Daily Independent (Lagos)
Dolapo Tunde-Muraina
9 July 2009
Lagos — A Lagos high court has ordered Spring Bank Plc to pay the sum of N10 million as damages to Dokkin Ventures Limited for negligence and refusal to meet the company's demand.
After 10 years of legal tussle, Justice Ayotunde Philips in her judgment on Wednesday also ordered the bank to return $871.595.04 to Dokkin Venture being foreign exchange which the claimant paid the naira valued to the bank.
In the 20-page judgment, Justice Philips ordered Spring Bank to pay 21 percent interest per annum of the money from 1993 until the entire judgment debt is liquidated.
According to her, she was convinced by all the facts before the court that the claimant has shown that the defendant (Spring Bank) was negligent in the handling of its bank account.
The court held that the failure of the bank to produce a current statement of account when one was demanded from it was unforgivable adding that the claimant should be compensated for the shoddy and unprofessional way in which the defendant handled its funds.
"I am of the view that since the claimant has been deprived of the use of its funds since December 1993, it is entitled to interest on the said sum. This claim is therefore granted. I accordingly hold that the action of the defendant in doing so was not only negligent but extremely fraudulent," the court held.
Justice Philips further held that the claimant has discharged the burden of proving fraud against the defendant saying "there is no iota of doubt in my mind that the defendant has not acted in good faith as it should in respect of these funds.
The suit commenced initially before Justice Hunponu Wusu and was reassigned to the court of the Chief Judge, Justice Ade Alabi before it was later assigned to Justice Ayotunde Philips for adjudication.
The original defendant in this action was Citizen International Bank which was after amalgamation of banks became known as Spring Bank Plc.
From the pleadings both oral and documentary evidence before the court, the facts of the matter are that the claimant deposited a sum of N102, 640, 931. 25 with Citizen Bank Limited and both parties agreed that the bank will place the sum of N10 million on strict call deposit at a rate of 40 percent per annum.
In addition N2, 640, 931.25 was also agreed to be placed on strict call at 35 percent per annum and hold N90 million in cash collateral account to fund the claimant's weekly foreign exchange bidding.
Pursuant to the agreement the claimant opened a Letter of Credit which it eventually cancelled and then requested the defendant in writing to return the foreign exchange into its dollar account as they had no further use of the said currency.
However, the defendant failed to convince the claimant that it had either remitted these unutilized funds to the Foreign Exchange Department of the CBN in compliance with the CBN guidelines.
However, in its defence, the defendant alleged that it did repurchase the said funds and that it credited the claimant's cash collateral with same.
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