Ecobank can’t renege on settlement agreement with Honeywell, court rules
The Honeywell Group yesterday emerged victorious in its protracted legal dispute against Ecobank with the judgement delivered by the Federal High Court, Lagos in which the court held that Honeywell’s payment of N3.5 Billion between 2013 and 2014 constitutes the full and final settlement of its indebtedness to Ecobank Nigeria Limited.
According to the judgement delivered by Justice Olayinka Faji, a valid agreement was reached at various meetings between representatives of Honeywell and Ecobank on the 22nd of July, 2013 and in line with this agreement, Honeywell made payments to the bank in order to settle its indebtedness. However same could not be said of Ecobank who rather than keep to the terms of the Agreement, sought to introduce new terms.
The court further held that all through the course of the payments being made by Honeywell, Ecobank did not at any time raise any objections.
It will be recalled that Anchorage Leisures Ltd, Honeywell Flour Mills Plc. and Siloam Global Limited (all members of the Honeywell Group), in August 2015, instituted a suit before the Federal High Court, Lagos seeking the determination of whether or not the companies are truly indebted to the bank following the payment of the sum of N3.5 billion as full and final settlement of their obligations to Ecobank, based on a mutual agreement between Honeywell and Ecobank.
Honeywell Group’s Head of Treasury and Finance, Oluwakemi Owasanoye told the court that by an agreement reached at a meeting held on July 22, 2013, the bank agreed to merge the collective indebtedness of Honeywell’s three subsidiaries, which amounted to N3.5billion.
Owasanoye added that part of the agreement reached with the bank was that N500million must be paid immediately, while the balance of N3billion would be paid before the exit of the Central Bank of Nigeria (CBN) examiners from the bank. According to her testimony, Honeywell complied with the terms of the agreement, and thereafter wrote to inform the bank of its compliance and the need for the bank to formally discharge the company of any further obligation.
She stated that the bank did not raise any objections. Honeywell, she said, was however surprised when the bank proceeded to demand for further payments in respect of the debt, which had been fully liquidated for over a year. She further stated in her testimony that when the dispute arose, the company referred the matter to the Bankers’ Committee, which resolved the matter in favour of Honeywell.
In his own testimony, Ecobank witness, Elemi Agbor, Head of Corporate Communications of the bank, while being cross-examined by Honeywell’s lawyer, Olabode Olanipekun, insisted that the agreement for the payment was for a two-term payment only. He said the agreement stipulates that N500million must be paid that same day and the balance later. He was however unable to substantiate his assertion before the court.