Mainstreet Bank in Multi-million Naira Suit


Faith Tuedor-Matthews

An Abia State High Court sitting at Aba has granted the motion to substitute the name of Afribank Nigeria Plc with Mainstreet Bank Limited in a multi-million naira suit filed against the bank and its capital market subsidiary–Afribank Capital Markets Limited, by Singe Obi Construction Company Limited and 24 others (claimants).

Although the respondents objected to the substitution on the grounds that Mainstreet Bank is not a continuation of Afribank, rather an entirely new outfit, but in his ruling, Justice O.A.K. Ogwe rejected the objection on the grounds that assets and liabilities of Afribank were transferred to Mainstreet Bank. He granted the order as prayed, saying: “Mainstreet Bank Limited is substituted for Afribank Nigeria Plc as the 2nd defendant.

In the same vein, the court dismissed the application of the bank and its subsidiary which sought to strike out the action for want of jurisdiction and to strike out the name of Afribank Nigeria Plc (2nd  defendant) from the suit.

Ruling on the motion, the court held that it has taken care of 2nd defendant’s name by substituting it with Mainstreet Bank Limited. On issue of jurisdiction; Justice Ogwe held that it is the claimants’ claim that determines the jurisdiction of the court.

The reliefs sought by the claimant bother on negligence and injunction and therefore, the suit is not predicted as claimed by the defendants. “The application is misplaced and is hereby dismissed,” the judge ruled.

Singe Obi Construction Company Limited (1st claimant) had in suit No A/ 72/ 2010 filed before Justice Ogwe, contesting its alleged indebtedness of N526, 343, 836 to the bank and instead claiming the sum of N144, 095, 709 owed it by the bank as at September 30, 2009 together with interest.

The transactions which led to the institution of the suit emanated from the agreement between the 1st claimant and the defendants on the margin loan of N450 million which the defendants granted the 1st claimant after payment of equity contribution of N50 million for the satisfaction of share purchase offer by the bank. Twenty four others are joined as co-defendants to the suit.

In their statement of claim filed by their counsel, the claimants prayed for an order directing the defendants to pay 1stclaimant the said sum of N144, 095, 709 together with interest at the rate of 1.25 per cent per month or 17 per cent per annum, which has accumulated from the aforementioned sum from October 1, 2009 till the date of judgement and thereafter, interest on the judgement debt at the rate of 7.5 per cent until final liquidation of the debt by the bank.

Moreover, the claimants are claiming against Mainstreet Bank and its subsidiary the sum of N900 million as general damages for breach of contract arising from the failure of the defendants to sell the 20 million units of the bank’s shares on or before September 17, 2008.

The claimants are also claiming the value of 6,666, 650 units of bonus shares due to them at the rate of N30.98 per unit, totaling  N206, 532, 817 as at September 17, 2008.

Besides they are claiming sums of N10 million and N50 million respectively as accrued dividends as at May 29, 2008 and claimants’ equity contribution to the share purchase agreement; another sum of N2, 161, 536 as fees for the auditors that audited its account with the bank and N15 million as cost of the suit and professional fees of their solicitors Obiora Obianwu (SAN) and K.C. Nwufo.

The claimants prayed for a perpetual injunction restraining the defendants, whether by themselves, servants, agents, privies or otherwise howsoever from publishing and shaming the 1st  claimant or causing its name to be published as one of the debtors or customers with non-performing loans or from disturbing or interfering with the 1st  claimant’s business in any manner whatsoever.

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