•Orders Union Bank to pay £1m, N50m to NICON
From Godwin Tsa, Abuja
The High Court of Lagos State has nullified the unauthorised deduction of £130m including illegal penalties and charges made by Union Bank of Nigeria Plc from the account of NICON Investment Limited.
Specifically, the court held that the removal of the sum of £130,720,557.06 by Union Bank from the fixed deposit of the NICON Investment account with the bank, without due authorisation was wrongful and null and void.
Justice Olubunmi Abike-Fadipe further held that the defendant’s bank’s unilateral act of converting the fixed deposit of the claimant from British pounds sterling to US dollars and dollars to Naira is unauthorised and null and void.
Consequently, the court awarded the sum of £1m as damages against the Union Bank of Nigeria in favour of NICON Investment, for the bank’s breach of its fiduciary duties to NICON and negligence.
The judge equally awarded the sum of N50m in favour of NICON Investment against Union Bank as damages for unlawful deduction and illegal penalties and charges made on the account of the claimant by the defendant.
Justice Abike-Fadipe made the order while delivering judgement in a suit filed by NICON Investment Limited, Global Fleet Oil and Gas Ltd, and Senator Jiomh Ibrahim.
The counterclaimant is Union Bank Nigeria Plc, while NICON Investment Ltd, Global Fleet Oil and Gas Ltd and Jimoh Ibrahim are the defendants to the counterclaim.
Union Bank had in it’s counterclaim, said it deducted the money over a loan owed by the claimant’s sister company, Global Fleet Oil & Gas Limited.
However, the court set aside all acts of the bank on the claimant’s pound sterling fixed deposit account.
The court also held that it was “malicious” for the bank to join Jimoh Ibrahim as a defendant in its counterclaim.
The judge also directed Union Bank to avail the claimant (NICON Investment) of the statement of account of its fixed deposit account as well as reconciliation of same from inception till date.
“The defendant is directed to render an account of all the transactions on the claimant’s pound sterling fixed deposit account together with all accrued interests thereron.
“An order setting aside all acts of the defendant pertaining to and/or connected with and affecting the claimant’s pounds sterling fixed deposit account vis-a viz its conversion to S dollars, Naira, and unilateral liquidation of the indebtedness of Global Fleet Ltd and NICON Investment from the said account,” the court held.
The court held that the indebtedness of Global Fleet to the defendant, if any, is neither payable from £130,720,557.06, the fixed deposit of the claimant nor any amount deductible therefrom in respect of Global Fleet Ltd indebtedness.
The judge stated that Union Bank could not unilaterally deal with or make any deduction from the fixed deposit account of the claimant without the authorization, mandate, or consent of the signatories to the fixed account as on the mandate card.
She held that the defendant cannot unilaterally transfer money from the claimant’s account to liquidate Global Fleet indebtedness to it, without the due authorisation and or/ consent of the claimant.
The judge also held that the sum of N1,180,420,589.05, mentioned in the defendant’s letter dated April 28, 2010, as penalties and charges were deducted from the claimant’s account with the accruable interest at the prevailing banking rate.
She held: “For the second defendant to the first counterclaim against the defendant, reliefs one to seven is dismissed, judgment is entered in part on relief eight, as the second defendant to the first counterclaim did not prove that the First City Monument Bank and Oceanic Bank shares were part of the collateral to secure the facility granted vide exhibit D2.”
Justice Abike-Fadipe proceed to enter judgment for the claimant against the bank in reliefs one to nine and 12 to 17.
The judge held that the amount standing to the credit of the claimant in its fixed deposit account was to the tune of £130,720,557.06 as of April 30, 2010.
“The defendant bank’s unilateral act of converting the sum…from the claimant’s fixed deposit account to US Dollars without the due authorisation and/or mandate of the claimant is wrongful, null and void,” the judge held.
The judge added: “The defendant bank’s act of converting the fixed deposit of the claimant from British Pounds Sterling to US Dollars and Dollars to Naira is unauthorised and is null and void.
“The pounds sterling fixed deposit account of the claimant is not tied to the indebtedness of Global Fleet Ltd and/or meant in any way or manner whatsoever to provide security for the said debt.
“The defendant bank’s unilateral use of part of the claimant’s £130,720,557.06 to liquidate Global Fleet’s debt without the mandate and/or due authorisation of the claimant is wrongful, null and void.”
The judge granted “an order setting aside all acts of the bank pertaining to the claimant’s pound sterling fixed deposit account”.
The claimant commenced the action by writ of summons filed on May 28, 2010, accompanied by a statement of claim filed the same day and frontloaded processes.
The claimant amended its processes and filed an amended writ of summons dated October 16, 2020, and an amended statement of claim dated October 13, 2020.
The claimant asked for a declaration that it’s a duly registered and incorporated limited liability company operating a fixed deposit account domiciled with Union Bank, payable with demand interest.
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