POLARIS BANK LTD V. FORTE OIL PLC (2025)

Background

The respondent, Forte Oil PLC (formerly African Petroleum PLC), commenced suit No. FHC/L/CS/160/2013 at the Federal High Court, Lagos Division, against the appellant, Polaris Bank Limited (formerly Skye Bank PLC), challenging the operation of its Multiple Facilities Account No. 0030015642617. The respondent alleged wrongful deductions, unauthorized charges and interest amounting to ₦3,441,529,445.17 and sought (i) a declaration that the debits were contrary to banking practice, (ii) credit of its account with the aggregate sum, and (iii) a perpetual injunction restraining further deductions.

Facts & History

The appellant denied any irregularity, filed a counter-claim and affirmed compliance with banking regulations. The High Court granted the respondent’s reliefs and dismissed the counter-claim. The appellant appealed to the Court of Appeal, which allowed the appeal in part, setting aside about ₦3.4 billion in excess interest and Commission on Turnover (COT) charges. Both parties then appealed to the Supreme Court, with the respondent raising a cross-appeal.

Issues

1. Whether the Court of Appeal erred in collapsing nine formulated issues into a single issue derived from an omnibus ground.
2. Whether section 133 of the Evidence Act, 2011 was misapplied by ignoring admissions in pleadings and witness testimony.
3. Whether the appellant’s right to fair hearing was infringed by the Court of Appeal’s failure to consider its reply brief.
4. Whether equity and justice were offended by allowing the respondent to retain over ₦24 billion and 46,464,150 shares without remitting proceeds to the appellant.
5. Whether dismissal of the counter-claim concerning the sale of underwritten shares on SEC directive was erroneous.
6. Whether absence of respondent’s statements of account warranted dismissal of the counter-claim on indebtedness.
7. Whether, having found underwriting fees liquidated indebtedness, the appellant was entitled to the shares or their value.
8. Whether the lower court’s setting aside of the monetary award in the respondent’s favour was justifiable.

Ratio Decidendi

The Supreme Court unanimously held that:

• An appellate court has power to reformulate or collapse issues for determination where it serves justice, provided the re-framed issue arises from the grounds of appeal.
• A preliminary objection must target the entire appeal; challenging only specific grounds requires a motion to strike out, not a notice of preliminary objection.
• Concurrent findings of fact by the trial and appellate courts will not be disturbed absent perverse error or misapplication of law.
• Admissions in pleadings are binding and require no further proof; however, no such admission of repayment was found.
• Directives of a regulatory authority (SEC) acted upon in good faith cannot be impugned in absence of SEC’s joinder as a party.

Court Findings

1. The respondent’s preliminary objection was incompetent and struck out, as it only challenged some grounds of appeal.
2. The Court of Appeal properly collapsed multiple issues into a single broad issue focused on the totality of evidence.
3. No admission by the respondent’s witnesses established repayment of the loan; the Evidence Act was correctly applied.
4. The Court of Appeal considered the appellant’s reply brief and explicitly acknowledged it in its judgment.
5. The counter-claim was rightly dismissed: the appellant failed to adduce credible evidence (statements of account) to prove indebtedness and the SEC directive justified the sale of shares.
6. Concurrent factual findings by both courts were sound and supported by documentary evidence; no perversity warranted interference.
7. The cross-appeal lacked merit; the trial court’s restitution award was properly set aside under established banking law precedents.

Conclusion

The Supreme Court dismissed both the main appeal and cross-appeal for lack of merit and affirmed the decision of the Court of Appeal dated 2020-09-11. Each party bears its own costs.

Significance

This decision clarifies the extent of appellate powers to frame issues, limits the scope of preliminary objections, emphasizes the binding nature of admissions, and underscores the importance of proper joinder when challenging regulatory directives in banking and finance disputes.