The Court of Appeal in Lagos has dismissed an appeal filed by Guaranty Trust Bank Plc (GTB) challenging the judgment of a Lagos High Court delivered by Justice O. A. Ipaye over the N173,260,000.00 credit facility granted to United Capital Trustees Limited.
The appellate court in its lead judgment delivered by Justice Joseph Eyo Ekanem affirmed the decision of the lower court, stating that GTB’s appeal is bereft of merit and dismissed it accordingly.
Other justices on the panel are Justice Muhammed Lawal Shuaibu (presiding) and Justice Folashade Ayodeji Ojo both of whom aligned themselves with the lead judgment.
The facts of the case giving rise to this appeal is that Multichem Industries Limited approached the appellant (GTB) and seven other banks for credit facilities in the initial sum of $123,500,000.00 and 500,000.00 to increase its working capital.
Pursuant to a debenture deed dated 5/7/2011, the appellant (GTB), and the other lending banks jointly and severally agreed to grant to Multichem Industries Limited overdraft facilities, import finance facilities, and term loans in the initial sum of N123,500,000.00 subject to the terms and conditions in the offer letters of each of the lending banks.
There were existing facilities granted to the company by the appellant and one of the other lending banks bringing the total credit facility to N333, 250,000.00.
The appellant contributed the sum of 4173, 260,000.00 to the total facility, which is over half of the entire credit facility.
The appellant and the other lending banks agreed to enter into an inter-lenders agreement and a deed appointing a trustee, to wit; the respondent.
In the course of preparing the documents above, a dispute arose which resulted in the said instruments being signed by the other lending banks; the appellant did not sign the same on the basis that the trustee in preparing the documents did not incorporate its inputs in the documents.
The appellant, therefore, took out an originating summons at the trial court against the respondent and the other lending banks.
The appellant subsequently withdrew the suit against the other lending banks leaving the respondent as the only defendant in the suit.
In the amended originating summons, the appellant sought a determination of the following questions: “Whether the Defendant was right in law in causing the other lenders to Multichem Industries Limited to execute the Inter Lenders Agreement and Deed of Appointment of Trustees dated 6th April 2015 and to stamp same, to the exclusion of inputs contributed by the GTB who is the major lender to Multichem Industries Limited.
“Whether the sum of money the GTB availed Multichem Industries Limited has not become unsecured because of the refusal or failure of the Defendant as trustee of the claimant to accommodate the inputs contributed by the claimant in the Inter Lenders Agreement and Deed of Appointment of Trustees dated 6m April 2015.
“Whether by reason of the refusal or failure of the Defendant as Trustee of the claimant to accommodate the inputs contributed by the claimant in the Inter-Lenders Agreement and Deed of Appointment of Trustees dated 6” April 2015 the Defendants
However, the trial court in its judgment delivered on June 6, 2018, found that there is no iota of merit in the suit and dismissed it accordingly.
Dissatisfied, GTB in its Notice of Appeal prayed to the court to allow the appeal and set aside the judgment of the lower court.
But, appeal court in its judgment delivered on March 17, 2023, affirmed the decision of the lower court.
The court held “It is dear that the appellant and the other lending banks lent money to Multichem Industries Limited which was evidenced by a mortgage debenture trust deed dated 5/7/2011 subject to the terms and conditions stipulated therein as contained in their respective offer letters.
“The appellant and the other lending banks agreed to enter into an inter-lenders agreement to govern their relationship and also execute a deed appointing a trustee to manage the’ security for the facilities, namely: the respondent.
“The respondent circulated a draft of. the first supplemental debenture trust deed and inter-lenders agreement and deed of appointment of a trustee to the appellant and the other lending banks asking for their comments. This was done vide an email in which the respondent — asked for their comments on or before 21st June, 2013.
“The appellant and the other lending banks responded by forwarding their. comments to the respondent though the appellant did so on 11/7/2013. Duly incorporating those comments, the respondent prepared and sent engrossed copies of the first supplemental trust deed and inter-lenders agreement to the appellant and the other lending banks for execution vide a letter that was – received by the appellant on 16/12/2013.
“It cannot, therefore, be said that there was no consensus ad idem (Meeting of the minds) in respect of the inter lenders agreement as prepared by the respondent based on the input of the appellant and the other lending banks.
In the letter forwarding the final draft to the appellant and other lending banks, the respondent stated “Kindly return the executed copies to us on or before 31st December 2013. The appellant did not do so but on 2/1/2014 sent an email to the respondent raising new points.”
They further held that “Given the nature of the transaction and the number of the parties, it was within the contemplation of the parties that directives be given timeously.
“On the whole, I see no merit in the appeal and it fails. I accordingly dismiss the same and affirm the judgment of the trial court.
“In view of the relationship between the parties to the appeal, I order that the parties shall bear their costs.”