Dangote Cement PLC To Pay N157.5m For Refusal To Honour Terms Of Settlement Agreement

A High Court sitting at Onitsha presided over by Hon. Justice MNO Okonkwo has delivered a Landmark Judgment wherein it ordered Dangote Cement Plc to pay 157.5 Million Naira as cumulative judgment sum for refusal to honour term of settlement agreement voluntarily entered into by it.

The Plaintiffs Ekeson Salins Oil & Gas Ltd, Idoko Ernest Ekene, Udeme John and Ayuba Sadiq had approached the High Court praying the Court vide an originating summons for the following:

(1) A declaration that pursuant to the “Terms of settlement” agreement dated the 13th day of September 2017, between the plaintiffs and Defendant, the Defendant is bound by the terms of the said settlement agreement.

(2) An Order compelling the Defendants to forthwith honour the said terms of settlement agreement by paying the plaintiffs the sum of N6,000,000.00 (Six Million Naira).

(3) General damages in the sum of N500, 000,000.00 (Five Hundred Million Naira).

(4) N10, 000,000.00 (Ten Million Naira) as cost of legal fees/cost f the present litigation.

(5) 35% interest per annum (or prevailing CBN interest rate) of the judgment sum form date of delivery of judgment until final liquidation of the judgment sum.

The plaintiffs earlier commenced action in Suit No: HK/10/2017 for reckless, negligent and dangerous driving of Defendant driver that led to the death of the 3rd and 4th plaintiff’s brothers and complete destruction of vehicle of 1st plaintiff.

The Defendant initiated settlement of the case and the parties after several discussions arrived at certain terms which was reduced into writing and duly executed by all the parties as “Term of Settlement Agreement”.

Unfortunately or rather regrettably, the Defendant reneged from honouring the said term of settlement agreement thereby compounding the sorrow and misery of the plaintiffs. The action of the defendant was reprehensible to say the least. The defendant argued that the vehicle that caused the accident was not its vehicle.

One wonders how a reputable company like the defendant would enter into a Term of settlement agreement duly executed by them without verifying the authenticity of the claims that led to the settlement/compromise.

Be that as it may, it is trite law that parties are bound by the terms of agreement they freely enter into and duly executed by them. In line with this age long fundamental principle of law, the Plaintiffs commenced action in suit No: O/9/2018 to enforce the said term of settlement agreement.

The defendant never denied the existence of the said agreement nor questioned the due execution of same by them. Rather, the defendant argued that the agreement was tainted with misrepresentation, fraud and or mistake and hence they were not bound by same. The court in a considered judgment raised the question of whether the defendant was actually misled or fraud/deception practiced on them.

The court after thorough review of all evidence placed before it came to the irresistible conclusion that there was no fraud, misrepresentation or mistake. In the words of the court, “if there was any misrepresentation, fraud, deception or mistake, it was self induced and perpetrated by the defendant with the sinister intention of fostering a situation of fait accompli on the plaintiffs all aimed at frustrating the terms of settlement it freely, wholeheartedly and voluntarily entered with the plaintiff”.

The court also considered the issue of whether an unadopted term of settlement withdrawn and struck out is enforceable against the parties to it. The court relying on the Supreme Court authority of Abbey & ors v Alex & ors (1999) 14 NWLR (PT. 637) 148, held that agreement entered by parties are binding and enforceable even if not made a consent judgment.

Such terms of agreement creates a new cause of action different from the original cause of action. Furthermore, the term of settlement extinguished the original cause of action. Term of settlement does not derive its power, existence or validity from it being adopted by the court. The term of settlement was binding immediately upon execution.

In the final analysis, all issues raised in the case were resolved in favour of the Plaintiffs and against the Defendant thus upholding the arguments and submissions of C.J. Okeke Esq. (Principal Partner TRULAW CHAMBERS).

Accordingly, judgment was entered in favour of the plaintiffs for cumulative sum of N157, 500,000.00 (One Hundred and Fifty Seven Million Five Hundred Thousand Naira) together with 35% interest on the judgment sum till final liquidation.

This judgment goes as a warning to all, especially corporate bodies on the binding effects of agreements duly entered into.