WorldStage Newsonline– The Federal Court of Appeal sitting in Akure, on Tuesday upheld an earlier judgment of an Osun state High Court sitting in Osogbo ordered Skye Bank Nigeria Plc to pay N2.5 billion as damages to an Osogbo based firm, Tuns Farm Nigeria Plc over breach of contract.
The court in an unanimous judgment delivered by Justice Denton West dismissed the appeal filed by the Skye Bank and also averred that the lower court had the right to award both special and general damages to the appellant for breach of contract.
Justice Oyejide Falola of an Osogbo High court had in March 2014 ruled that the Skye Bank Plc erred in law by the non fulfilment of contractual agreement entered into on a loan facility of N2 billion with the farm.
Justice Falola 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 Plc for disbursement to the bank customer.
The Tuns Farm Nigeria Limited had dragged an Osogbo branch of the Skye Bank Plc before the court for disbursing the sum of N300 million out of the N2billion loan it secured from CBN under a special loan facility called Commercial Agric Credit Scheme.
According to the plaintiff, efforts made to the bank for the release of the balance of N1.7b did not yield any positive result as the bank held that it has used the balance to offset a loan previously obtained by the farm.
However, the Skye Bank disagreed with the arrangement, saying the previous loan had been taken over by the Asset Management Company of Nigeria (AMCON) and appealed against the judgment of the court by filing an appeal at the Akure division of the Court of Appeal.
But, the Court of Appeal dismissed the appeal for lack of merit and ordered the bank to pay the damages.
Justice West said, “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.”
The court also over-ruled the preliminary objection of the appellant and awarded N2.4 billion as special Damages and N150 million as general damages against the bank.
Justice West maintained that the respondent needed special damages for breach of contract, having fulfilled all conditions for the release of the credit facility.
The lead Counsels to both the Appellant and the Respondent, Messrs Dipo Olasope and Alex Owoeye respectively hailed the judgment.
Source: worldstage
