The ECOWAS Court of Justice, on Friday, ordered the Cross River State Government to repay the sum of $6.5m and an interest of 6.5 per cent per annum with effect from August 31, 2018 to the ECOWAS Bank.
A statement by the Head of Communication Division in ECOWAS Court, Sunny Ugoh, said the money would be for investment and development, being the amount outstanding from a loan granted the government in 2005.
Delivering judgment in a suit filed by the bank, a financial institution and arm of ECOWAS, Justice Edward Asante said the “sum represents the situation of the Tinapa Free Zone Project loan in the applicant’s book as of August 31, 2018.”
Justice Asante asked the government of Cross River to submit to the ECOWAS Court within two months a report on its measures to implement the orders relating to the loan with which the government financed the Tinapa business resort.
The statement said although the court granted most of the reliefs sought by the applicant, it declined the applicant’s claim for immediate execution of the Irrevocable Standing Payment Order, a loan condition precedent mandating the Accountant General of the Federation tagged “Guarantee” in Clause 7.05 of the loan agreement to satisfy the indebtedness.
The statement reads, “The court also refused to grant the applicant’s claim for solicitor’s fees on the ground that it was not backed by documentary evidence. The applicant EBID had filed suit no 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 CRSG as valid, binding and subsisting between the parties; declare the Respondent as having failed to fulfil a loan condition precedent and compel the Respondent to repay the loan with interest.
“The applicant had alleged that despite several demands, the respondent refused and/or neglected to repay the loan with a duration period of seven years after a two-year moratorium. The Cross River State government admitted it approached EBID, an investment and development bank, to part-finance its TINAPA business and resort project located near its Calabar Free Trade Zone, and that both parties signed a loan agreement on May 20, 2005 for a sum of UA6,525,371 equivalent of $10m.”