The ECOWAS Court of Justice has ordered the government of Cross River State to repay $6,455,846 and an interest of 6.5% per annum starting from 31st August, 2018 to the ECOWAS Bank for Investment and Development, EBID, being the amount outstanding from a loan granted the state in 2005.
A three-man panel of the court gave the order in a unanimous judgment on Friday, February 5, 2021, in a suit brought by the bank, an agency of ECOWAS, an official of the court, Elohor Ovadje said in a statement.
Justice Edward Amoako Asante, President of the court, who delivered the judgment, said the “sum represents the situation of the Tinapa Free Zone Project loan in the Applicant’s book as at 31st August 2018.”
The court also ordered Cross River to submit to the court, within two months, a report on its measures to implement the Court’s orders relating to the loan with which the government financed the Tinapa business resort.
It granted almost all the reliefs sought by the bank but declined EBID’s claim for immediate execution of the Irrevocable Standing Payment Order, ISPO, a loan condition precedent mandating the Accountant General of the Federal Republic of Nigeria tagged “Guarantee” in Clause 7.05 of the loan agreement to satisfy the indebtedness.
The court also refused to grant the EBID’s claim for solicitor’s fees on the ground that it was not backed by documentary evidence.
EBID had filed the suit, marked; ECW/CCJ/APP/14/19 on 2nd April, 2019 urging the court to declare its Loan Agreement No 7/AP/LAR/FRDF/04/05 with Cross River as valid, binding, and subsisting between the parties.
It also prayed the court to declare Cross River as having failed to fulfill a loan condition precedent, and proceed to compel it to repay the loan with interest.
It alleged that despite several demands, the Respondent refused and or neglected to repay the loan with duration period of seven (7) years after a two-year moratorium.
In its response, Cross River admitted it approached EBID to part finance its TINAPA business and resort project located near its Calabar Free Trade Zone and both parties signed a loan agreement on 20th May 2005 for a sum of UA6, 525,371 equivalent of USD10, 000,000.
It claimed to have made repayments until 2010 when it defaulted due to an administrative issue and the repayment schedule for the outstanding payment of $5,692,376 was restructured to run from 7 January 2010 to 1 January 2020.
The respondent added that it paid installments totalling UA3, 277,080 by 1 January 2014.
In its judgment on Friday, the court noted that the Cross River defaulted on its repayment schedules.
Other members of the panel were Justices Gberi-Be Ouattara and Januaria Moreira Costa.
