Unpaid Debt: Court urged to wind up Advance International Merchant Company

A winding up petition has been instituted 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 winding-up petition was initiated by a Swiss company, FOODIN SA, registered in Geneva, Switzerland, over alleged unpaid debts.

Specifically, the Swiss firm (petitioner) is praying the court to wind up the Nigerian company (respondent) for being insolvent and unable to pay its debt to the petitioner, adding that it is just and equitable that the company should be wound up to realize its asset to satisfy its creditors including the petitioner.

It would be recalled that both the petitioner and respondent have been doing business since 2010. The business relationship 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 remits an agreed sum and retains its earned commission for the marketing and sales of the products.

In its petition before Justice Daniel Osiagor of a Federal High Court, Ikoyi, Lagos, the petitioner argued that sometime in 2015, the respondent began to withhold remittances due to the petitioner, and for no justifiable reason. 

In some instances, according to the petitioner, partial remittances would be made on the invoices and in some instances, no remittances at all even though the purchasers have fully paid for the products.

According to the petition, the respondent as of the moment is indebted to the petitioner as follows:

The sum 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.

The judge was also informed that the petitioner issued several demand emails, letters, follow-ups and paid repeated visits to the respondent's offices to get the respondent to honour the outstanding final invoices submitted, but all to no avail, as demand letters addressed and delivered to the office of the respondent's Managing Director (MD), could still not elicit the desired response or traction, as the final invoices were not paid.

While stating that the respondent vides an undated letter received in January 2022, admitted its indebtedness to the petitioner whilst attributing its cash flow and liquidity challenges to an alleged liquidity and economic crisis of 2015/2016 and some struggles with its bank and other suppliers, the petitioner insisted that it has performed all of its obligations under the existing business relationships, but the respondent has woefully failed to discharge its obligation by its refusal to honour invoices forwarded to it by the petitioner.

Flowing from the alleged refusal of the respondent to make payments under the various invoices issued by it, the petitioner had mandated and authorized its solicitors, to recover its debt from the respondent.

The petitioner through its solicitors particularly in its letter dated January 11, 2022, 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, just as it pleaded for understanding from the petitioner and also indicating that it is working on a repayment schedule.

Consequently, the petitioner asked the court to declare that, “The respondent, Advanced International Merchants Limited, be wound up under the provisions of the Companies and Allied Matters Act, 2020.

“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.

"Interest in the above sums at the rate of 21% per annum from 30th June 2016 to the 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”.

Justice Osiagor, while adjourning the case until October 3, 2023, for hearing, ordered the petitioner to advertise its petition for winding up against the respondent in two National Daily Newspapers.

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