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Zenith bank wins N20billion lawsuit against it by customers in Abuja high court


 * As Plaintiff vows to file appeal against Judgement



By Dennis Chuks

ABUJA- High Court in the federal capital territory, Abuja on Thursday, July 5, 2018, gave judgement in a N20 billion lawsuit slammed against Zenith Bank Plc by one of its customers, Owigs and Obigs Nigeria Limited, over an alleged breach of contract, infringement of bank/customer relationship, incompetence, negligence and gross professional misconduct that caused the plaintiff over $64million in loss of three major transactions with a Chinese firm for the supply of solid minerals.

The Plaintiff had prayed the court to award additional N2billion as exemplary damages for the bank’s tort of negligence, which cost the plaintiff its goodwill and further contract opportunities in China, in addition to the sum of N1billion for aggravated damages.

In delivering her judgement on the matter, which first came up on December 7, 2016, Justice Angela O. Otaluka absolved Zenith bank of any wrong doing in the entire transaction, but rather blamed Singapore Brokers, Eglone Group Asia PTE and Industrial and Commercial Bank of China (ICBC) for their inability to handle the issue of letter of credit, resulting in the eventual termination of the contract.

According to Justice Angela Otaluka, the Defendant, acted within the provisions of the terms and conditions governing the contract. She consequently awarded the sum of N100.000 to the Plaintiff as fine.

Zenith Chairman/CEO Mr. Jim Ovia

Reacting to the judgement, Barrister Jude Nwachukwu, counsel to the plaintiff who expressed shock at the judgement, described the ruling against his client as unbelievable, just as he vowed to file an appeal against the judgement at the Court of Appeal. He noted that with the available documentary evidence before the court, he was sure of victory at a superior court.

It was learnt that Zenith Bank had earlier made several attempts to go into out of court settlements with the Plaintiff, after tendering an apology, but did not follow through on its promises to indemnify the Plaintiff against all the incurred losses, which may have compelled Owigs and Obigs Nigeria Limited to seek redress in the court of law in 2016.

Counsel to the Plaintiff, Jude Nwachukwu, had alleged that Zenith Bank Plc, because of its unprofessional handling of its (plaintiff’s) business, caused Owigs and Obigs Nigeria Ltd to lose the contracts in 2014 with Chinese company, King-Tan Tantalum Industry (KTTA) for the supply of solid minerals due to an unauthorized withdrawal of $4, 486.04 from the Plaintiff’s Domiciliary Account thereby causing an immediate termination of the contract that should have triggered a second phase, spanning over a period of three years with a value of $240m, only if the first phase was successfully completed.

Zenith Bank corporate office Abuja

The Plaintiff, lamented how Zenith Bank Plc, on receiving the Letter of Credit from the Industrial and Commercial Bank of China, deliberately failed to advise the Plaintiff accordingly as required, in confirming the Letter of Credit (LC) within maximum period of three to five days of receipt of the letter of credit or reject same immediately if they were not issued according to her (the defendant’s) approval. It rather withheld the letter of credit (LC) and started demanding for cash cover which was a delay tactics designed to frustrate the transaction while the validity period was fading away until it died completely.

Counsel to Plaintiff further alleged that the defendant had used what he described as “inexplicable malpractices, involving willful negligence, lies and deceits, including breach of letters of credit and performance bond, which resulted in the eventual unwarranted termination of the contract”

CNB Governor Godwin Emefiele

Owigs and Obigs Nigeria Ltd had in the writs of summon deposed that the deliberate unauthorized removal of funds from its account by Zenith Bank Plc caused the termination of the execution of a duly secured foreign contract, valued at $64, after it had already committed for export $10 million worth of material goods as a part fulfillment of the contract terms.

The company averred that all attempts it made to get clarification from Zenith Bank as to why the contract was terminated and funds illegally withdrawn from her accounts were rebuffed by the bank.

On July 30, 2014, the Industrial and Commercial Bank of China (ICBC) officially authenticated a litigation threat message against the defendant, Zenith Bank Plc via a swift message transmitted to the defendant, threatening Zenith bank Plc with a suit at the International Court of Arbitration, with a further threat to petition the federal government of Nigeria through its Embassy in China and also petition the Central Bank of Nigeria (CBN).

The earlier threat by the world’s biggest bank to drag Zenith bank Plc to international court of Arbitration followed her loss of confidence in Zenith bank Plc.

In his submission, the Plaintiff had alleged in a shocking revelation in her final written address that, “prior to this moment that there were unresolved issues arising from three-fold demands made by the defendant in respect of the established net earnings of $38.4million to have 34% fair share from the net profit as the defendant’s entitlement and the compensation for fully participating in the contract drafting”.

According to the Plaintiff, the defendants further demanded, “for partnership with the Plaintiff through their proxy company in the second phase of the contract valued for $240 million, tenured for 42 months, after successful completion of the underlying contract” to which the Plaintiff declined.

The Plaintiff’s refusal to the bank’s demands for inclusion in the sharing of the net profit of the $64million contract, led to the defendant’s alleged fraudulent activities evident in the termination of the contract. Consequently, Zenith bank’s appointment as the advising bank was terminated by the Plaintiff and the bank replaced with Stanbic IBTC Bank, pending the consummation of the already issued letter of credit.

Counsel to the Plaintiff regretted that “ it was so disheartening that the defendant for no just cause as at 22 May 2014, having earlier issued the said Performance Bond (PB) copy that was meant for the Industrial and Commercial Bank of China (ICBC) in favour of the importer to the Plaintiff, yet refused to swift same, knowing so well that it was the duty of the Plaintiff to swift the Performance Bond (PB) as she is not a bank to do so, even after deducting funds from the Plaintiff’s account as charges for the said Performance Bond (PB) swift.”

Lamenting the high level of fraudulent activities in Nigerian banks, as exemplified by Zenith bank Plc, a Singapore international trade broker, Eglone Group Asia PTE, involved in the transaction, regretted, “I don’t think I can pass this information to the buyer, because it will complicate issues and further rubbish the image of Nigerian and African banks in the eyes of international community”.

Frowning still at the whole Zenith Bank’s scheme to shortchange the plaintiff, Eglore Group Asia PTE bellowed, “How could a bank release an official copy (not draft) of Performance Bond, dated 16th May, 2014, which has not been yet been transmitted out by swift. I must tell you that I am so disappointed at the way your bank (Zenith bank Plc) is handling this case.

“Nigerian bankers could kill your business, if you relax on them. They just sit around do nothing to your case unless you push them”, Eglone Group Asia PTE, reacts.

Counsel to Plaintiff, Barrister Jude Nwachukwu, noted with dismay that “the harvest of unprofessional conduct by defendant resulted in a total loss of confidence and trust on Zenith bank by the Industrial and Commercial Bank of China”, adding that “being confronted with litigation threat by Industrial and Commercial Bank of China (ICBC), on what action they will take against Zenith Bank for gross professional misconduct over the Performance Bond issuance and the subsequent recall violations, but Zenith bank Plc, rather resorted to trade off the Performance Bond fraudulently against the Plaintiff  in an attempt  to escape the wrath of the world’s number one giant bank (ICBC).

Zenith bank Plc, for want of evidence had admitted in the defendant’s witness statement on oath and in her admissions under cross examination in their final written address that ICBC was rather in breach, which was false and self-implicating as averred by the plaintiff’s counsel.

CJN, Justice Walter Samuel Onoghen

It would be recalled that President Muhammadu Buhari on assumption of office embarked on large-scale reforms in the banking sector to conform with global best practices and in line with the economic policies of his administration in order to ease business in Nigeria.

In her response, Counsel to the defendant, represented by Barr. Olayinka Adedeji, thanked the Judge for giving her client fair judgement.




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