TUESDAY, 27 JULY 2010  BY

A Lagos-Based firm, Atlantic Brothers Limited, (ABL), is set for a legal battle with Oceanic Bank International Plc for the alleged failure of the financial institution to credit N1.37 billion cheque it deposited into its (ABL) account at the bank.

 

The firm has consequently instituted a N4 billion suit against the bank before Justice Adesuyi Olateru-Olagbegi of the Lagos High Court.ABL also joined Ecobank Nigeria Plc in the suit, due to its alleged role in the transaction, but the court disagreed, ordering the name of Ecobank be struck out as co-defendant.

 

In the suit, Atlantic Brothers, the claimant had sought an order of the court directing Oceanic Bank to pay N1, 371,700,000.00, being the value of the cheque issued on May 9, 2008 by one Israel Ame of Messrs Crestgrade Oil and Gas limited.The claimant further demanded interest on the sum at the rate of 21 per cent a year, from June 6, 2008, being the maturity date for payment of the cheque.

 

Besides, the claimant demanded N2 billion as general damages from the bank and N1 million as the cost of the suit at the court.According to the fact of the case, the claimant averred that it sold and supplied fuel oil to Crestgrade Oil and Gas and in payment of the supplied fuel, Israel Ame, director in charge of operations in the oil and gas company, issued an Ecobank cheque No. 00000069 in the sum of N1, 371,700,000.00 to the claimant on May 9, 2008.

 

The claimant through Emenike Ubiaru, its counsel, averred that on June 2, 2008, it deposited the cheque into its Oceanic Bank account at Awolowo Road, Ikoyi branch for payment but till date, the bank has neither credited the said account with the money nor returned the cheque as unpaid to the claimant despite repeated visits and demands by the claimant and to whom no tangible information was given as to the status of the cheque or its cash value.The claimant further averred that the only information emanating from the bank was that being a large volume withdrawal, Ecobank, which is the paying bank, had not completed clearing activities on the cheque, hence the need to exercise patience and that the account would be credited to the tune of the cash in due course.

 

Moreover, the claimant averred that after the mandatory required three working days by clearing rules of the bank had elapsed and the cheque not returned as unpaid, neither was it credited to the account, it suspected foul play in the transaction and when it applied and obtained its statement of account, on July 21, 2008, it discovered for the first time and contrary to standard banking practice that there was a notice in the account quoted for June 5, 2008, which states that the cheque had been dishonoured, which made the claimant protest the situation to the bank since it runs contrary to the information given by the bank as to the status of the cheque, but the bank officials exhibited a confused and lack of clear understanding of the circumstances surrounding the transaction and could not offer any possible explanation.

 

The claimant contended that the bank’s failure to immediately inform it of the status of the transaction and return the cheque had deprived the claimant of the ability to take urgent steps to recover the cash value of the cheque from the drawer as both Israel Ame, the issuer of the cheque and Messrs Crestgrade Oil and Gas Limited had become incommunicado as all efforts to locate them in order to recover the debt proved abortive and it had no hope of ever being able to locate them again.

 

According to the claimant, the bank’s conduct in the transaction were indicative of the fact that it was in connivance with some third parties with the sole aim of depriving the claimant of the benefit of the cheque and the circumstance of this transaction was an example of how payments could be frustrated through deliberate acts in the banking industry.The claimant added that failure of the bank to credit the account had caused damages and untold hardship to the claimant, by bringing grievous harm to its business.

 

However, in a statement of defence filed by the bank through Folu Aremu, its counsel, the bank averred that upon dishonouring the cheque by Ecobank, it physically communicated the message to the claimant on June 4, 2008. About two weeks after informing the claimant, the claimant showed up at the bank in company of an assistant superintendent of police from the Special Fraud Unit of the police to demand the original cheque from the bank which they knew Ecobank was withholding.

 

The bank insisted that Ecobank never gave value to the said cheque and consequently, it could not credit the account of the claimant and by so doing, it neither acted fraudulently in the circumstances having discharged its duty as the collecting bank.The bank urged the court to dismiss the suit filed by the claimant with substantial cost against the claimant for bringing claims which were frivolous, vexatious, fraudulent and gold-digging, in the nature of a wild goose chase against the bank.

 

The bank also urged the court to award cost of N1.5 million against the claimant being the cost of avoidable burden needlessly and unnecessarily brought upon the bank in the defence of the suit.Later, counsel to the Oceanic Bank, sought an order to join Ecobank as co-defendant in the interest of effectual, effective and complete justice and for prevention of multiplicity of action.

 

The presiding judge had earlier granted the prayer of Oceanic Bank, however, counsel to Ecobank contended that it ought not to be joined as a party to the suit as the deal that warranted the suit was mainly between the claimant and Atlantic brothers.While striking out Ecobank’s name in the suit, Justice Olateru-Olagbegi ordered both the claimant and Oceanic Bank to file the necessary papers in order to have a speedy trial.

 

With the conclusion of the trial now, the court had ordered both parties to file their final written address and adjourned till September 21, 2010 for adoption of those written address.

 

Source:Guardian