Overview
The Court of Appeal has, in a judgment delivered on July 8, 2026, allowed the Appeal in the case of African Export-Import Bank (AFREXIM) v Patnasonic, a dispute over the repayment of a US$25,000,000 (Twenty-Five Million United States Dollars) facility. The dispute arose from a receivables-backed dollar facility granted by AFREXIM to Patnasonic Industries Limited under a Loan Agreement in 2012, with Sterling Bank Plc as local administration agent. Following AFREXIM's demands that Patnasonic repay the outstanding debt in US Dollars rather than Naira, Patnasonic and its Chairman, Chief Patrick Chidolue, sued at the High Court of Lagos State, which on June 25, 2024, found in their favour and dismissed AFREXIM's preliminary objections. AFREXIM appealed, and Sterling Bank filed a related appeal of its own.
In a well-considered judgment, the Court of Appeal agreed with the submissions of Lead Counsel for AFREXIM, Onyemauche Ibezim of KENNA, who argued the appeal and resolved all six issues in AFREXIM's favour. The Court held that the parties were bound by their freely negotiated agreement conferring jurisdiction on the English courts; that AFREXIM enjoyed diplomatic immunity as an international financial institution; and that the initial suit filed by Patnasonic was statute-barred. The Court further held that the facility remained a US Dollar obligation repayable in full in Dollars at the exchange rate prevailing at the date of repayment; that AFREXIM's demand for repayment was a legitimate exercise of its contractual rights; and that English law, as expressly chosen by the parties, governed the Facility Agreement.
This decision reaffirms the principle that parties are bound by the governing law and dispute resolution clauses in their agreement and relieves AFREXIM of an adverse judgment over a facility of USD 25,000,000. As the foremost pan-African multilateral trade finance institution, AFREXIM plays a pivotal role in facilitating cross-border trade and investment across the continent. The Court of Appeal's affirmation of foreign jurisdiction clauses and the enforceability of dollar-denominated obligations bolsters confidence in African markets and strengthens the legal framework that underpins foreign direct investment and cross-border lending in Nigeria and across Africa.
Source: Business Day News
