Access Bank in Court over refusal to make refund for failed contract

Another section of the new road infrastructure linking the ever busy Victoria Island-Lekki Epe Expressway; all delivered by Access Bank in partnership with the Lagos State Government. Photo: Business Hilights.

An indigenous group, Satek Nigeria Limited, has dragged Access Bank Plc before a Lagos High Court over the bank’s alleged refusal to refund a contract sum after the said contract failed.

Joined as Second Defendant in the suit marked LD/ADR/4527/22, is Technova Industries Limited.

Satek Nigeria Limited and its Chief Executive Officer (CEO), Mr Samson Babajide, in their proposed amended Statement of Claim against Access Bank Plc, filed by their lawyer, Adekunle Adegbite, states as follows: “that following a contractual agreement with the Second Defendant approached the First Defendant (Access Bank) for payment guarantee as security to complete the contract which was to import deep chillers and the First Defendant asked that the Claimants deposit the sum of Fourteen Million, Three Hundred Thousand Naira (N14,300,000.00) which was done by the Claimants on the 13th day of July 2017 in security deposit account number: 0736044512 of the First Defendant’s vault. The Claimants later made a demand on the said deposit by letter dated 10th June 2021.

“That the First Defendant, prior to the deposit of the said money by the Claimants, had confirmed via a letter dated 8th day of December 2016 to the Second Defendant that the payment guarantee shall become void after one hundred and fifty (150) days if not utilised.

“That the First Defendant, by letter dated 14th December 2016, also confirmed to the Second Defendant that the payment guarantee was issued to it at the instance and on behalf of the Claimants. And that there arose a dispute with the Second Defendant as the condition precedent for being paid the payment guarantee was not fulfilled by the Second Defendant leading to the Claimants suing both Defendants at the High Court of Lagos when the First Defendant wanted to release the money on the payment guarantee to the Second Defendant.

“That though it sued both Defendants, the case was struck out on technical grounds by the court on the 17th day of December 2017 on the ground that the pre-action form was not served on the Defendants, leading to the Claimants to eventually conceding that the matter be struck out.

“That they tried unsuccessfully to get some of its Deep freeze chillers worth over Thirty Million Naira (N30, 000, 000. 00) placed in the custody of the second defendant as the said company had ceased operation in Nigeria.

“The said guarantee was procured by the First Claimant on the condition that the Second Defendant will remit the sum of £44,270.52 BPS to the foreign sellers of 80TR Air coolers, which the Second Defendant failed and neglected to do and is no longer carrying on business in Nigeria.

“That the First Defendant (Access Bank) has refused to release the money the Claimants deposited with the First Defendant despite repeated requests for same as shown in its letters dated 5 May 2017, 4th March 2020, 12th April 2021, 19th July 2022.

“The First Defendant (Access Bank) claims the deposited sum cannot be returned to the Claimants unless there is a valid court order to that effect and their obligation to the Second Defendant is discharged since there is no way a letter of performance can be obtained from the Second Defendant as it did not fulfill the condition precedent for the payment guarantee……..”

Based on the above averments, the Claimants, Satek Nigeria Limited and its Chief Executive Officer (CEO), Babajide, consequently asked the court for the following: “A declaration that since the second defendant had failed to perform its obligation to the Claimants for which the payment of the guaranteed was set up, the First Defendant is discharged from its obligation to make payment guaranteed deposit to the Second Defendant.

“The sum of Fourteen Million, Three Hundred Thousand Naira (N14, 300, 000.00) being sum deposited to Access Bank Plc as at 13th day of July 2017, in security deposit account number 0736044512 as payment Guarantee for Technova Industries Limited which company no longer subsist and for which purpose the payment guarantee has lapsed and was never utilised and the same of which Access Bank Plc has refused to release back to the claimants despite repeated demands.

“Interest on the said sum of Fourteen Million, Three Hundred Thousand Naira (N14, 300, 000.00) at the rate of 18 percent per annum from July 2017 until judgment is given and thereafter, interest at the rate of 10 percent per annum from the date of judgment until the judgment sum is finally liquidated.

“Cost of action reasonably assessed at One Million, Seven Hundred and Fifty Thousand Naira (N1, 750, 000.00).”

But Access Bank, in its amended Statement Of Defence, filed by its lawyer, Mudashiru Aihari, urged the court to dismiss the Claimants’ suit with substantial cost for being frivolous, abuse of judicial process and gold-digging.

Parts of Access Bank Plc’s defence reads: “that contrary to the averments contained in paragraph 4 of the Statement of Claim, wherein the Claimants relied on a contractual agreement entered into by the Forst claimant with Technovaa Industries Limited, the First Claimant failed woefully to exhibit the contractual agreement for easy understanding of what was agreed to by the First Claimant and Technovaa Industries Limited.

“Defendant admits that there exists a Payment Guarantee of 8th December 2016 issued by Defendant on behalf of the First Claimant in favour of Technovaa Industries Limited in the sum of N14. 300 million, and this Payment Guarantee was at the request of the First Claimant vide their letter of 8th November 2016.

“That the Defendant, on the 17th of November, 2016, issued to the First Claimant an Offer Letter for a Bank Guarantee Facility in the sum of N14. 300 million, for a tenor of 6 (six) months with Technovaa Industries Limited as the beneficiary and the terms and conditions contained in the offer letter were accepted by the 1st Claimant on the 17th of November, 2016.

“That in the Payment Guarantee of 8th December 2016, it was stated that the 1st Claimant entered into an agreement with Technovaa Industries Limited for the supply of 80TR Carrier Air Cooled Scroll Chiller and that Technovaa Industries Limited made an initial payment of N14. 432 million, to the first claimant for the supply of the goods and the First Claimant was unable to effect supply and the First Claimant has agreed and undertaken to repay the sum of N14,300 million, to Technovaa Industries Limited within 150 (One Hundred and Fifty) days from the issuance date of a valid Guarantee and this necessitated the defendant to issue the said Guarantee.

“That the Payment Guarantee issued by the Defendant on the 8th of December 2016 was valid for 180 (One Hundred and Eighty) days from the date of issuance and for the sum of N14,300 million, and the Guarantee was solely in favour of Technovaa Industries Limited and same became null and void at the expiration of the tenor whether or not it was returned to the defendant for cancellation.

“That sometime in April 2017, Technovaa Industries Limited complained to the First Defendant of the failure of the First Claimant to make requisite payment as contemplated under the Payment Guarantee and the defendant contacted the First Claimant about this development, the First Claimant by their letter of 25th April 2017 stated that the main condition under the contract for demand or call for the Payment Guarantee was yet to be satisfied by Technovaa Industries Limited.

“That after the expiration of the period of 150 days contemplated under the Payment Guarantee for the First Claimant to make payment to Technovaa Industries Limited, which they failed to do, on or about the 2nd May 2017, Technovaa Industries Limited wrote a letter of demand under the Payment Guarantee to the Defendant and the Defendant informed the First Claimant of Technovaa Industries Limited’s demand letter for payment under the Guarantee to which the First Claimant caused its solicitors to respond vide letter of 5th May 2017 to which the Defendant responded, reminding the First Claimant of the Defendant’s obligations under the Payment Guarantee as well as the fact that the First Claimant had earlier represented to the Defendant that the First Claimant had received the sum of Fourteen Million, Four Hundred and Thirty-Two Thousand Naira (N14, 432, 000.00) only from Technovaa Industries Limited.

“Contrary to the aveerments contained in paragraph 8 of the Statement of Claim, that while the action in Suit No. ID/3937GCMW/2017 between Satek Nigeria Limited Vs Technovaa Industries Limited and Access Bank Plc was struck out on 17th December 2018, by Justice B. A. Oke-Lawal (Mrs.), the First Claimant filed a Notice of Appeal of 16th July 2019 and the said appeal is still pending at the Court of Appeal in Appeal No. CA/L/763/2020.

“That contrary to the averments contained in paragraph 10 of the Statement of Claim, the Payment Bank Guarantee issued by the Defendant to Technovaa Industries Limited for and on behalf of the First Claimant has nothing to do with Technovaa Industries Limited to remit the sum of Forty-Four Thousand, Two Hundred and Seventy Pounds Sterling, Fifty-Two Pence (of £44,270.52) to any foreign sellers of 80TR Air Coolers but it was strictly to cover the initial payment of Fourteen Million, Four Hundred and Thirty-Two Thousand Naira (N14, 432, 000.00) only) by Technovaa Industries Limited to the First Claimant and which payment the First Claimant acknowledged.

“That contrary to the averments contained in paragraphs 11, 12, 13, 14 and 15 of the Statement of Claim, the Fourteen Million, Three Hundred Thousand Naira (N14, 300,000.00) only in the custody of the Defendant does not belong to the First Claimant but Technovaa Industries Limited and the Defendant had rightly stated in their letter of 23rd March 2020 that the money would be released to Technovaa Industries Limited moment they demand for same again.

“That the action in the suit herein was instituted on or about the 6th September 2022, whereas an action in suit No. ID/3937GCMW/2017, between Satek Nigeria Limited Vs. Technovaa Industries Limited and Access Bank Plc were filed on the 2nd June 2017, and the action in suit no. ID/3937GCMW/2017, between Satek Nigeria Limited Vs. Technovaa Industries Limited and Access Bank Plc were struck out on the 17th of December 2018, while a notice of appeal in Appeal no. CA/L/763/2020, between Satek Nigeria Limited Vs. Technovaa Industries Limited & other. The said notice of Appeal was struck out on the 16 January 2024.”

Meanwhile, Justice Kudirat A. Jose has fixed 7 October 2024 for a report of service on the Second Defendant, Technovaa Industries Limited.