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Atlantic Brothers sues Oceanic for N4bn over breach of duty

Written by Godwin Oritse

Monday, 06 October 2008

Source: Vanguard
A petroleum products marketing firm, Atlantic Brothers, has instituted a N4 billion suit against Oceanic International Bank for fraud and breach of duty, following the bank’s failure to honour an Ecobank cheque of N1.371 billion paid into the bank since May 2008.

In the suit no LD/1001/2008, filed before Justice Sunday Ishola of the commercial division of the court, Atlantic Brothers Limited, the claimant sought an order of the court that the bank pay the sum of N1,371,700,000.00, being the value of the cheque issued on May 9, 2008 by one Israel Ame of Messrs Crestgrade Oil and Gas limited.
The claimant further demanded interest on the sum at the rate of 21 per cent per annum from June 6, 2008, being the maturity date for payment of the cheque

Besides, the claimant demanded N2 billion as general damages from the bank and N1 million as the cost of the suit at the court.
According to the fact of the case, the claimant sold and supply low pour fuel oil to Crestgrade Oil and gas and in settlement of its indebtedness to the claimant, Israel Ame, director in charge of operations in the oil and gas company issued an Ecobank cheque No. 00000069 in the sum of N1,371,700,000.00 to the claimant on May 9, 2008.

The claimant through Emenike Ubiaru, its counsel, averred that on June 2, 2008, it deposited the cheque into its Oceanic Bank account at Awolowo Road Ikoyi branch for payment but till date, the bank has neither credited the said account with the money nor returned the cheque as unpaid to the claimant despite repeated visits and demands by the claimant and to whom no tangible information was given as to the status of the cheque or its cash value.

The claimant further averred that the only information emanating from the bank was that being a large volume withdrawal, Ecobank, which is the paying bank, had not completed clearing activities on the cheque hence the need to exercise patience and that the account would be credited to the tune of the cash in due course.

Moreover, the claimant averred that after the mandatory required three working clearing days by clearing rules of the bank had elapsed and the cheque not returned as unpaid neither was it credited to the account, it suspected foul play in the transaction and when it applied and obtained its statement of account, on July, 21, 2008, it discovered for the first time and contrary to standard banking practice, that there was a notice in the account quoted for June 5, 2008, which states that the cheque had been dishonoured, which made the claimant protest the situation to the bank since it runs contrary to the information given by the bank as to the status of the bank, but the bank officials exhibited a confused and lack of clear understanding of the circumstances surrounding the transaction and could not offer any possible explanation.

The claimant contended that the bank’s failure to immediately inform it of the status of the transaction and return the cheque have deprived the claimant of the ability to take urgent steps to recover the cash value of the cheque from the drawer as both Israel Ame, the issuer of the cheque and Messrs Crestgrade Oil and Gas Limited have become incommunicado as all efforts to locate them in order to recover the debt proved abortive and it has no hope of ever being able to locate them again.

According to the claimant, the bank’s conduct in the transaction are indicative of the fact that it is in connivance with some third parties with the sole aim of depriving the claimant of the benefit of the cheque and the circumstance of this transaction is an example of how payments can be frustrated through deliberate acts in the banking industry.
The claimant added that failure of the bank to credit the account has caused damages and untold hardship to the claimant, by bringing grievous harm to its business.

However, in a statement of defence filed by the bank through Folu Aremu, its counsel, the bank averred that upon dishonouring the cheque by Ecobank, it physically communicated the message to the claimant on June 4, 2008 and about two weeks after informing the claimant, the claimant showed up at the bank in company of an assistant Superintendent of Police from the Special Fraud Unit of the Police to demand the original cheque from the bank which they knew that Ecobank was withholding it.

The bank insisted that Ecobank never gave value to the said cheque and consequently, it cannot credit the account of the claimant and by so doing, it neither acted fraudulently in the circumstances having discharged its duty as the collecting bank.

The bank urged the court to dismiss the suit filed by the claimant wit substantial cost against the claimant for bringing claims which are frivolous, vexatious, fraudulent and gold-digging, in the nature of a wild goose chase against the bank.

The bank also urged the court to award cost of N1.5 million against the claimant being the cost of avoidable burden needlessly and unnecessarily brought upon the bank in the defence of the suit.
Justice Ishola has adjourned the suit to October 8, 2008 for Pre-trial conference.

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Comments (2)

	1. Written by This e-mail address is being protected from spam bots, you need JavaScript enabled to view it on 06-10-2008 17:17 - Guest
	Oceanic has no fault What is the complainant talking about? he has been given a dud check and that is no fault of Oceanic Bank. the check was an Eko bank check and if the amount is not received fron EKo bank, does he expect that Oceanic pay him from their pocket. Please he has no case

	2. Written by This e-mail address is being protected from spam bots, you need JavaScript enabled to view it on 07-10-2008 16:32 - Guest
	really bad i am surprised and disappointed in Oceanic for perpetrating such an act

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