A limited liability company, Infinity Snacks and Beverages Limited, alleged to have suffered economic misfortune as a result of breach of contract by Stanbic IBTC bank Plc has slammed N2billion suit on the bank.
In a statement of claim filed before a Lagos high court, Southwest Nigeria by a Lagos lawyer, Barrister Olumide Sofowora SAN, Infinity Snacks and Beverages Limited alleged that in July 2014, it applied for a loan for its factory expansion from the Bank of Industry (BOI) and it received approval for the sum of N934,029,835.on 19 August 2014.
However one of the conditions for granting of the facility was the provision of a bank guarantee which the company requested Stanbic IBTC bank to start processing.
However apart from the unnecessary delay exhibited by the bank, the bank requested that before the bank guarantee can be provided the company should clear one of its existing loans to the tune of N50 million, while all other outstanding loans and interest due to the bank should be noted on debenture.
The company satisfied all these requirements but yet the bank guarantee was not issued until 22 December 2015, about four months, after the approval of the loan by Bank of Industry.
Thereafter, Bank of Industry disbursed the sum of N864,420,000 into the company’s bank account with Stanbic IBTC on 9 May, 2016.
But the bank did not inform the company until 17th of May 2016 about two weeks after the money was paid.
The company then immediately embarked upon ensuring that the loan was utilized, it then mandated the bank to bid for foreign exchange for the purchase of the needed machinery for its expansion, initially the bank continued to put stumbling blocks along the way by tying the Bank of Industry loan to its own loan portfolio granted to the company.
Later when the bank 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 infact supporting one of the company’s competitors Multipro Enterprises Limited who are the Franchisees of Kellogs Breakfast Cereals in Nigeria.
It turned out that the bank actually applied for the same Bank of Industry facility as the one granted to Infinity Snacks and Beverages Limited on behalf of Multipro Enterprises Limited.
The company is contending 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 increased the bid rate from N280 to $1 to N288 to $1.
The company also alleged that Stanbic IBTC bank breached its duty of care to its customer and committed several other breaches of contact due to negligence by its refusal to carry out the company’s instructions and by its decision to place a lien on the company’s funds which amounted 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 company held meeting with the bank with a view to placing the N864.420millon in an interest yielding account.
The bank promised 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 breached its fiduciary duty to it since in a Banker/Customer relationship the banker is regarded as agent of the customer.
Consequently, in view of the alleged several breaches by the bank in its duty care to the company the company is demanding for special damages in the sum of N2,076,801,430.42.
Infinity Snacks and Beverages Limited 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.
The defendant (Stanbic IBTC) has not file any defence.
Meanwhile the presiding judge A. M. Lawal has adjourned the suit till 5th of June for mention.
