Appeal Court Upholds N2.5b Judgment Against Skye Bank | Independent Newspapers Limited
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Appeal Court Upholds N2.5b Judgment Against Skye Bank

Posted: May 13, 2015 at 2:50 am   /   by   /   comments (0)


By Tunde Opeseitan



The Court of Appeal sitting in Akure on Tuesday upheld the judgment of an Osun State High Court which awarded N2.5 billion damages against Skye Bank Nigeria Plc for breach of contract against a customer of the bank, Tuns Farm Nigeria Plc.

Tuns Farm, which is owned by the Asiwaju Musulimi of Yorubaland, Alhaji Tunde Badmus, has been having running battle with Skye Bank over breach of contract on a loan facility.

However, the Appeal Court, in a unanimous judgment delivered by Justice Denton West, allowed the appeal and upheld the lower court judgment which was delivered in March 2014 by Justice Oyejide Falola.

The three member panel of justices of the appellate court, while dismissing the appeal filed by Skye Bank, held that the lower court had the right to award both special and general damages to the appellant (Tuns Farm) for breach of contract.

Justice Falola of the High Court, had specifically ruled that Skye Bank erred in law by the non-fulfillment of contractual agreement entered into on a loan facility of N2 billion with Tuns Farm.

Justice Falola had also ruled that the bank exhibited poor corporate governance and poor diligence in handling the Central Bank of Nigeria (CBN) loan which was paid into the account of Skye Bank for disbursement to Tuns Farm.

According to the matter, Tuns Farm had dragged Skye Bank before Justice Falola for disbursing the mere sum of N300 million out of the N2 billion loan it secured from CBN under a special loan facility called Commercial Agric Credit Scheme.

According to the plaintiff (Tuns Farm), efforts made to the bank for the release of the balance of N1.7 billion did not yield any positive result, as the bank insisted that it had used the balance to offset a loan previously obtained by the farm.

Dissatisfied with the judgment of the High Court, Skye Bank had approached the Appeal Court and argued that the previous loan had been taken over by the Asset Management Company of Nigeria (AMCON).

However, the Court of Appeal, on Tuesday dismissed the appeal for lack of merit and ordered the bank to pay the damages as ordered by the lower court.

Justice West held that “banks should maintain the economic buoyancy of Nigeria and beneficiaries of credit facilities should use the facility for the benefit of the nation to reduce the level of unemployment in the country.”