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Firm files N12.86b suit against Bank over alleged contract breach

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Bank denies claim, seeks recovery of N2.1b ‘debt’ 

A Firm, Chuddy Goodness Investment Ltd, and its alter ego Chukwudi Goodness Okonkwo have prayed the Lagos High Court to compel Access Bank Plc to pay it N12, 866,421,700 for alleged breach of contract. 

The duo made the prayer before Justice W. Animahun in their amended statement of defence and counter-claim dated January 23, 2020 in response to Access Bank’s suit, marked LD/3304CMW/2017. 

Case management conference was closed on the matter December 7, 2020 and the file transferred to the Court Registry for assignment to a trial Judge.

A similar suit, marked FHC/L/CS/2369/2019, Chuddy Goodness Investment Ltd v Access Bank Plc is currently before Justice C.J. Aneke of the federal high court, Lagos and is slated to come up on March 25, 2021. 

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The duo averred through their team of counsel led by Adetunji Adedoyin-Adeniyi that the sum arose following alleged breach of fiduciary duties, excess bank charges/deductions; excess payment and unauthorized/illegal withdrawals from the 1st defendant’s bank account with No:0690227859. 

Access Bank is the sole claimant/defendant to counter-claim, while the firm and Mr Okonkwo are the first and second defendants/counter-claimants. 

But the bank in reply to the defendant’s amended statement of defence and defence to the counter-claim, denied being in breach of contract. 
It averred through its counsel, E. D. Onyeke, that defendants/counter-claimants were not entitled to any sum at all, and was still indebted to the bank in the sum of N2, 152,831,027.

The firm and Okonkwo’s claims in particular are; a declaration that the bank breached the fiduciary duties it owed to the company by virtue of the excess charges illegally imposed on its account.

An order directing the bank to pay N4, 866,421,723.16 to Chuddy Goodness Investment Ltd for excess bank charges/deductions; excess payment and unauthorized/illegal withdrawals from its bank account with No:0690227859.

An order directing the bank to pay the counter-claimants N6billion as general damages for the breach of contract, fiduciary duty, together with the attendant economic hardship from loss of business and emotional trauma experienced by the counter-claimants as a result of breach of the contract among others. 

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An order for payment of N2billion as aggravated damages for the criminal prosecution of Okonkwo by the EFCC, as a result of the failure of the bank’s breach of contract, fiduciary duty together with the attendant detention of Okonkwo. 

An order restraining the bank from appointing any receiver/manager in respect of the Deed of Assets Debenture executed by the Defendants/Counter-claims on any of their properties until the final determination of the suit.

Interest at the rate of 21 per cent per annum on the judgment sum till the day the whole judgment debt is finally liquidated by the defendant to counter-claim and N100million cost of the action.

They averred that in the course of Chuddy Goodness Investment Ltd’s business relationship with Access Bank, the bank granted facilities contained in the bank’s offer letters of July 22, 2014 and 19 September 2014, to facilitate the firm’s business. 

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They said the bank during its recapitalisation period, approached the firm sometime in February 2015 to buy the bank’s shares, which was predicated on the offer letter of March 2015 for the sum of N2.1billion with promise to increase it. 

Okonkwo, it was averred, said he was not disposed to buying the said shares, but due to the persistent approach by the officers of the bank, he reluctantly purchased shares worth N500million by bringing inflow from his accounts in the bank, but this was returned on the basis that a purchaser of such shares cannot use facility funds availed to it by the bank to buy shares in the same bank. 

They averred that this was what necessitated the firm to re-direct the funds and in-flow of N500m from its erstwhile Diamond Bank account towards liquidation of his indebtedness.

It was also averred that the bank afterwards offered the firm N4.3billion via an offer letter of March 18, 2015. It was claimed that pursuant to the conditions in the offer letter, the bank deducted 0.5 per cent of commitment enhancement fee of N11, 157,750 and management fee of N11,157,750 respectively totaling N22,315,500, but the loan facility was never disbursed to the firm. 

They further averred that they had suffered economic downturn, loss of business, loss of business relationship with business associates including arrest and six months detention by the Economic and Financial Crimes Commission (EFCC) “wherein restrictions were placed on his bank accounts to transact further businesses as well as his personal and official e-mail addresses blocked, which led to loss of business within Nigeria and outside the shores of Nigeria,” among others as a fallout of the bank’s conduct. 

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But in its response, Access Bank denied “in its entirety” claims that it made special offers of its shares to the duo. It stated that “Sometime in 2014, it offered rights issues to its shareholders to purchase its shares and the offer was successfully subscribed to by its existing shareholders and other interested parties, inclusive of the firm, and there was never a need to have made promises to the firm to subscribe to the rights issue, with a promise that it would enhance the credit facility availed the duo.”

It averred further that contrary to the defendants assertions, the bank “adhered to the terms of the offer letters which was the basis of the contract with defendants and that it was the defendants who, in a bid to obtain the loan facilities and concessions, made false promises which they never kept.”

The bank averred that it granted loan facility to the defendants, and they utilised it, but “it was their desperation not to pay the loan facilities that has resulted in the defendants making unsubstantiated allegations that the facilities were not disbursed to them…”

Access Bank added: “The defendants/Counter-Claimants are neither entitled to be paid any sum at all,” as they are “still indebted…in the sum of N2, 152,831,027. 40k plus continuing interest…as a result of the loan facilities availed them”. 

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