The Federal High Court in Lagos has issued a ruling ordering Ecobank Nigeria to pay Honeywell Flour Mills the sum of N72.2 billion in damages. The legal battle between the two companies, which began in November 2015, involved a series of allegations and counterclaims.
The dispute escalated when Ecobank obtained ex-parte orders from the court to freeze Honeywell Flour Mills’ assets, including all its bank accounts. This action severely impacted Honeywell’s business operations, hindering their ability to meet obligations to stakeholders and causing reputational and operational damage.
After weeks of struggling without access to their bank accounts, Honeywell Flour Mills sought to have the asset freezing orders discharged. In March 2016, the Court of Appeal ruled in their favor, allowing them to operate their accounts without restrictions and stating that the bank’s application to freeze assets was not permissible.
Following an appeal by Ecobank, the Supreme Court upheld the Court of Appeal’s decision, confirming that the ex-parte injunction should not have been filed in a winding-up petition. Honeywell Flour Mills then demanded compensation from Ecobank for the loss suffered due to the improper ex-parte order, seeking damages exceeding N72 billion.
Opinion:
The court’s ruling in favor of Honeywell Flour Mills brings an end to a long-standing legal battle and provides significant compensation for the damages they endured due to the asset freezing orders. This ruling emphasizes the importance of ensuring fair and just legal proceedings in business disputes. It also serves as a reminder to financial institutions to exercise caution and responsibility when seeking ex-parte orders that could have severe consequences for other businesses. The substantial damages awarded to Honeywell Flour Mills underscore the significance of accountability and adherence to legal processes in the banking sector.