Written By Paul Ladi, Lagos
An Igbosere High Court of Lagos, has ordered United Bank of Africa (UBA) Plc, to pay a total sum of N20 million to a finance advisory company, Treasure Capital and Trusts Limited, for unlawfully obtaining a court order to freeze the account of the company, TheStreetReporters.com can authoritatively reports.
The court presided over by Justice Josephine Oyefeso ordered the bank to pay the sum of N10 million, for loss of reputation and another N10 million, as the cost of legal fee to discharge the order at a Lagos Federal High Court.
The Judge also ordered the bank to pay the sum of N250, 000, to the company, as legal fee for the case filed at the state high court.
The court further ordered that inquiry should be set up to ascertain the actual damage suffered by the company during the period its account was frozen in other to determine the amount of compensation to be awarded.
Justice Oyefeso, gave the order while delivering judgment in a N5.9 billion suit filed by the finance advisory company against UBA over unlawful freezing of its account in 10 commercial banks.
The finance advisory company had dragged UBA before Lagos High Court, sequel to an order of a Federal High Court, in Lagos which had dismissed a debt recovery suit filed against it by the bank.
The finance advisory company in its statement of claim filed before the court by his lawyer, Mr. Oluremi Ogunde SAN, stated that sometime in April 2011, when United Bank for Africa Plc instituted a civil action against the company and other parties at the Federal High Court in Lagos, in United Bank for Africa Plc versus Mobil Workers Multipurpose Cooperative Limited and four others.
UBA Plc specific claim against Treasure Capital and Trust Limited, who was fourth defendant in the suit, demanded to be paid the sum of N231, 500,000 being outstanding sum due and unpaid by the company, which was alleged to have been invested by the bank with the company out of the sum advanced by the bank to Multipurpose Cooperative Society Limited and interest at the rate of 22.5 per cent from 15 April, 2011 till judgement is delivered and till final liquidation.
It stated further that thereafter UBA filed an application before the court dated 9 June 2011, urging the court to freeze its assets including all funds standing to the credit of the company in ten commercial banks adding that the bank gave an undertaking to indemnify the company in damages if it turns out that the application seeking the order of the court to freeze the account ought not to have been made in the first place.
It also stated that while acceding to the request of the bank, the court directed the ten banks to take legal possession of all the sums of money and negotiable instruments standing to the credit of the company, keep same in an interest yielding account in the name of the Chief Registrar of the court as trustees of same until the debt has been paid.
The order of the court was also served on various financial institutions with whom the company had business at that time.
Upon service of the order on the company, the company filed an application to discharge or vacate the order but the bank opposed the application, hence the court refused to vacate the order.
However, the company on the 26 October, 2011 filed an application to strike out its name from the suit on the ground that the bank’s suit disclosed no reasonable cause of action against it and that if there was any cause of action at all against the company, such cause of action was outside the jurisdiction of the Federal High Court.
In a considered ruling, Federal High Court had struck out the name of the company from the suit for lack of reasonable cause of action against the company.
Before the name of the company was struck out, the business of the company was completely shut down for a period of two years owing to inability of the company to perform any transaction on the affected accounts as a result of the order of the court.
The company averred further that the order of the court which was widely published generated negative wide publicity for the company, frustrated several investment opportunities and also incited negative sympathy among the investment partners of the company.
The company further stated that the bank knew that it has no banker/customer relationship with it and that the company was not privy to the agreement between UBA and Mobil Workers Multi Purpose Cooperative Society Limited. It does not also at any time give any undertaken to pay the money invested by Mobil worker Multi purpose Cooperative society to the bank.
Treasure Capital and Trust Company Limited claimed that the sum of N5,904,788,790.08 as loss of income it suffered as a consequence of the order of the court wrongly procure and executed by UBA Plc against the company.
It also urged the court to declare that the order granted by the court against it was wrongfully procure by the bank.
However UBA in its defence file before the court by a Lagos Lawyer Barrister Paul Usoro, SAN, while denying the entire claim of the company urged the court to wholly dismiss the claim on the ground of being speculative and abuse of judicial process.
In her judgement, Justice Oyefeso said that it was not in doubt that the order obtained by UBA to freeze the account of Treasure Capital and Trusts Limited was wrongly obtained,the bank also signed undertaken to indemnify the company if it turned out that the order was wrongly procured,the order lasted for one year and eight months,therefore the company is entitled to damages,as it also suffered reputational damages.
Consequently, inquiry should be set up to determine amount of compensation to be awarded while UBA should pay N20million as reputational damage and cost of prosecuting the case at Federal high court in Lagos respectfully.