Breach Of Contract: Company Slams N2B Suit On Stanbic IBTC Bank

* Logo source: Hotnaijanews.com

 

 A limited liability company, Infinity Snacks and Beverages Limited, which claimed to have suffered economic losses as a result of breach of contract by Stanbic IBTC Bank Plc has slammed N2 billion suit on the bank.

In a statement of claim filed at the Lagos High Court, by a Lagos based lawyer, Barrister Olumide Sofowora (SAN) Infinity Snacks and Beverages Limited alleged that in July 2014, it applied to Bank of Industry for a loan for the expansion of its factory and got approval for the sum of N934, 029,835 on August 19, 2014.

The claimant added that one of the conditions stated by Bank of Industry for granting the facility was the provision of a bank guarantee and that it then requested Stanbic IBTC bank to start processing the bank guarantee.

The claimant added that apart from the unnecessary delay exhibited by IBTC bank, the bank requested that before the bank guarantee can be provided the company should pay one of its existing loans to the bank which stands at N50 million, while all other outstanding loans and interest due to the bank should be noted on debenture.

The plaintiff said it satisfied all the requirements, yet the bank guarantee was not issued until 22nd of December 2015, about four months, after the approval of the loan by the Bank of Industry.

“Despite the delay in providing the bank guarantee, the Bank of Industry disbursed the sum of N864, 420,000 into the claimant bank account in IBTC on 9th of May, 2016, but the bank did not inform the company until 17th of May 2016.”

The company then immediately embarked on ensuring that the loan was utilized as it mandated the Stanbic IBTC to bid for foreign exchange for the purchase of the needed machinery for its expansion.

” Initially, Stanbic IBTC continued to put stumbling blocks on the way by tying the Bank of Industry loan to its own loan portfolio granted to the company, later when it agreed to bid for the needed foreign exchange, the bank said there was no foreign exchange supply in the market, only for the company to discover that the bank’s promises to secure foreign exchange for the company were all ploys to frustrate the company from benefiting from the Bank of Industry facility of N864.420million because apart from bidding for and obtaining foreign exchange for some of its customers who applied for foreign exchange during the same period as the company did, the bank was in fact supporting one of the company, ‘s competitors Multipro Enterprises Limited who is the Franchisees of Kellogs Breakfast Cereals in Nigeria and it turned out that the bank actually applied for the same Bank of Industry facility as the one granted to the company on behalf of that company. ”

The plaintiff averred that the delay on the part of the bank to provide the bank guarantee caused the company severe loss as the rate of foreign exchange to the Nigerian currency rose drastically during the period due to Federal Government deregulation of foreign exchange market, aside that the bank unilaterally increase the bid rate from N 280 to $1 to N 288 to $1.

Consequently, the company said StanbicIBTC bank has breached its duty of care to it and committed several other breaches due to negligence by its refusal to carry out the company, ‘s several instructions and by its decision to place a lien on the company ‘s funds which amounts to an unauthorized freezing of the company’s account without lawful authorization and trading with N 864.420million meant for the expansion of the company’s business for several months without payment of any interest whatsoever.

The claimants said it held meetings with the bank with a view to placing the N864.420millon in an interest yielding account, the bank promise to revert to the company on the issue, but it never did and kept silent on the matter permanently.

The company also contended that, by promoting the business of the company’s competitor whilst frustrating the company business, the bank has breach its fiduciary duty to it since in a Banker/Customer relationship the banker is regarded as agent of the customer.

In view of the alleged several breaches of the bank in its duty care to the company, the company is demanding for special damages in the sum of N2, 076,801,430.

The claimant is also urging the court to declare that by promoting the business of the company’s competitor whilst frustrating its own business which led the company to sustain loses in its business, the bank has breached its fiduciary duty to the company thereby entitling it to damages.

However, the defendant is yet to file any defence to the suit, while the presiding judge A. M. Lawal has adjourned the suit till 5th of June for mention.

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