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2009-07-07:Illegal Transfer: Appeal Court Orders Bank To Pay N152m

By Wale Igbintade

The Court of Appeal, Lagos Division, has ordered Intercontinental Bank Plc to pay the sum of N151, 204, 522.50 to Olam Nigeria Limited being damage suffered as a result of wrongful diversion of cheques paid into the bank's account for the importation of 80, 000 bags of sugar supplied to the Nigerian Bottling Company, (NBC).

Delivering judgment in appeal No CA\L\497\03 filed by Olam Nigeria Limited, Justice Roseline Nwodo set aside the judgment of the lower court and upheld the appeal of the appellant.

The court held that that the lower court, presided over by Justice A B Adeniji erred when it dismissed the claim instituted against the bank.

Besides, the court held that Intercontinental Bank wrongfully denied the appellant the use of the said money despite repeated demands.

Justice A B Adeniji had on November 22, 2002 dismissed the suit instituted against the bank for lack of merit.

Dissatisfied, the appellant approached Court of Appeal to set aside the judgment of the lower court insisting that there was a miscarriage of justice.

Around May 1998, the appellant entered into an agreement with Pacers Multi-Dynamics Limited to supply 80, 000 bags of sugar to the NBC on behalf of Pacers Multi-Dynamics Limited.

Pursuant to the agreement, it was allegedly agreed that payment in respect of the 80, 000 bags of sugar would be made through NBC cheques to be paid into an escrow account which would be opened with the defendant (Intercontinental Bank).

The appellant in its statement of claim filed by its lawyer, Juliet Chunu from the law firm of Chris Ogunbanjo and Co. averred that the bank was notified vide the Board Resolution dated May 11, 1998 that the account was to be used specifically for the relationship between the appellant and Pacers Multi-Dynamics Limited and that all payment by the NBC into the account would be for repatriation to Olam Nigeria Limited.

The appellant further stated that without any notification to either the NBC or the appellant of the bank's decision not to open the escrow account, the bank negligently and wrongfully collected various cheques and lodged all of them into Pacer Multi-Dynamics Limited current account.

The appellant further averred that all the cheques were duly marked "Account Payee Only" and "Not Negotiable" but the bank officials wrongfully lodged the cheques into Pacer's account.

However, the defendant through its counsel F O Fagbohungbe (SAN) in its Statement of defence stated that between October 6, 1996 and May 29 1998 overdraft facilities totaling N500 million were granted to Pacer Multi-Dynamics Limited by the bank.

The bank further added that even though the facilities had long matured for repayment by Pacers, the company failed to repay and the debt remains unpaid till date.

Besides, the bank stated that between June 10, 1998 and July 8, 1998, the NBC paid a total sum of N152 million into Pacers account with the bank.

The bank maintained that the money (N152 million) was used to defray part of Pacers N500 million debts owed to the bank with Pacers knowledge and consent.

Source:Daily Independent

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