The says it has secured a landmark judgment to the tune of N556,493,034.16 in favour of depositors of Lead Merchant Bank Limited (in-liquidation).
According to Punch, the judgment was recently delivered by Justice Ibrahim Buba of the Federal High Court, Lagos in a matter instituted by First Bank of Nigeria Limited over a claim of indebtedness by Lead Merchant Bank to the First Bank prior to the revocation of the closed bank’s licence in 2006 by the Central Bank of Nigeria.
FBN had claimed in its suit before the court that the closed bank became indebted to it under a clearing and settlement banking transaction and that as of March 9, 2006, when the bank’s licence was withdrawn, the indebtedness stood at N556.4m, a statement by the NDIC said on Thursday.
The applicant further claimed that the transaction was secured by an unregistered legal mortgage over Lead Merchant’s property at No.1, OladeleOlashore Street, Lagos, and that the property was covered by a registered deed of assignment – the originals of which the defunct Lead Merchant deposited with the applicant as security for the transaction.
In its judgement, the court held that the applicant’s claim bordered on the priority of payment where a bank suspended payment or was unable to meet its obligations.
This, the court stated, was settled by Section 54 of the Bank and Other Financial Institutions Act Cap B3 Laws of the Federation of Nigeria 2004 which provides thus, “Where a bank is unable to meet its obligations or suspends payment, the assets of the bank in the Federation shall be available to meet all the deposit liabilities of the bank and such deposit liabilities shall have priority over all other liabilities of the bank.”
The court therefore dismissed the applicant’s originating summons as lacking in merits, and awarded the cost of N250,000 in favour of the respondent, the statement added.
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