Court awards N50m damages against AMCOM for negligence
By Onyewuchi Ojinnaka
A Federal High Court sitting in Ikoyi, Lagos has awarded general damages of N50 million against Asset Management Corporation of Nigeria (AMCON) being defendant in Suit Number FHC/L/CS/766/2022 for what it described as their ‘very, very negligence in carrying out their duties.’
The beneficiaries of the award are Mr Oyetola Olanipekun Alabi, Oreoluwa Christopher Alabi, E.R.S. Nigeria Limited and Atrium Projects Limited as plaintiffs.
This was the judgement delivered by Honourable Justice Chukwujekwu Aneke in the suit filed by the plaintiffs against the defendant.
Earlier in the judgement, the judge dismissed the preliminary objection filed by AMCON challenging the jurisdiction of the court to entertain and adjudicate the suit filed by the plaintiffs.
He held that the plaintiffs were justified in the circumstances of the instant case in not complying with the 90 days pre-action notice as contended by AMCON with regard to provisions of Section 43(2) of the AMCON Act .2019.
” Having resolved the two grounds or issues raised in the defendant’s preliminary objection against the defendant, the defendant’s preliminary objection dated and filed on October 13, 2023 is hereby dismissed” the judge ruled.
The plaintiffs had on April 27, 2022 filed Originating Summons dated same date, challenging the suit No FHC/PH/AMC/CS/01/2021 instituted against them by the AMCON through an Ex-parte application and obtained a court order freezing their accounts in various commercial banks.
Among the reliefs sought, the plaintiffs prayed the court to declare that the institution of the action by the defendant against them was mala fide, baseless, illegal, unlawful, unprovoked, unwarranted, unjustified, wrongful and constitutes an infringement of their right to life, and or property as guaranteed under the Constitution of the Federal Republic of Nigeria 1999(as amended) or an abuse or misuse of power under the Asset Management Corporation of Nigeria Act 2019( as amended);
That the plaintiffs were unjustifiably and wrongfully subjected to and suffered untoward and untold hardship, avoidable embarrassment, psychological trauma, business loss, impromptu legal expenses, emergency borrowings and loss of reputation for a period of three months as a result of illegal, unlawful, unprovoked and unwarranted freezing of their accounts in various banks.
That the plaintiffs are entitled to general and punitive damages in the sums of N50 million and N100 million respectively for the loss and suffering caused by the acts of the defendant.
The plaintiffs supported their application with 41 paragraphed affidavit wherein they stated that they have liquidated their outstanding indebtedness with the defendant as far back as February 2, 2012 and were given a letter dated March 15, 2012 titled “Letter of Non-indebtedness – Alabi Oyetola Olanipekun (the Release letter).
On January 11, 2021, the defendant instituted the suit against them through an Ex-parte application to freeze their accounts on the ground of alleged indebtedness to the United Bank for Africa purportedly sold to the defendant but on January 26, 2022, the court vacated the freezing order when it was clear that there was no debt owed the defendant. The defendant discontinued the suit after the freezing order was vacated.
However the AMCON stated in its defence that the duplicate copy of the letter of Non-indebtedness issued the 1st plaintiff was not in its file and as a result, the file was still kept in the active file section before being handed over to the defendant partners for recovery.
The defendant added that sometime in January 2022, while searching for another thing, it stumbled on an envelope which was to be disposed and upon opening the said envelope, saw the letter of Non-indebtedness issued the 1st plaintiff inside the said envelope. It immediately instructed counsel to withdraw the matter from the Federal High Court in Port-Harcourt and in compliance, it filed notice of discontinuance dated January 11, 2022.
AMCON submitted that it was ignorant of the existence of the letter of Release at the time the suit was instituted in Port-Harcourt. It urged the court to dismiss the plaintiffs Originating Summons.
In his Judgement on the suit, Honourable Justice Chukwujekwu Aneke said that having considered the submissions of both parties and the circumstances of the case, noted that AMCON admitted that the 1st plaintiff had paid his debt and was discharged from indebtedness suit. The defendant also admitted that the plaintiffs have suffered losses as a result of their negligence and that is why they submitted that the plaintiffs could have mitigated their losses.
“I do not believe that the defendant acted in bad faith or in deliberate abuse of their powers.
“I believe the defendant was just negligent. Very, very negligence.
“In any case the negligent acts of the defendant had caused the 1st to 5th plaintiffs serious hardships and losses.
” In the circumstance of this case, I award general damages of N50, 000,000.00(Fifty Million Naira) to the 1st to 5th plaintiffs at the rate of N10 million each. I also give 10 percent per annum post judgement interest.
“All other monetary claims are hereby dismissed.” Justice Aneke ordered.
