Swiss Company Urges Court To Wind Up Advance International Merchant Company Over Unpaid Debt
OpenLife Nigeria reports that a Swiss Company FOODIN SA registered in Geneva Switzerland, has filed a winding up petition against a Nigerian company Advanced International Merchants Limited, a Company registered under the laws of the Federal Republic of Nigeria, and having its head office at Okoya Estate, 6 Fathai Doherty Close, Adeniyi Jones, Ikeja, Lagos.
The swiss company (the Petitioner) is praying the court to wind up the Nigerian company(the respondent). for being insolvent and unable to pay it’s debt to the petitioner,it is therefore just and equitable that the company should be wound up so as to realize its asset to satisfy it’s Creditors including the petitioner.
Foodin S.A.and the Advance International Merchant limited have been doing business since 2010.
The nature of the business relationship between the Petitioner and the Respondent is such that the Petitioner sends special food products, flavours, ingredients and formulation Products to the Respondent in Nigeria on credit. The Respondent in turn sells those Products to the target market in Nigeria.
Upon the sale of the Products in the Nigerian Market, the Respondent remitted an agreed sum and retains its earned commission for the marketing and sales of the Products.
Sometime in 2015, the Respondent began to withhold remittances due to the Petitioner, and for no justifiable reason. In some instances, partial remittances would be made on the invoices and in some instances, no remittances at all despite the fact that the purchasers have fully paid for the products.
Since 2015/2016, the Petitioner had pending final invoices awaiting the Respondent’s settlement.
Arising from withheld remittances referred to , the Respondent is at date indebted to the Petitioner as follows:
(a)The sum of USD 367 032.95 (Three Hundred and Sixty – Seven
Thousand, Thirty – Two Dollars, Ninety – Five cents;
(b)The sum of GBP 214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound), and
(c)The sum of ? 317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents
The Petitioner issued several demand emails, letters, follow ups and paid repeated visits to the Respondent’s offices with a view to getting the Respondent to honour the outstanding final invoices submitted, but all to no avail as demand letters addressed and delivered to the office of Respondent’s Managing Director could still not elicit the desired response or traction, as the final invoices were not paid.
Upon the Petitioner’s further follow up, the Respondent vide an undated letter received in January 2022 admitted its indebtedness to the Petitioner whilst attributing its cash flow and liquidity challenge to an alleged liquidity and economic crisis of 2015/2016 and some struggles with its bank and other suppliers.
The Petitioner has performed all of its own obligations under the existing business relationships but the respondent has woefully failed to discharge its own obligation by its refusal to honour invoices forwarded to it by the Petitioner.
Flowing from the refusal of the Respondent to make payments under the various invoices issued by it, the Petitioner mandated and authorized its Solicitors, to recover its debt from the Respondent.
By a letter dated 11th January, 2022, the Solicitors to the Petitioner, issued a demand to the Respondent to liquidate its lingering indebtedness to the Petitioner within 14 days as follows:
(a)The sum of USD 367 032.95 (Three Hundred and Sixty – Seven
Thousand, Thirty – Two Dollars, Ninety – Five cents;
(b) The sum of GBP 214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound); and
(c) The sum of € 317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents
Rather than liquidate the debt, the Respondent caused its Solicitors,to write the Petitioner’s Counsel admitting the USD 367,032.95 and GBP 214,626.00 debts but rather than pay requested for understanding from the Petitioner and also indicating that it is working on a repayment schedule.
By a letter dated 16th January, 2022, the Petitioner’s Counsel replied the Respondent’s letter of 15th January, 2022 requesting the Respondent to make payment of the admitted debt of USD 367 032.95 (Three Hundred and Sixty – Seven Thousand, Thirty – Two Dollars, Ninety – Five cents) and the sum of GBP 214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound) within seven days, and also urged the Respondent to supply verifiable details of how much it believes it is owing the Petitioner in connection with the sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents which the respondent had alleged was higher than its actual Euro debt.
Upon the Petitioner’s expiration of the 14 days’ notice given to the Respondent by the repeated failure of the Respondent its to honour its commitments, as a result to of
which the business of the Petitioner has suffered due to the withheld funds over the years, the Petitioner, in compliance with the provisions of sections 517(d) and 572 (a) of the Companies and Allied with Matters Act, 2020 issued a statutory demand notice on the Respondent on 8th February,2022 requesting the Respondent to pay the debt within three weeks from the date of receipt or face the consequence of winding up proceedings.
By a letter dated 2nd February, 2022, after receipt of the Winding up Notice the Respondent through its counsel cheekily informed the Petitioner that it has commissioned a firm of chartered accountants to study all the books of accounts touching on the Respondent’s business with the Petitioner which will take a period of six weeks after which a repayment plan and schedule for the admitted debt would be presented as well.
By another letter dated 22February, 2022, the Petitioner’s Counsel, in response to the Respondent’s letter of 2nd February, 2022, drew the attention of the Respondent’s counsel to the fact that the insinuation by the Respondent that the sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents) does not represent what it believes it is owing the Petitioner is speculative as the Respondent had failed to state the amount of its alleged commission which it claimed were not deducted from the affected transactions leading up to the amount claimed. Further, that the allusion to the economic challenges in the country is an afterthought being that the debt in question were from 2015/2016.
Rather than pay its debt, the Respondent, by another letter dated 2nd March, 2022 addressed to the Petitioner’s Solicitors expressed its willingness to settle any undisputed invoices of the Petitioner but did not indicate any particular time line for the payment.
By a letter dated 7 March, 2022, the Petitioner’s Counsel replied the Respondent’s Counsel and expressed grave concern over its client’s cheeky attempt to use a procured audit exercise in 2022 as an excuse not to pay its debts of 2015/2016 especially the fact that it has admitted the USD Dollar and the Pound Sterling components of the debt which ought to have been
paid as a mark of good faith.
By a letter dated 29th March, 2022 which was sent via email of 3151 March, 2022, the Respondent’s Counsel sent a letter to the Petitioner’s Counsel informing him of the outcome of the unilateral reconciliation and audit exercise done on the books of the Respondent in relation to the debt owed to the Petitioner. The Respondent through its Solicitors further admitted the debt of the sum of USD 367 032.95 (Three Hundred and Sixty – Seven Thousand, Thirty – Two Dollars, Ninety – Five cents) and the sum of GBP 214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound) as it had done previously on 15th January, 2022.
Furthermore, in relation to the outstanding debt in Euro, the Respondent admitted the sum of € 195. 320. 40 (One Hundred and Ninety – Five Thousand, Three Hundred and Twenty Euros, Forty cents) out of the debt of € 317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents) alleging that its commissions were not deducted from the said sum of €317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy – Six Euros, Eighty – Six cents.
The Respondent further indicated that the Petitioner is at liberty to request to see the ‘documentary evidence’ of the unilateral reconciliation done by the Respondent forming the basis of the Respondent’s reduction of the debt from
EURO 317, 276.80 to only EURO 195,320.40.
By a letter dated 5th April, 2022, the Petitioner’s Counsel in response to the Respondent’s Counsel letter of 29th March, 2022, requested that copies of the documentary evidence of their reconciliation and audit exercise be sent to the Petitioner’s Counsel by 5th April, 2022 for their review and comments along with a repayment plan of how the Respondent proposes to liquidate the admitted debts in USD, GBP, and the undisputed part of the EURO debts as a show of good faith.
The Respondent failed to respond to the said letter of 5th April, 2022, and also failed to send the documentary evidence of the Reconciliation and audit exercise it unilaterally and purportedly did on the debts it owes the Petitioner. It also failed to send in a repayment plan for the admitted debts as requested and also refused to make any form of payment.
By a letter t dated 25th April,2022,the Petitioner’s counsel send a reminder to the respondent Counsel expressing their displeasure over the respondent’s failure to respond to the Petitioner’s letter of 5th April, 2022 as well as send the documentary evidence of the Reconciliation exercise it unilaterally did on the debt it is owing the Petitioner and a repayment plan for the admitted debts. It further informed the Respondent’s Counsel that the Petitioner would be forced to proceed to seek redress in Court by the end of April, 2022 should the Respondent continue its recalcitrant attitude towards the matter.
Upon the receipt of the Petitioner’s Counsel letter of 25th April, 2022, the Respondent’s Counsel sent in a letter dated 29th April 2022 with an attachment titled “Summary of AIML’s position with FOODIN as at 3rd December 2021” in an attempt to justify its stance that only the sum of Euro 195, 320.40 was due from the Respondent to the Petitioner on the Euro portion of the debt instead of the sum of Euro 317, 276.86 claimed by the Petitioner.
The said “Summary Report” attached to the letter of 29th April, 2022 is undated. It is not authenticated by any identifiable person let alone by the “Chartered Accountant” and with no factual details or narration that led to the conclusion arrived as to lower the Euro sum it is owing the Petitioner.
The Petitioner’s Counsel, by a letter dated 16th May, 2022 informed the Respondent’s Counsel that a review of the letter by the Petitioner showed that the terse and unauthentic report is misleading, incorrect as it lacks empirical and credible basis on how the conclusive figures were arrived at. To put the matter in proper perspective and in further demonstration of transparency, the Petitioner attached its comprehensive reconciliation report of all Euro transactions between it and the Respondent covering the years 2013 December 2021 capturing inter alia the total amount of invoices unpaid by AIML, the total amount of Commission and Credit Note unpaid by Foodin to AIML as well as the reconciled total amount of Euro 317, 276.86 due and payable by AIML to Foodin so as to put to the rest the Respondent’s baseless contention.
The Respondent was given another seven days grace period to liquidate the entire outstanding debt comprising the admitted debt of USD 367,032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents) the sum of GBP 214 626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty-Six Pound) and the sum of ?317 276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy-Six Euros, Eighty-Six cents).
Over fifteen weeks have lapsed since the Petitioner issued and served the Statutory Demand Notice on the Respondent on 8th February, 2022 but the Respondent has failed, refused, defaulted and/or neglected to pay or satisfy the said debts.
At this point in time, it is clear to the Petitioner that the Respondent is insolvent and/or unable to pay its debts to the Petitioner.
Despite repeated calls and demand the Respondent has serially failed, refused and is unable to liquidate its outstanding debt to date.
The Petitioner has suffered enormous business damage particularly with its funds withheld by the Respondent for about 6 years now which the Respondent has instead selfishly used for its own business thereby depriving the Petitioner of its legitimate use of the funds for its business over the years. The debts being of a commercial nature attracts interest at the applicable commercial rate of 21% per annum from 2016 till date.
The Petitioner expressed shock at the level of contractual breaches with impunity, insensitivity and bad faith characterizing the Respondent’s business conduct, predatory nature, and attitude with no regard for sanctity of contracts which is a measure of bad faith and lack of conscience.
By obtaining Products from the Petitioner and for over 5 years failing and being unable to pay the debts, and instead giving all manner of excuses including illiquidity, the Respondent is insolvent and ought to be wound up under the law with a view to realizing its assets and liquidating its debt to the Respondent and other unsuspecting creditors in the interest of justice.
By all indications, the Respondent is insolvent and/or unable to pay its debt.
The commercial interest rate in Nigeria for borrowing hovers about 21% presently in the banking industry which represents the losses suffered by the Petitioner over the withheld funds.
The Respondent is insolvent and unable to pay its debt to the Petitioner, and it is therefore just and equitable that it be wound up so as to realize its asset to satisfy its Creditors including the Petitioner.
The Petitioner therefore humbly prays as follows:
That the Respondent, Advanced International Merchants Limited, be wound up by the Court under the provisions of the Companies and Allied Matters Act, 2020.
Alternatively an Order entering judgment in the aforesaid sums of:
USD 367 032.95 (Three Hundred and Sixty-Seven Thousand, Thirty-Two Dollars, Ninety-Five cents).
GBP 214,626.00 (Two Hundred and Fourteen Thousand, Six Hundred and Twenty – Six Pound); and
€317,276.86 (Three Hundred and Seventeen Thousand, Two Hundred and Seventy-Six Euros, Eighty-Six cents;
(d) Interest in the above sums at the rate of 21% per annum from 30th June 2016 to date of judgment and final liquidation of the entire judgment debts, and the entire judgment debts be fully paid within 14 days from the date of judgment.
And for such other or further order (s) as the Honourable Court may deem fit to make in the circumstances of this case.
Meanwhile, based on an application filed before the court,the presiding Judge Daniel Osiagor has granted an order to the petitioner to advertise it’s petition for winding up against the respondent in two National Daily Newspapers.Thereafter the case was adjourned to the 3rd of October,2023 for hearing.
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