Refund N19.5m Bond to U-MEC company, Court orders Ecobank
By Jude-Ken Ojinnaka
A Federal High Court sitting in Lagos has ordered Ecobank Nigeria Limited to forthwith, refund/ pay back the sum of N19,526,919 to U-MEC Nigeria Limited, being the amount of money given to the bank on February 25, 2020 to raise/issue Indemnity Bond/Guarantee ENG/GO4400 in favour of the Nigeria Customs Service.
The order was given to Ecobank by Justice Ambrose Lewis Allagoa in a judgement he delivered recently on suit numbered FHC/L/CS/344/2022 between U-MEC Nigeria Limited (plaintiff) and Ecobank Nigeria Limited (defendant).
The judge also declared that the plaintiff having established the loss it sustained as a result of the failure/refusal of the bank to refund the bond sum of N19,526,919 after becoming aware of the judgement delivered on September 28, 2021 in suit number FHC/L/CS/177/2021, it is entitled to the award of simple interest.
The court held that basis for claiming same by the Nigerian Customs Service have since been invalidated and/ or struck down by virtue of the judgement of the court delivered on September 28, 2021 in suit number FHC/L/CS/177/2021 by Justice Yellim Bogoro.
The court held as totally ‘unfounded and baseless’ the argument of the defendant (Ecobank) that having gotten judgement against the Nigerian Customs Service, the proper step for the plaintiff to have taken is to forward a demand letter to the Nigerian Customs Service requesting them to withdraw the call made on the bank in respect of the bond/ guarantee and that it was not done by the plaintiff as well as the fact that the said judgement was not brought to the attention of the defendant until the institution of the instant suit
The court further held that upon the delivery of the said judgement by the court, there is no duty on the plaintiff to demand the Nigerian Customs Service rescind its letter of demand on the defendant for the payment of the bond, adding that there is evidence before the court that the plaintiff’s solicitor wrote two letters to the defendant dated December 10, 2020 and November 1, 2021 respectively, demanding a refund of its money with the defendant.
The court noted that these two letters were duly delivered to the defendant consequent upon the judgement in suit number FHC/L/CS/177/2021, resolving that the issue regarding the said levy were neither acknowledged nor responded to by the defendant.
“The court said: “It would therefore be unwholesome and uncharitable for the defendant to turn round and make its wanton conduct in the circumstances, the basis for repudiating its responsibility to the plaintiff.
Consequently, ” the bank is hereby ordered to forthwith refund and/or pay back to the plaintiff the bond/guarantee sum of N19,526,919.
“The bank is ordered to pay the plaintiff simple interest on the above said sum at the rate of 18.5 percent per annum, being the current CBN approved interest rate from November 2, 2021 until the said bond sum of N19, 526,919 is fully refunded by the bank to the plaintiff.
However, the court refused the award of compound interest against the bank as pleaded by the plaintiff.
The judge said: “I agree as submitted by the defendant that given the nature of the transaction between the parties, that a case for award of compound interest has not been established by the plaintiff.
In the suit, U-MEC Nigeria Limited by its originating summons dated and filed February 25, 2022, prayed the court for the following reliefs:
“A declaration that it is entitled to be refunded by the defendant the sum of N19 526,919, being the amount of money it gave to the defendant on or about February 25, 2020 with the instruction to raise and issue indemnity bond/guarantee No ENG/G04400 which was in writing in favour of the Nigerian Customs Service dated February 25, 2020.
“An order of the honourable court directing and/or ordering the defendant to refund to the plaintiff forthwith the sum of N19,526,919, only, being the amount of money given to the defendant by the plaintiff on or about February 25, 2020 to raise and/or issue indemnity bond/ guarantee No ENG/G04400 in favour of the Nigerian Customs Service dated February 25, 2020.
“Thirty (30) percent compound interest rate per annum on the above stated N19,526,919 from June 1, 2020 till judgement is given in this case and 10 percent compound interest on the judgement sum from the date of judgement till the defendant pays in full the judgement sum to the plaintiff.
“N10 million general damages against the defendant for breach of contract for failing, neglecting and/ or refusing to refund the above stated sum to the plaintiff when the said sum was due to be refunded to the plaintiff on or before June 1, 2020 despite repeated demands by the plaintiff for the refund of the money.
“And for such further order or other orders as the court may deem fit to make in the circumstances.
The originating summons was supported by an affidavit of twenty-three (23) paragraphs sworn to by one Augustine Ogboi Kihodu, the business manager of the plaintiff with four exhibits attached thereto and a written address dated and filed on February 25, 2022.
In opposition, the bank filed a counter affidavit of twenty-four (24) paragraphs sworn to by one Rachel Lawson, a Relationship officer in the employment of the defendant bank, with five (5) exhibits attached thereto, and also a written address dated June 9, 2022 , filed on June 10, 2022. wherein it distilled a lone issue for determination.
The bank submitted that in view of the judgement entered against the Nigerian Customs Service in suit number FHC/L/CS/177/2021, it behoves on the Nigerian Customs Service to withdraw the demand made on the bank in respect of the bond issued in their favour as the honourable court did not make a pronouncement invalidating the bond issued by the bank.
The bank further submitted that having gotten judgement against the Nigerian Customs Service, the proper step for the plaintiff was to forward a demand letter to the Nigerian Customs Service requesting them to withdraw the call made on the bank in respect of the bond/guarantee, contending that it was not done by the plaintiff.
It further contended that the said judgement was not brought to the attention of the defendant until the institution of this suit.
The defendant contended that it is not hostile to a request to release the sum of N19,526,919 to the plaintiff, but it however requires the Nigerian Customs Service to withdraw the demand made on the bond or an order of court directing it to return the money to the plaintiff.
The facts of the case is that a Sixty-five (65) levy was placed by the Nigerian Customs Service on the plaintiff’s imported disposable syringes, insulin syringes and disposable sterile needles as a result of which a bond in the sum of N19,526,919 was issued through the defendant on behalf of the plaintiff with the Nigerian Customs Service as the beneficiary.
On September 28, 2021, the court presided over by Justice Yellim Bogoro delivered judgement on suit number FHC/ L/ CS/ 177/2021 whereby the court restrained the Nigerian Customs Service by itself, its agents, privies from imposing, demanding and/ or collecting directly or indirectly by whatsoever means such 65 percent levy from the plaintiff on the disposable syringes, insulin syringes, and disposable sterile needles.
The judgement of September 28, 2021 prompted the plaintiff to write a letter dated November 1, 2021 to the bank notifying it of the said judgement and requested for a refund of the bond sum with accrued interest.