Business

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

AllinsuranceHUB reports that a shipping company, OAN Overseas Agency Nigeria Limited (OAN), has approached the federal High Court in Lagos to demand for the payment of the sum of $4,581,774.86 in compliance with a Supreme Court’s judgment.

OAN initiated an admiralty action in 2006 against the Vessel MT “Ocean Success” and Master of the Vessel MT “Ocean Success” and Bronwen Energy Trading Limited (BETL) in which it claimed the sum of $1,986,939.97 as an outstanding debt against BETL for port and cargo dues, ships’ charges and agency fees, as well as interest.

The money included the principal sum claimed by it plus interest which Ecobank undertook to pay when it issued a bank guarantee to secure OAN’s claims.

Ecobank, in order to secure the claims of OAN at the Federal High Court, issued a bank guarantee, numbered EBN/1346 on December 1, 2006, in favour of OAN Overseas Agency for $1.9million or whatever sum that may be adjudged by the Federal High Court and appellate courts on behalf of BETL.

INVEST IN IRAs, SECURE YOUR FUTURE

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

On March 14, 2011, the Federal High Court, in a judgment by Justice Dan Abutu (Chief Judge now retired), awarded OAN the sum of $1,986,939.97 with interest at the rate of 15 per cent per annum from November 23, 2006, to March 14, 2011, and another simple interest on the judgment sum at the rate of six per cent per annum until full liquidation.

The BETL appealed against the judgment and on December 9, 2014, the Court of Appeal delivered judgment that allowed the appeal in part, while sustaining the judgment of the Federal High Court.

But the OAN appealed to the Supreme Court against the part of the judgment that was not favourable to it and challenged the part of the judgment of the Court of Appeal where the court awarded $400,000 in favour of BETL without proof as required by law.

However, the BETL cross-appealed against the Court of Appeal judgment sustaining the award of $1,986,939.97 plus interests in favour of OAN requesting the Supreme Court to dismiss the claims of OAN and strike out the suit.

On February 18, 2022, the Supreme Court affirmed the Federal High Court and Court of Appeal judgments in favour of OAN and sustained the awards of the sum of $1,986,939.97 plus interest and dismissed BETL’s cross-appeal.

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

Based on the Supreme Court verdict, OAN demanded $4,581,774.86 from Ecobank, inclusive of interest, by virtue of the guarantee issued by Ecobank to pay to OAN any sum that might be awarded in its favour after all appeals.

Based on the final judgment of the Supreme Court and the guarantee issued by Ecobank, OAN demanded through its Counsel, Sylva Ogwemoh (SAN) of the firm of KMO Legal immediate payment of the total sum of $4,581,774.86 inclusive of interest awarded in favour of OAN by the Supreme Court in its final judgment delivered on February 18, 2022

The bank, in letters dated March 10 and March 11, 2022, acknowledged receipt of the letter.

“We wish to inform you that we are currently reviewing the contents of your letter and the attachments thereto. We crave your kind indulgence to revert to you before the end of the week,” Ecobank wrote on March 11 through its Company Secretary/Chief Legal Counsel, Mr. Kenneth Okere.

On March 22, the bank also wrote to OAN again through Okere, stating that it was still reviewing the Supreme Court’s judgment.

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

“As we have not concluded our review of the court judgments and contents of your letter, we are constrained to crave your further indulgence to grant us additional time up to March 30, 2022, to revert to you,” Okere wrote.

The Supreme Court, in a judgment that was delivered by Justice Mary Peter-Odili on February 18, 2022, struck out BETL’s cross-appeal and upheld OAN’s appeal.

The Justice of the Supreme Court held that “the preliminary objection on the competence of this cross-appeal succeeds and is upheld. The cross-appeal being incompetent without a possibility of redemption is therefore struck out.

“Finally, the main appeal succeeds in part. The cross-appeal fails and is struck out.”

Ecobank, after several weeks of requests for indulgence in responding to the demand for payment of the guarantee made by OAN and its counsel, finally denied liability under the bank guarantee.

It has now approached the Federal High in a suit filed on May 29, 2020, asking for an interpretation of the bank guarantee it issued and the judgments of the Court of Appeal and the Supreme Court.

It is the case of Ecobank that the guarantee it issued was for the release of the Vessel MT “Ocean Success.”

OAN has filed a defence to the suit stating that the action of Ecobank is an abuse of court process and that the bank guarantee issued by Ecobank does not require any interpretation given the clear and unequivocal wording of the bank guarantee.

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

OAN stated in its defence that it was obvious from the bank guarantee, and as it is customary in admiralty practice, that the guarantee was issued to secure the claims of OAN and not issued on behalf of the vessel that was not in any way connected with Ecobank.

It is also the case of OAN that, BETL being the party that applied for and paid the requisite consideration for the issuance of the bank guarantee and also the party on behalf of which the bank guarantee was issued by Ecobank to cover its liability or indebtedness to OAN after all appeals up to the Supreme Court, Ecobank has no choice than to honour the bank guarantee it issued in favour of OAN.

The OAN also filed a counterclaim against Ecobank seeking N1billion damages, among other reliefs.

OAN contended that Ecobank as a commercial bank in Nigeria has no legal basis not to honour the bank guarantee it willingly gave to avoid wrong signals being sent to the international community.

The suit, numbered FHC/L/CS/787/2022, came up for mention on July 20 before Justice Yellin Bogoro.

All the parties were represented. The plaintiff was represented by Mr. Ogute of the law firm of F. O. Akinrele and Co.

Firm Demands Compliance With Judgement On $4.5m Eco Bank Guarantee

Adeyinka Abdulsalami from Punuka Attorneys was present in court following the hearing notice served on their chambers to represent the second defendant.

He claimed he appeared out of respect for the court and that he did not have the instructions from the second defendant to represent it in the suit.

The second defendant has not also been formally served with the originating process filed by the plaintiff.

In the circumstance, the matter was adjourned till October 4, 2022, to enable parties to sort out the issue of service of process on the second defendant.


AllInsuranceHUB is a blog for everyone who seeks an informative, educative, and knowledge-based online insurance and investment community. We share Biographies, Top-notch investment tips, finance news, insurance policy details and much more. You can read and share thoughts, ideas, and opinions on the finance market and get real-time updates from around the globe.

IBEH C. JOE

Financial analyst, Entrepreneur, Blogger and Business model

Leave a Reply

Back to top button
%d bloggers like this: