Court’s verdict: Ecobank cannot renege on settlement agreement with Honeywell

 
The Honeywell Group, on Friday, emerged victorious in its protracted legal dispute against Ecobank with the judgement delivered by the Federal High Court, Lagos.
The court 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.
 
According to the judgement delivered by Justice Olayinka Faji, a valid agreement was reached at various meetings between representatives of Honeywell and Ecobank on the 22nd of July, 2013 and in line with this agreement, Honeywell made payments to the Bank in order to settle its indebtedness. However same could not be said of Ecobank who rather than keep to the terms of the Agreement, sought to introduce new terms.
 
The court further held that all through the course of the instalmental payments being made by Honeywell, Ecobank did not at any time raise any objections to the payments.
The amount now being claimed by the bank was not at any time mentioned in the meetings or series of correspondence with Honeywell.
It will be recalled that 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 the sum 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 during the trial, Honeywell Group’s Head of Treasury and Finance, Oluwakemi Owasanoye, told the court that by an agreement reached at a meeting held on July 22, 2013, the bank agreed to merge the collective indebtedness of Honeywell’s three subsidiaries, which amounted to N3.5 billion.
Owasanoye added that part of the agreement reached with the bank was that N500 million must be paid immediately, while the balance of N3 billion would be paid before the exit of the Central Bank of Nigeria (CBN) examiners from the bank. According to her testimony, Honeywell complied with the terms of the agreement, and, thereafter, wrote to inform the bank of its compliance and the need for the bank to formally discharge the company of any further obligation.
She stated that the bank in its reply to the letter did not raise any objections.
Honeywell, she said, was, however, surprised when the bank proceeded to demand for further payments in respect of the debt which had been fully liquidated for over a year.
She further stated in her testimony that when the dispute arose, the company referred the matter to the Bankers’ Committee which resolved the matter in favour of Honeywell.
In his testimony, Ecobank witness, Mr Elemi Agbor, Head of Corporate Communications of the bank, while being cross examined by Honeywell’s lawyer, Mr Olabode Olanipekun (SAN), insisted that the agreement for the payment was for a two-term payment only.
He said the agreement stipulates that N500 million must be paid that same day and the balance later. He was, however, unable to substantiate his assertion before the court.
The judgement of Justice Faji gives victory to Honeywell in the protracted legal tussle which commenced in 2015.