made on notice.

“The provisions of the winding up rules are very clear and unambiguous. The defendant cannot claim ignorance of this provision as ignorance of the law is no excuse and it is even more inexcusable if it is committed by a lawyer. The ex parte application was therefore made ultra vires.”

All four reliefs sought by HFMP to the tune of N72.2 billion were granted in its entirety by Liman J sitting at the Federal High Court: “The defendant’s arguments in this regard cannot stand….I have no hesitation in granting relief in favour of the plaintiff.”

The judge awarded Honeywell Flour Mills damages, saying, “The argument of the defendant has no basis.

In his reaction to the win, Honeywell lead counsel, Bode Olanipekun, SAN expressed his satisfaction with the ruling.

He noted that: “it’s a commendable decision and precedent in an area of our jurisprudence that has been scarcely tested. The court has awarded damages in a claim brought on the premise of an undertaking given for the grant of ex parte orders which both the Court of Appeal and Supreme Court have found were improperly sought and granted.”

Business experts and analysts believe that the impact of this court decision extends beyond the confines of the specific legal case.