Justice Akintayo Aluko of the Federal High Court in Lagos has awarded a total of N2.9 billion in damages against Standard Chartered Bank Nigeria Limited for negligence.
The ruling, delivered on January 17, 2025, was in favor of Celplas Industries Nigeria Limited, a defendant and counter-claimant in the case, identified as suit FHC/L/CS/1187/2020.
The dispute began when Standard Chartered Bank filed its Writ of Summons and Statement of Claim on December 2, 2020.
The bank sought declarations against Celplas Industries, claiming the following: that the bank was not in breach of its obligations under the Facility Letter dated September 1, 2014, or subsequent amendments, and that the bank was not required to convert the defendant’s US dollar loan obligations into Naira without a specific request from Celplas.
The bank further contended that various Facility Letters executed in 2016, 2017, and 2018 had amended and restated the original 2014 Facility Letter, making it null and void.
The bank sought a declaration that these later Facility Letters governed the relationship between the parties and that the terms of the 2014 Facility Letter were no longer enforceable.
Celplas Industries, represented by its lawyer Charles Nwabulu, responded by filing a statement of defense and counter-claim on February 12, 2021.
The company argued that Standard Chartered’s refusal to convert the outstanding loan sum of $10,888,856.86 into Naira, when the exchange rate was still N199/$1, was a breach of contract under the utilization clause of the 2014 Facility Letter.
Celplas also claimed losses in business earnings, profitability, and incurred expenses as a result of the bank’s refusal.
The counter-claim sought special damages of N2.77 billion and $743,628 for the losses Celplas suffered from 2019 to 2024, including the sale of its Ball Pen Factory, consultancy fees, and interest on a trade loan.
The company also sought general damages of N700 million for psychological trauma, mental distress, and loss of business goodwill caused by the bank’s actions.
After reviewing the case, Justice Aluko ruled in favor of Celplas Industries, stating that Standard Chartered’s refusal to comply with the utilization clause in the 2014 Facility Letter was indeed a breach of contract.
The court awarded Celplas special damages of N2.77 billion and $743,628 for the business losses incurred due to the bank’s actions.
Additionally, the court awarded N200 million in general damages to Celplas for the psychological distress and loss of business goodwill caused by the bank’s refusal to convert the loan.
The court also awarded N50 million as the cost of the action in favor of Celplas.
Justice Aluko’s judgment included a declaration that the bank had failed to comply with the terms of the 2014 Facility Letter, resulting in substantial financial damage to Celplas.
The court concluded that the bank’s failure to act in accordance with the agreement led to significant losses for the defendant.
The ruling is a clear indication of the importance of contractual obligations and the severe consequences of negligence in business dealings. The court’s decision serves as a reminder to financial institutions to honor their commitments to clients.
In sum, the court found Standard Chartered Bank guilty of negligence, awarding substantial damages to Celplas Industries as compensation for its losses and the harm caused by the bank’s breach of contract.
