Court asks Ecobank not to renege on settlement agreement with Honeywell

A federal high court in Lagos on Friday held that Honeywell’s payment of N3.5 billion between 2013 and 2014 constitutes the full and final settlement of its indebtedness to Ecobank Nigeria Limited.

Olayinka Faji, the presiding judge, ruled that a valid agreement was reached at various meetings between representatives of Honeywell and Ecobank on July 22, 2013, and that in line with this agreement, Honeywell made payments to the bank in order to settle its indebtedness.

The judge held that all through the course of payments in installment made by Honeywell, Ecobank did not at any time raise any objections.

He said the amount now being claimed by the bank was not at any time mentioned in the meetings or series of correspondence with Honeywell.

Anchorage Leisures Ltd, Honeywell Flour Mills Plc. and Siloam Global Limited (all members of the Honeywell Group), in August 2015, instituted a suit before the federal high court, Lagos seeking the determination of whether or not the companies are truly indebted to the bank following the payment of N3.5 billion as full and final settlement of their obligations to Ecobank, based on a mutual agreement between Honeywell and Ecobank.

Testifying in court, Oluwakemi Owasanoye, Honeywell group’s head of treasury and finance, told the court that by an agreement reached at a meeting held in July 2013, the bank agreed to merge the collective indebtedness of Honeywell’s three subsidiaries, which amounted to N3.5billion.

Owasanoye added that part of the agreement reached with the bank was that N500million must be paid immediately, while the balance of N 3billion would be paid before the exit of the Central Bank of Nigeria (CBN) examiners from the bank.

In his own testimony, Elemi Agbor, Ecobank witness, head of corporate communications of the bank, while being cross examined by Honeywell’s lawyer, Olabode Olanipekun (SAN), insisted that the agreement for the payment was for a two-term payment only. He said the agreement stipulates that N500million must be paid that same day and the balance later.

But the judge ruled in favour of Honeywell.
In his reaction, Kunle Ogunba, the bank’s lawyer, said he would consult with his client with a view to filing the appeal after further reviewing the judgment.

“Of course we do not agree with the judgment because the plaintiffs are still indebted to my client. We’ll definitely challenge the judgment on appeal,” Ogunba told journalists shortly after the ruling.