A Swiss Company, FOODIN SA headquartered in Geneva Switzerland has filed a winding-up petition against a Nigerian company, Advanced International Merchants Limited (AIML) at Okoya Estate, 6 Fathai Doherty Close, Adeniyi Jones, Ikeja, Lagos.
FOODIN SA (the petitioner) is praying the court wind up AIML (the respondent) for being insolvent and unable to pay its debt to the petitioner, it is therefore just and equitable that the company should be wound up so its assets can be used to satisfy its creditors including the petitioner.
The nature of the business relationship between FOODIN SA and AIML dates back to 2010 and is such that FOODIN SA sends special food products, flavors, ingredients, and formulation products to AIML in Nigeria on credit. The respondent in turn sells those products to the target market in Nigeria.
Upon the sale of the products, the respondent is expected to remit an agreed sum and retain its earned commission from the marketing and sales of the products.
The rancor between the two business entities surfaced in 2015 when the respondent began to withhold remittances due to the petitioner and for no justifiable reason. In some instances, partial remittances would be made on the invoices, and in some instances, no remittances at all even though the purchasers have fully paid for the products.
Since 2015/2016, the petitioner had pending final invoices awaiting the respondent’s settlement.
Arising from withheld remittances referred to in documents made available to Chronicle NG, the respondent is date indebted to the petitioner as follows:
(a) The sum of USD 367 032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents;
(b)The sum of GBP 214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty-Six Pound), and
(c)The sum of 317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy Six Euros, Eighty Six cents.
FOODIN SA issued several demand emails, letters, and follow-ups and paid repeated visits to the respondent’s offices to get AIML to honour the outstanding final invoices but all to no avail as demand letters addressed and delivered to the office of the respondent’s Managing Director could still not elicit the desired response or traction, as the final invoices were not paid.
Upon FOODIN SA’s further follow-up, AIML vides an undated letter received in January 2022 admitted its indebtedness to the petitioner whilst attributing its cash flow and liquidity challenges to an alleged liquidity and economic crisis of 2015/2016 and some struggles with its bank and other suppliers.
FOODIN SA has performed all of its obligations under the existing business relationships but AIML has woefully failed to discharge its obligation by its refusal to honour invoices forwarded to it by FOODIN SA.
Following the refusal of the AIML to make payments under the various invoices issued by it FOODIN SA mandated and authorized its solicitors, to recover its debt from the respondent.
By a letter dated January 11, 2022, the solicitors to FOODIN SA, issued a demand to AIML to liquidate its lingering indebtedness to the petitioner within 14 days as follows:
(a)The sum of $367 032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents;
(b) The sum of £214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty-Six Pound); and
(c) The sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy-Six Euros, Eighty-Six cents
Rather than liquidate the debt, the respondent caused its Solicitors, to write the petitioner’s counsel admitting the $367,032.95 and £214,626.00 debts but rather than pay requested for understanding from the petitioner and also indicating that it is working on a repayment schedule.
By a letter dated 16th January 2022, the petitioner’s counsel replied the respondent’s letter of 15th January 2022 requesting the respondent to make payment of the admitted debt of $367 032.95 (Three Hundred and Sixty – Seven Thousand, Thirty – Two Dollars, Ninety-Five cents) and the sum of £214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound) within seven days, and also urged the respondent to supply verifiable details of how much it believes it is owing the petitioner in connection with the sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy-Six Euros, Eighty Six cents which the respondent had alleged was higher than its actual euro debt.
Upon the petitioner’s expiration of the 14 days notice given to the respondent by the repeated failure of the respondent to honour its commitments, as a result of which the business of the petitioner has suffered due to the withheld funds over the years, the petitioner, in compliance with the provisions of sections 517(d) and 572 (a) of the companies and Allied with Matters Act, 2020 issued a statutory demand notice on the respondent on February 8, 2022, requesting the respondent to pay the debt within three weeks from the date of receipt or face the consequence of winding up proceedings.
By a letter dated 2nd February 2022, after receipt of the winding up notice AIML through its counsel cheekily informed FOODIN SA that it has commissioned a firm of chartered accountants to study all the books of accounts touching on the respondent’s business with the petitioner which will take six weeks after which a repayment plan and schedule for the admitted debt would be presented as well.
By another letter dated 22 February 2022, the petitioner’s counsel, in response to the respondent’s letter of 2nd February 2022, drew the attention of the respondent’s counsel to the fact that the insinuation by the respondent that the sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents) does not represent what it believes it is owing the petitioner is speculative as the respondent had failed to state the amount of its alleged commission which it claimed were not deducted from the affected transactions leading up to the amount claimed.
Further, the allusion to the economic challenges in the country is an afterthought being that the debt in question was from 2015/2016.
Rather than pay its debt, AIML, by another letter dated 2nd March 2022 addressed to FOODIN’s solicitors expressed its willingness to settle any undisputed invoices of the petitioner but did not indicate any particular timeline for the payment.
By a letter dated 7 March 2022, the petitioner’s counsel replied to the respondent’s counsel and expressed grave concern over its client’s cheeky attempt to use a procured audit exercise in 2022 as an excuse not to pay its debts of 2015/2016 especially the fact that it has admitted the dollar and the Pound Sterling components of the debt which ought to have been
paid as a mark of good faith.
By a letter dated 29th March 2022 which was sent via email on 31 March 2022, the respondent’s Counsel sent a letter to the petitioner’s counsel informing him of the outcome of the unilateral reconciliation and audit exercise done on the books of the respondent about the debt owed to the petitioner.
The respondent through its Solicitors further admitted the debt of the sum of $367 032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents) and the sum of £214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound) as it had done previously on 15th January 2022.
Furthermore, about the outstanding debt in euro, the respondent admitted the sum of € 195. 320. 40 (One Hundred and Ninety – Five Thousand, Three Hundred and Twenty Euros, Forty cents) out of the debt of € 317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents) alleging that its commissions were not deducted from the said sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy SSeventy-Sixighty Six cents.
The respondent further indicated that the petitioner is at liberty to request to see the ‘documentary evidence’ of the unilateral reconciliation done by the respondent forming the basis of the respondent’s reduction of the debt from €317, 276.80 to only €195,320.40.
By a letter dated 5th April 2022, the petitioner’s counsel in response to the respondent’s counsel letter of 29th March 2022, requested that copies of the documentary evidence of their reconciliation and audit exercise be sent to the petitioner’s counsel by 5th April 2022 for their review and comments along with a repayment plan of how the Respondent proposes to liquidate the admitted debts in USD, GBP, and the undisputed part of the euro debts as a show of good faith.
The respondent failed to respond to the said letter of 5th April 2022 and also failed to send the documentary evidence of the reconciliation and audit exercise it unilaterally and purportedly did on the debts it owes the petitioner. It also failed to send in a repayment plan for the admitted debts as requested and also refused to make any form of payment.
By a letter dated 25th April 2022, the petitioner’s counsel send a reminder to the respondent’s counsel expressing their displeasure over the respondent’s failure to respond to the petitioner’s letter of 5th April 2022 as well as send the documentary evidence of the reconciliation exercise it unilaterally did on the debt it is owing the petitioner and a repayment plan for the admitted debts. It further informed the respondent’s counsel that the petitioner would be forced to proceed to seek redress in court by the end of April 2022 should the respondent continue its recalcitrant attitude towards the matter.
Upon the receipt of the petitioner’s counsel letter of 25th April 2022, the respondent’s counsel sent a letter dated 29th April 2022 with an attachment titled “Summary of AIML’s position with FOODIN as of 3rd December 2021” in an attempt to justify its stance that only the sum of €195, 320.40 was due from the respondent to the petitioner on the euro portion of the debt instead of the sum of €317, 276.86 claimed by the petitioner.
The said “Summary Report” attached to the letter of 29th April 2022 is undated. It is not authenticated by any identifiable person let alone by the “Chartered Accountant” and with no factual details or narration that led to the conclusion arrived as to lower the euro sum it is owing the petitioner.
The petitioner’s counsel, by a letter dated 16th May 2022 informed the respondent’s counsel that a review of the letter by the petitioner showed that the terse and unauthentic report is misleading, and incorrect as it lacks empirical and credible basis on how the conclusive figures were arrived at. To put the matter in proper perspective and further demonstrate transparency, the Petitioner attached its comprehensive reconciliation report of all euro transactions between it and the respondent covering the years 2013 December 2021 capturing inter alia the total amount of invoices unpaid by AIML, the total amount of Commission and Credit Note unpaid by FOODIN to AIML as well as the reconciled total amount of Euro 317, 276.86 due and payable by AIML to FOODIN to put to the rest the respondent’s baseless contention.
The respondent was given another seven days grace period to liquidate the entire outstanding debt comprising the admitted debt of $367,032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents) the sum of £214 626.00 (Two Hundred and Fourteen
Thousand, Six Hundred and Twenty-Six Pound) and the sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy Six Euros, Eighty Six cents).
Over fifteen weeks have lapsed since the petitioner issued and served the
Statutory Demand Notice on the respondent on 8th February 2022 but the respondent has failed, refused, defaulted, and/or neglected to pay or satisfy the said debts.
At this point, it is clear to FOODIN that AIML is insolvent and/or unable to pay its debts to the petitioner.
Despite repeated calls and demand the respondent has serially failed, refused, and is unable to liquidate its outstanding debt to date. The petitioner has suffered enormous business damage, particularly with its funds withheld by the respondent for about 6 years now which the respondent has instead selfishly used for its own business thereby depriving the petitioner of its legitimate use of the funds for its business over the years. The debts being of a commercial nature attracts interest at the applicable commercial rate of 21% per annum from 2016 till date.
The petitioner expressed shock at the level of contractual breaches with impunity, insensitivity, and bad faith characterizing the respondent’s business conduct, predatory nature, and attitude with no regard for the sanctity of contracts which is a measure of bad faith and lack of conscience.
By obtaining products from the petitioner and for over 5 years failing and being unable to pay the debts, and instead giving all manner of excuses including illiquidity, the respondent is insolvent and ought to be wound up under the law to realize its assets and liquidate its debt to the respondent and other unsuspecting creditors in the interest of justice.
By all indications, the respondent is insolvent and/or unable to pay its debt.
The commercial interest rate in Nigeria for borrowing hovers about 21% presently in the banking industry which represents the losses suffered by the petitioner over the withheld funds.
AIML is insolvent and unable to pay its debt to FOODIN, and it is therefore just and equitable that it be wound up to realize its asset to satisfy its creditors including the petitioner.
The petitioner therefore humbly prays as follows:
- That the respondent, Advanced International Merchants Limited, be wound up by the court under the provisions of the Companies and Allied Matters Act, 2020.
Alternatively, an order entering judgment in the aforesaid sums of:
- $367 032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents).
- £214,626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty-Six Pound); and
- €317,276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy Six Euros, Eighty Six cents;
(d) Interest in the above sums at the rate of 21% per annum from 30th June 2016 to the date of judgment and final liquidation of the entire judgment debts, and the entire judgment debts be fully paid within 14 days from the date of judgment.
And for such other or further order (s) as the Honourable Court may deem fit to make in the circumstances of this case.
Meanwhile, based on an application filed before the court, the presiding Judge Daniel Osiagor granted an order to FOODIN to advertise its petition for winding up against AIML in two national daily newspapers. Thereafter the case was adjourned to the 3rd of October,2023 for a hearing.
