Home Business Appeal Court Awards N2.5 billion Damages Against Skye Bank

Appeal Court Awards N2.5 billion Damages Against Skye Bank

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By Temitope Adedeji, Akure

An ominous silence suddenly descended on the Court of Appeal sitting in Akure, Ondo State on Tuesday as a judgement was passed against Skye Bank Nigeria Plc.

The bank was asked to pay the sum of N2.5billion as damages for a breach of contract against Tuns Farm Nigeria Plc, Osogbo.

In the  judgment delivered by Justice Denton West, the court upheld the earlier judgment of an Osun State High Court sitting in Osogbo, which had in March last year ordered Skye Bank Nigeria Plc to pay N2.5billion as damages to the farm.

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The three-member panel of judges, while dismissing the appeal filed by Skye Bank Nigeria Plc, also averred that the lower court had the right to award both special and general damages to the appellant for breach of contract.

Justice Oyejide Falola of an Osogbo High Court had last year ruled that Skye Bank Nigeria Plc erred in law by the non-fulfilment of the contractual agreement entered into over a loan facility of N2billion granted the farm by CBN.

Justice Falola also ruled that the bank exhibited poor corporate governance and poor diligence in handling the Central Bank of Nigeria (CBN) loan, which was paid into the account of Skye Bank Plc for disbursement to the bank customer.

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Tuns Farm Nigeria Limited had dragged Osogbo Branch of Skye Bank Plc before the court for disbursing the sum of N300million out of the N2billion loan it secured from CBN under a special loan facility called Commercial Agric Credit Scheme.

According to the plaintiff, efforts made by the plaintiff for the release of the balance of N1.7billion did not yield any positive result as the bank held that it had used the balance to offset a loan previously obtained by the farm.

But the plaintiff disagreed with the arrangement, saying the previous loan had been taken over by the Asset Management Company of Nigeria (AMCON), prompting the court action.

The bank, however, appealed the judgment of the court by filing an appeal at the Akure Division of the Court of Appeal.

However, the Court of Appeal dismissed the appeal for lack of merit and ordered the bank to pay the damages.

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Justice West held that, “Banks should maintain the economic buoyancy of Nigeria and beneficiaries of credit facilities should use the facility for the benefit of the nation to reduce the level of unemployment in the country.”

The court overruled the preliminary objection of the appellant and awarded N2.4billion as Special Damages and N150million as General Damages against the bank.

Justice West maintained that “the Respondent needs special damages for breach of contract, having fulfilled all conditions for the release of the credit facility.”

The lead counsel to the Appellant and Respondent, Messrs Dipo Olasope and Alex Owoeye respectively, hailed the judgment.

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