Appeal Court orders CJ to reassign Honeywell/Ecobank suit

(Nigeria) The Court of Appeal in Lagos has directed Chief Judge of the Federal High Court to re-assign a winding-up petition by Ecobank Nigeria Limited against Honeywell Flour Mills Plc.

Justice Abimbola Obaseki-Adejumo said justice demands that both sides must be heard. She made no order as to cost.

The justice upheld an appeal by Honeywell against an ex-parte order made by Justice Mohammed Yunusa of Federal High Court, Lagos, last December 4.

The company appealed against partial freezing of its accounts following an application by Ecobank’s lawyer Mr Kunle Ogunba, SAN.

Justice Yunusa had restrained chairman of Honeywell Group, Dr Oba Otukedo, the company’s directors and subsidiaries from withdrawing from any bank or financial institution.

But Honeywell, through its lawyer Chief Wole Olanipekun, SAN, sought to discharge the order, contending that it was an abuse of court process.

Justice Yunusa in his ruling held that the company could withdraw up to N60million in a month pending when the suit is heard and determined to enable Honeywell Group meet its financial obligations by withdrawing N15million only per week.

 Dissatisfied with the ruling, Honeywell appealed, insisting that it wants full access to its funds.   

The suit is sequel to an alleged N3. 5 billion unpaid loan facility which Ecobank gave Honeywell.

Justice Obaseki-Adejumo said Justice Yunusa made the ex-parte order without notice to Honeywell in violation of rules guiding winding-up petitions.

According to her, the rules state that every application in such a petition shall be by motion on notice to the person against whom the order was made.

“Justice of the case demands that both side be heard. The ruling of the Federal High Court is hereby set aside. The petition shall be assigned to another judge for necessary action. Parties shall bear their costs,” she held.

Ecobank had also appealed a ruling by Justice Mohammed Idris striking out contempt proceedings initiated against it by Achorage Leisures Limited, a subsidiary of Honeywell Group.

Anchorage Leisures and its sister company Siloam Global Services Limited accused the bank of disobeying an earlier directive by the judge that all parties should maintain status ante-bellum.

Justice Mohammed Idris had last August 10 made an order of interim injunction restraining the bank from publishing the plaintiffs’ name as debtors.

The judge also ordered parties to maintain status quo pending hearing of the plaintiffs’ suit against Ecobank.

But while the suit was pending, Ecobank filed other suits before other judges in a bid to recover its debt from Honeywell Group and its chairman Oba Otudeko.

Honeywell’s lawyers filed Form 48 and Form 49, urging the court to hold the bank in contempt.

But Justice Idris struck out the contempt proceedings on the basis that no proper service was effected on the alleged contemnors.

Ogunba had argued on appeal that Justice Idris ought to have dismissed the proceedings rather than striking it out (which means it could be re-filed).

But the appellate court upheld Justice Idris’ ruling, adding that “the court cannot dissipate energy on an issue over which it had no jurisdiction.”

In a third appeal, Ecobank had challenged the lower court’s jurisdiction, but Justice Obaseki-Adejumo upheld Justice Idris’ assumption of jurisdiction, adding that there was a banker-customer relationship between Ecobank and Otudeko which vested the judge with jurisdiction.