Thursday 14th November 2019
Thursday, 14th of November 2019
Home / News / Business / Firm files $45m suit against bank over alleged breach of contract

Firm files $45m suit against bank over alleged breach of contract

An aviation firm, Topbrass Aviation Limited, has instituted a $45 million breach of contract suit against Diamond Bank Plc, before a Federal High Court, Lagos.

Federal High Court

The Federal High Court in Lagos

Topbrass Aviation Limited, in the suit marked FHC/L/CS/1488/2017, is seeking an order of the court for special damages of the sum of $19.250 million against Diamond Bank for being the revenue or income it lost from December 2014 to the date of filling the suit, which is allegedly caused by the bank’s unethical practices.

The aviation company is also seeking an order of court to compel Diamond Bank Plc to pay it the sum of $25 million and $875,000 as special and exemplary damages respectively, for several outrageous and reprehensible breach of its banker’s duties to it, and for loss of income which would have accrued to it from the commercial use of its aircraft.

Narrating what brought about the current legal action, the aviation firm in an amended statement of claim filed before the court by its lawyer, Fidelis Albert, stated that it has a banker/customer relationship with Diamond Bank and such relationship is still subsisting. That it opened and maintain bank accounts with the bank in the course of banking business.
According to the company, it maintains three Dollar- and two Naira-denominated accounts with the bank.

The aviation firm stated that, sometime in 2010, it bided for and was awarded a multi-million-dollar contract by Chevron Nigeria Limited (CNL) to provide aircraft charter and auxiliary aviation support services for Chevron, and that, by the terms of the contract, it had the obligation to deploy two Bombardier Dash-8Q300 aircraft for the exclusive use and Service of Chevron Nigeria Limited on an initial two-year charter.

ALSO READ:  Nigerians seek opportunities at SNEPCo business summit

The purchase price for the aircraft was $9.5 million. However, the cost of undertaking a comprehensive back-to-service maintenance on the aircraft before it could introduce the aircraft to its fleet for routine flights was over $1 million and, on account of prohibitive cost, it was constrained to approach Diamond Bank, as its banker’s, for a loan to finance the purchase, maintenance and importation of the aircraft.

The aviation firm stated further that, in obtaining the credit facility, it entered into series of negotiations with Diamond Bank and after its proposal including the risk, cash flow projections, income stream on existing contract, potential incomes and commercial viability has been fastidiously assessed by the bank, and upon the conclusion of the negotiations, it was granted credit facility of $10.5 million.

The plaintiff also stated that, by the term of the offer letter of the facility, it required making an equity contribution to the loan portfolio to the tune of 10 percent of the value of the credit facility, which amounted to the sum of $1.050 million.

The plaintiff further stated that, sometimes in 2010, it entered into an Aircraft Maintenance and Service Provider Agreement (AMSP Agreement) with an aircraft maintenance facility in South Africa known as Executive Maintenance (Pty) Limited.

ALSO READ:  NFF calls for resignation of integrity officers

Pursuant to the AMSP Agreement, it began servicing and/or maintaining it’s aircraft fleets with Execujet. The first aircraft, a Bombardier DHC-8-Q315 marked 5N-TBC and MSN 614, was delivered to Execujet for ‘C’ check sometime in March 2013, for which Execujet completed the scheduled maintenance within a 10-week period at a total cost of about $650,000 million.

The plaintiff alleged that Diamond Bank interference with its contract with Execujet, through deceit, fraudulent misrepresentation and breaches of banker’s fiduciary duties to it, gave Execujet the impetus to boldly defraud it and foster the chains of fraud and breach of contract.

The plaintiff further alleged in its particulars of damage that Diamond Bank breached its banker’s duties of confidentiality, care, good faith and honouring mandate to it, without cause, by: divulging its credit standing and private financial information to Execujet in a false, misleading and inaccurate manner; maliciously misrepresenting its credit standing to Execujet without authority, refusing to honour its payment mandate to vendors in respect of the aircraft, thereby injuring it’s credit and reputation.

It also stated that Diamond Bank unilaterally accessed and made payments without and against the mandate of the company. And that the bank covertly and maliciously interferred with or circumvented it’s contractual relationship with Execujet, or unjustly inducing Execujet to breach its Aircraft Maintenance Agreement with the company, including countermanding the company’s instructions and directives to Execujet in respect of maintenance of the Aircraft and incidental matters.

ALSO READ:  Children’s Day: Rescue of 82 Chibok schoolgirls described as significant

The plaintiff averred that, quite unknown to it, and while it was labouring to resolve payment issue with Execujet, Diamond Bank had sometime in January 2015, surreptitiously circumvented it, and commenced clandestine discussion with the Execujet with a view to retaining the services of Execujet as its agent for sale of the aircraft. With this, the plaintiff said, Diamond Bank and Execujet concluded an agreement dated May 14, 2015, the agreement it said intended to overreach and extinguish its proprietary and ownership right of its aircraft.

They also averred that Execujet concluded maintenance of the aircraft in October 25, 2016, however following the action of Diamond Bank, Execujet was in dilemma of who to hand over the aircraft to, in view of competing claims of the company and Diamond Bank, adding that, with the steps taken by the Diamond Bank, consequently Execujet continued to unlawfully retain the possession of the aircraft in South Africa at Diamond Bank’s behest and pleasure, while the actions taken so far has put Topbrass Aviation company in a state of perpetual indebtedness to the bank.

Consequently, Topbrass Aviation Limited is urging the court to grant all it’s above-stated reliefs against Diamond Bank.

However, the court has adjourned till next month for hearing when Diamond Bank must have filed its amendment statement of defence.

By Chinyere Obia

%d bloggers like this: