Home » Business & Economy » GTBank In N30bn Suit Dilemma

GTBank In N30bn Suit Dilemma

Failed legal gymnastics now threaten operations of Guaranty Trust Bank with N30 billion up in contest

Paul Yovo

Guaranty Trust Bank may have hit itself wrongly as four limited liability companies including Innoson Nigeria Ltd, Innoson Technical and Industrial Company, Innoson Vehicle Manufacturing Company, and Innoson Autoparts Manufacturing Company have slammed a N30 billion suit against it over economic and financial losses they suffered on account of an alleged illegal action of the bank. The companies contend in a suit filed before a Federal High Court Awka that the bank had caused its business accounts in 15 banks to be frozen using a court order said to have been improperly obtained.

According to the companies, the court order freezing its accounts were unjustified. A statement of claim filed before the court by counsel to the companies, Professor MaCarthy Mbadugha, traced the history to current hostility between the companies and the bank to September 2014 when Guaranty Trust Bank Plc allegedly served on Innoson Nigeria Ltd a court order dated September 1, 2014 in suit number FHC/L/ CS/1119/2014 issued by Justice Okon Abang restraining all commercial banks in Nigeria from accepting, honouring or giving effect in any manner whatsoever to any mandate or instruction presented to them by Innoson Nigeria Limited, or any of its agents or nominees for withdrawal of any sum of money standing to the credit of any account maintained by the company in all the banks.

Making the restraining order, which according to Justice Abang, was pending determination of the substantive suit, GTB also undertook to indemnify the company as to any loss that may be incurred in the unlikely event that the application ought not to have been granted. Instituting the suit against Innoson Nigeria Ltd and its other companies, GTBank alleged that the companies were indebted to it to the tune of N1.5billion. Prof. Mbadugha said the court order effectively grounded business activities of the companies making it difficult to discharge its business and functions as it maintained accounts in 15 out of the 18 banks listed in the suit by GTBank. However, event turned against GTBank when on June 10, 2015, following a successful legal defence by Prof. Mbadugha who argued that GTBank obtained the freeze order by means of suppression, concealment and failure to disclose material facts, the freeze order was set aside by Justice Saliu Saidu. Setting aside the freeze order, Justice Saidu also struck out the entire suit against the four companies indicating that the freeze order ought not have been made on grounds of concealment of facts.

Having suffered monumental business and economic losses including grounding of business activities, inability to clear goods at the ports, demurrage on imported production materials and loss of image before its clients, the companies are now asking the court for an order mandating the bank to indemnify it having pledged to do same in the event it was later proven that the order ought not to have been made. “Non-production of the companies resulted in loss of business and profit, deterioration of some of the raw materials, as they became unfit for use, staff were rendered redundant whilst they continue to pay salaries, some of the Chinese expatriates left the company for China while some of them were paid $66,000 per month for seven months during their redundancy to avoid heavy cost of searching for expertise of their calibre given their skills, non putting the machines into use resulted in the machines damaging in numbers”, Prof. Mbadugha had told the court.

For these, the companies ask against Guaranty Trust Bank “N20 billion being special damages arising from the bank’s unlawful freezing of the companies accounts in fifteen banks from 1st of September 2014 to 15th of June,2015, “N5 billion for reputational and injuring the companies “N5 billion as general damages and 22 percent interest on the sum claimed till judgement is delivered and thereafter at the same rate till liquidation of the judgement debt”. As a preliminary step, the court at Awka had ordered that the suit be served on Guaranty Trust Bank Plc at its Headquarters at Plot 1669 Oyin Jolayemi Street, Victoria Island Lagos.

%d bloggers like this: