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Owigs And Obigs Ltd And Zenith Saga by enewo: 12:03pm On Aug 04, 2016 |
A customer of Zenith Bank, Owigs and Obigs Nigeria Ltd has dragged the bank to a Federal High Court, sitting in Lugbe, Abuja for breach of contract, infringement of bank/customer relationship, incompetence, negligence and professional malpractice that made the plaintiffs to lose three contracts, worth $35million US dollars, to supply solid minerals to Chinese buyers. The matter, with suit no. FCT/HC/M/63TI/16, first came up for hearing on 04 July 2016 but was adjourned to 04 October 2016 as the court could not sit due to the trial judge’s more pressing official duties. In spite of the fact that Zenith Bank was duly served at the company’s secretary office at its headquarters about the case, the bank has not filed any defence to the claims. Neither has it requested an extension of time to enable it file its defence. The Plaintiffs are seeking $35million US dollars as damages. It represents the value of the contracts lost. And in addition N2billion as exemplary damages for the bank’s tort of negligence, which has caused the plaintiffs to lose goodwill and further contract opportunities in China. Plus another sum of N1billion as aggravated damages. According to documents and facts made exclusively available to Checkpointcharley by the Plaintiffs‘ lawyers, Barrister Innocent Daa’gba & Co, sometime in 2014 Owigs and Obigs Ltd, after securing an export licence to export solid minerals, contracted an international agent, Eglone Group Asia pte Ltd to help them solicit buyers in China for tin ore, tantalite ore and columbite ore. Eglone eventually succeeded in getting two buyers for the plaintiffs in March and April 2014. The first contract with contract No. Jy-OONL-001, dated 5th March 2014, was executed between the plaintiffs and Guandong Jiayuan Metals Co. Ltd of China for the supply of Tin Ore valued at $8,700,562,50 on the face of it. While the second contract with Contract No. KTTA 140145, dated 15th of April 2014, was executed between the plaintiffs and King-Tan Tantalum Industry Ltd of China for the supply of two items: a, for the supply of columbite Ore valued at $10,991,684,00 US dollars on the face of it and b, for the supply of tantalite Ore valued at $13,590,000 US dollars on the face of it. The writ of summons sighted by Checkpointcharley states that the defendants (Zenith Bank) accepted for a fee to be the the confirming bank and asked that the letter of credit be routed through them and “this automatically gave the defendants recognition by International Bank of Commerce, china (ICBC), even though ICBC had other partner banks in Nigeria they have conducted business with in the past,” according to the plaintiffs. In a chat with Checkpointcharley, plaintiffs‘ lead counsel, Innocent Ndaa’gba lambasted Zenith Bank for lack of professionalism, amateurism in handling international trade, breach of customer/client bond, negligence and deceit which resulted in huge pecuniary loss to his clients – to the tune of over $35million US Dollars. Ndaa’gba recalled how Zenith was mocked by the Singapore international agent over its lack of grasp of international trade. According to him, the agent could not comprehend how a bank that claims to be a leading bank could not understand that a final letter of credit is as good as cash. “Zenith Bank kept seeking for amendments and demanded that some clauses be added or omitted after it had approved the final draft of the letters of credit issued by the buyer’s bank ICBC and had followed every stage of the transaction. “The defendants held on to those letters of credit issued in favour of the plaintiffs without either declining or confirming same within the validity period. He continued, “The defendants had to be tutored on the act of letters of credit confirmation in international trade by Eglone Group Asia pte Ltd because at one point, they advised and guided the plaintiff, who relied on their expertise, to issue letters for “cash cover” or “pledge of cash” which is strange and unknown to letters of credit confirmation.” From the moment it received the letter of credit, the defendants ought to have known that time was of the essence, the lawyer said. “But due to incompetence, criminal negligence and deceit they fell short of acceptable standards and my clients lost colossal sums due to the terminations of the contracts as a result of Zenith Bank’s inexplicable delay, deceit and ostensible malpractice.” Managing Director/CEO of Owigs and Obigs, Emeka Okorie, said that once the letters of credit were issued his company swung into action towards performing the contracts, including engaging a company, Miracle Waters to source and supply the solid minerals for export. “Miracle Waters were swift and the products sourced and ready for supply by the company was about $6million dollars. “We at Owigs and Obigs also acquired machinery on one year rental fee to dress these products into a standard package fit for export; and upon the unilateral termination of the contract by the defendants, these machinery and the money paid for them went with the wind.” Okorie bitterly recalled how Zenith Bank terminated the performance bond it issued in his company’s favour to one of the Chinese buyers without recourse to the plaintiffs, paid the default fees ($4.486.00) stipulated on the bond to the Chinese company and then went on to debit the plaintiffs‘ domiciliary account. “The defendants know or ought to know that the payment of default fees on the performance bond terminates the contract for which it was issued. “We were not in breach of performance; we were ready to supply. Unfortunately, Zenith Bank that spends millions of dollars boasting on CNN of its stature in international trade messed my company up due to its incompetence and inability to deal with international trade.” Okorie elaborated: “On the 21st of May 2014 and 13th of June 2014, Zenith received two irrevocable export letters of credit with ref nos. LC456011400024 and LC365991400013 respectively from the two Chinese companies through their bankers ICBC. “The issuance of the performance bond by Zenith bank on our behalf, elicited the issuance of the letters of credit as the contract terms demanded in respect of contract no KTTA140415. They were issued based on the contract terms. The performance bond was also part of fulfillment of contract obligation necessary before the issuance of letter of credit acceptable to Zenith Bank as stipulated in the contract. . “However, on the receipt of letters of credit, issued according to the draft copy, earlier approved by the defendants, the defendants kept seeking to change terms of these letters of credits after it was finally issued. “Zenith Bank was confused and held onto these letters of credit, under the pretence that they were unacceptable. The plaintiff deceitfully refused to officially reject the instruction to confirm the letters of credit or reject same. “The bank at one point made the phony demand that except the importer’s bank overseas(ICBC) provided cash cover for them (Zenith Bank), they will not confirm. According to Okorie, the confirmation issue dragged on unnecessarily while the bank kept assuring the plaintiffs that they are on top of the situation and that their liaison office in China had liaised with ICBC to resolve the matter. Obigs and Owigs CEO bitterly recalls how the performance bond period elapsed and also the letter of credit in respect of contract nos. KTTA 140415 and JY-OONL-001 due to the incompetence, negligence and deceit of the defendants – it was later established that Zenith had no liaison office in China “Instead of Zenith Bank to seek an extension of time on both the letters of credit and performance bond to enable them resolve the matter so that we could export the already produced goods worth about $6M, the defendants, without recourse to “Owigs and Obigs” withdrew the sum of $4,486 unilaterally from our domiciliary account and paid off default fees on the performance bond, which automatically terminated the transaction for which it was issued and thereby harming us financially.” Okorie is of the firm opinion that “there was a deliberate aim to frustrate the transaction by Zenith Bank for reasons that can only be explained by them.” He said: “There was a deliberate negligence to puncture the transaction. “We had a pre-contract agreement with Zenith bank that once ICBC issued an acceptable letter of credit through them (Zenith) to us, they will finance the exportation transaction by discounting the letter of credit for us. Hence, they (the bank) gave us the form of acceptable letter of credit, which we forwarded to our importer. This is why I do not understand why the defendants were pettifogging over the eventual letters of credit issued with the terms they suggested and as they wanted them. Checkpointcharley tried in vain to get Zenith Bank to respond to these grievous allegations levelled against them. Our emails, text messages and calls remained unanswered as at going to press. Adapted from https://checkpointcharley.net/2016/08/03/exclusive-zenith-bank-dragged-to-court-for-breach-of-contract-mess-incompetence-negligence-deceit-as-customer-claims-n13bn-damages/ 1 Like 1 Share |
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