For alleged breach of
contract, two companies – Sunlek Investment Limited and Sunsteel Industries
Limited – have dragged First City Monument Bank (FCMB) to a Federal High Court,
Lagos, claiming N7billion.
In a 126 paragraph statement of claim
accompanied by another 27 paragraphs of a witness sworn to on oath and filed
before the court by John Olusegun Odubela, a SAnior advocate of Nigeria (SAN),the
two companies claim that in May 2013, they operated loan accounts with FCMB
following which disbursements were made for all letters of credit/loan
facilities by the bank for the importation of raw materials.
The companies also claim that till date, they
have neither been given the particulars of the loan facility account nor has
any statements of the account.
The plaintiffs alleged further that by
commitment letter dated May 23, 2013 and the term sheet for facility duly
signed /executed by the two parties, the bank undertook to fund, on
fully-underwritten basis, the debt finance of $1,500,000 and
N422.5million.Thereafter, other loan facilities were granted to the companies
by the bank.
Total amount of letters of credit opened by the
bank in favour of the companies stood at $8,003,247.5. the two companies
contributed 10% based on the terms of the grant of the various offer for
facility utilized to open letters of credit from 22nd March 2013 to September
2017. The loans facilities were reportedly well secured.
The companies contended that from the records
available to them, they have fully cleared their indebtedness to the Bank.
However, they were surprised when they received
letters from the bank stating that their indebtedness to the bank as at March
14, 2019 was N1,129 884,104.72 and that this should be liquidated within 14
days.
Consequently, they engaged a firm to audit the account.
The plaintiffs through a letter and their solicitor’s letter requested for
statements of the loan accounts from the bank it deliberately refused, failed
and neglected to make available the said statements.
But from a forensic analysis of their accounts,
the plaintiffs contended that they are not in any way indebted to the bank in
the sum of N1,129,884,104.72.
Furthermore, the forensic audit revealed that in
two transactions carried out on letter of credit, substantial volume of the
products was damaged. The value of items purchased by the letters of credit was
in the sum of $1,999,965 for the importation of cold rolled steel strips,
galvanized steel strips and Zinc wire from Chemetals (HK) Limited, Unit
1105H/F, Lippo Center 89,Queens Way Hong Kong.
The claimants argued that FCMB was solely and
unilaterally liable to undertake all the risk Insurance policy Clause A for the
consignment/raw material to be imported by virtue of the letter of credit.
The bank solely negotiated insurance policy
obtained for the products purchased and appointed Mansard Insurance Plc to
provide cover Clause C for the importation of the consignment.
Upon taking delivery of the consignment after
payment of custom duties and port charges, it was discovered that a large
volume of the said consignment was in various forms of damaged conditions.
The plaintiffs claimed they informed the bank
about the damaged consignment and the need to pursue insurance claim and it
bank requested for documents from the officers of the plaintiffs which were
duly sent.
However, the agent of the bank sent a report to
the plaintiffs to inform them that from the nature of damages to some of the
products, the insurance policy, being a Clause C policy as undertaken by the
bank was not sufficient to cover the nature of loss from the said damages to
the products. The total value of the consignment damaged was put at $628,386.23
and N336,136.692.66.
The plaintiffs contended that the bank ought to
have undertaken an all risk insurance policy cover with the insurance company.
As a result of the damages to the consignment, they were not fit for use and
could not be refined in the plaintiffs’ machines and remained in the factory as
junk or waste material.
The plaintiffs averred further that they have
suffered financial loss as a result of the breach of contract in the sum of
N884,934,268.56 and that this has negatively affected their business operation
since 2014 till date. They contended that they are entitled to claim damages
for breach of contract against the bank who had by its various acts of breaches
of the various letters of offer for facility caused great loss to their
business.
Consequently the plaintiffs claim against FCMB
jointly and severally:
1. General damages in the sum of N5billion.
2. A declaration that the plaintiffs are not
indebted to the bank in any sum premised on the fact that they have settled all
their indebtedness on the facilities granted to them by the bank.
3. A declaration that the bank breached the
terms of letter of credit and is liable for the loss of the letters of offer on
importation in the sum of $1,999,865.
4. A declaration that the bank is liable to
refund to the plaintiffs N884,934,298.56,being the losses incurred on the
damaged consignment purchased through letters of credits, and failure and
refusal of the bank to obtain an all risk insurance policy for the shipment of
the said consignment.
5. An order for the payment of N826,996,135.00
being the total sum wrongly debited on the plaintiffs’ account by the bank.
6. An order of the court restraining FCMB from
appointing and or registering any instrument of appointment of an official
receiver or any instrument whatsoever made for the purpose of enforcing the
security for the payment of alleged indebtedness in the sum of N1,129,884,104.72
being allegedly claimed against the plaintiffs by the bank .
7. Cost of litigation assessed at N250million.
- Media Report