Breach of Contract: Supreme Court Orders Stanbic IBTC to Pay Customer N2.5billion

Segun Atanda/

The Supreme Court of Nigeria has affirmed the judgement of a Federal High Court in Lagos that ordered Stanbic IBTC Bank Plc to pay one of its customers, Mr Patrick Akinkuotu and his company – Long Term Global Capital Ltd N2.5billion as general damages for a breach of contract.    

The judgement of the apex court arose from the judgement of the Federal High Court in Lagos that earlier awarded the N2.5billion as damages against the bank.     

The case of Akinkuotu and his company against Stanbic IBTC Bank Plc as presented by their lawyer, Chief Felix Fagbohungbe SAN, was that the bank granted overdraft facility of N600million to Long Term Capital Ltd on April 11, 2007.

The bank also granted two additional facilities of N400million and N250million to Mr Patrick Akinkuotu on May 11, 2007, and July 17, 2007, respectively. The facilities were for a term of 365 days with an option of rollover amongst other terms.  

Upon application by Akinkuotu, the facilities granted them were merged and the same was secured with shares held by them in various companies. The bank, upon instruction received via e-mail, sold 28,745,400 units of GTB Plc shares held by Mr Akinkuotu and his company at the sum of N267,775,799.21.     

The Plaintiffs became aggrieved and contended that the proceeds of the shares sold by the bank were very low. They also contended that they have liquidated the overdraft facilities granted them by Stanbic IBTC Bank Plc, consequently, they sued the bank for breach of contract and claimed damages for loss of business opportunity.   

Chief Fagbohungbe SAN, on his part, argued that the case of his client is that of gross negligence and unprofessionally selling the shares separately owned by Mr Akinkuotu and his company at significantly lower and unauthorized prices whilst purportedly acting on Mr Akinkuotu’s unsigned e-mail alone between him and the officer of the bank, Mr.N.Udoh, while ignoring entirely the specific terms of the sale mandate officially issued by his clients

The trial court, while entering judgement in their favour, awarded N2.5billion damages, saying: “The law stipulates that court should discountenance an unsigned document as its contents cannot override a duly executed mandate in the circumstances.”      

Dissatisfied with the judgement of the Court, Stanbic IBTC Bank Plc appealed the judgement, however, its case was dismissed by the court of appeal.      

Thereafter, the bank took its case to the Supreme Court. The court, after appraising the facts and submission of Chief Felix Fagbohungbe SAN appearing with Barrister Abayomi Adeniran as presented on behalf of Mr Akinkuotu and his company and O. Ayanlaja SAN appearing with Tayo Oyetibo SAN for Stanbic IBTC Plc, in a judgment delivered by five panel members of judges dismissed the appeal of the bank for lacking in merit  and awarded cost of N50,000 in favour of Akinkuotu and his company and against Stanbic IBTC Bank Plc .

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