On Tuesday, July 18, 2023, the Federal High Court in Lagos, presided over by Hon. Justice Liman, delivered a judgment in favour of Honeywell Flour Mills Plc (HFMP) in its damages suit against Ecobank Nigeria.
In his judgment, Hon. Justice Liman carefully considered the arguments presented by both parties and acknowledged the issues at hand. He granted all reliefs sought by HFMP, dismissing Ecobank’s request: The plaintiff was denied the use of funds in his account based on the ex parte order granted in favour of the defendant. It is therefore, my firm view that the Plaintiff is entitled to the amount claimed in relief 2. The argument of the defendant in his written address is therefore, not acceptable as the contents of the document are the best evidence and they speak for themselves, Justice Liman stated.
Justice Liman frowned at Ecobanks’s lawyer’s approach, stating that 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.
Bode Olanipekun, a Senior Advocate of Nigeria (SAN) and legal counsel representing HFMP, expressed his agreement with the court’s findings and commended the thoroughness of the judgment. He noted: 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.
The case dates back to 2015 when Ecobank obtained ex-parte orders to freeze the bank accounts of Honeywell Flour Mills under Suit Number FHC/L/CP/1689/2015. However, over time, these orders were modified, initially granting HFMP limited access to its accounts. Following Honeywell Flour Mills’ appeal to the Court of Appeal, the ex-parte orders were set aside, restoring HFMP’s full account operations.
Dissatisfied with the Court of Appeal’s ruling, Ecobank pursued further legal recourse by filing an appeal at the Supreme Court. However, the Supreme Court upheld the decision of the Court of Appeal and clarified that ex-parte injunctions are not permissible in winding-up petitions.
In light of the damages suffered by HFMP during the asset freezing order and in accordance with Ecobank’s previous undertaking, HFMP filed a lawsuit seeking substantial damages in the amount of N72.2 billion. The claims made by HFMP include losses due to foreign exchange devaluation, interest on unutilised cash balances, loss of revenue, and aggravated and exemplary damages.
Hon. Justice Liman’s judgment in the damages suit means Ecobank Nigeria is legally obligated to compensate HFMP with a sum of N 72.2 billion as a result of the damages caused.
In his concluding remarks, Justice Liman opined that I have no hesitation in granting reliefs in favour of the plaintiff. All four reliefs sought were granted by the court.