Wale Igbintade
The High Court of the Federal Capital Territory (FCT), Abuja, has completely restrained Eunisell Limited from demanding or imposing late-payment prices imposed on Halkin Exploration and Production Limited beneath a contractual clause prescribing a default price equal to 177 per cent yearly.
Justice SB Belgore, in a judgment delivered on October 22, 2026, declared the availability, which imposed a each day cost of 0.5 per cent on excellent funds, an unconscionable penalty that was unenforceable and opposite to public coverage.
The decide additionally nullified all invoices, payments and assessments issued beneath the disputed clause within the service settlement executed by the 2 firms on January 20, 2022.
The ruling has important monetary implications for the events, as Eunisell had beforehand instituted a separate debt-recovery motion against Halkin, in search of $10,240,679.98 in excellent contractual charges, together with $7,624,171.51 in late-payment prices calculated on the disputed price.
However, the judgment didn’t dismiss your entire $10.24 million debt declare, which is distinct from the substantive aid granted within the current go well with.
The dispute arose from a service settlement beneath which Eunisell was engaged to offer specialised engineering providers and function a modular Early Production Facility for Halkin’s operations on the Atala Marginal Oilfield, often known as Oil Mining Lease (OML) 46.
Under the settlement, Halkin was required to pay a set each day service price of $9,900, whereas Clause 10.4 stipulated that the funds made after the contractual deadline would appeal to a default cost of 0.5 per cent each day.
Halkin approached the courtroom to problem the availability, arguing that the speed was extreme, oppressive and designed to punish it for delayed funds fairly than compensate Eunisell for any real monetary loss.
In resolving the dispute, Justice Belgore acknowledged the liberty of economic events to barter contractual phrases however held that such freedom didn’t oblige courts to implement unconscionable penalty clauses.
Relying on the Supreme Court’s resolution in Oyeneyin v. Akinkugbe and the Court of Appeal’s choices in Awutolo v. Okolo and Chevron Nigeria Limited v. Titan Energy Limited, the decide defined {that a} penalty clause was unenforceable the place it was meant to frighten a celebration into performing its contractual obligations fairly than function a real pre-estimate of the loss arising from a breach.
Applying these ideas, the courtroom discovered that the disputed provision imposed an extreme monetary burden on Halkin.
Justice Belgore additionally famous that the settlement was denominated in United States {dollars}, reasoning that this insulated Eunisell from native inflation and forex fluctuations.
The decide additional noticed that Eunisell had did not file a response to Halkin’s amended originating summons inside the time permitted by the relevant guidelines.
Consequently, the fabric averments in Halkin’s affidavit proof remained unchallenged. Citing judicial authorities on unchallenged affidavit proof, the decide held that the claimant’s proof was deemed admitted and accepted by the courtroom.
The courtroom additionally dismissed Eunisell’s preliminary objection difficult the competence of the go well with.
Eunisell had argued that the motion constituted an abuse of courtroom course of as a result of the events had been already concerned in a separate debt-recovery go well with, marked FCT/HC/CV/5599/2024.
The firm additionally contended that the dispute concerned contested information that required a trial commenced by a writ of summons fairly than an originating summons.
Rejecting the objection, Justice Belgore distinguished between the sooner motion, which sought to get well excellent contractual charges, and the current go well with, which sought an interpretation of a particular provision within the service settlement.
He held that an originating summons was applicable as a result of the central problem involved the development of a written contract.
The decide additionally rejected Eunisell’s argument that the existence of the separate debt-recovery motion rendered Halkin’s go well with an abuse of courtroom course of.
In one other facet of the judgment, Justice Belgore dismissed an utility by Eunisell difficult the accuracy of the courtroom’s document of proceedings on May 18, 2026.
The firm had alleged that the courtroom failed to contemplate its opposition to Halkin’s utility to amend its originating summons and incorrectly recorded its counsel as having no objection.
The decide, nonetheless, recalled that Eunisell’s counsel, PL Osakwe, had initially expressed opposition to the modification however subsequently knowledgeable the courtroom that he was not objecting after the decide sought clarification on the grounds for his opposition.
According to Justice Belgore, the courtroom had defined that the problems raised within the preliminary objection may very well be addressed after the modification was granted.
He maintained that the document precisely mirrored counsel’s eventual place and faulted the corporate for failing to observe the prescribed process for difficult a courtroom document.
Relying on the Supreme Court’s resolution in Andrew v. INEC, the decide held {that a} celebration in search of to problem a courtroom’s document should first file an affidavit disputing its accuracy and subsequently carry a proper utility, supported by a separate affidavit, in search of an order to amend it.
The decide dismissed the applying as incompetent and rejected it on its deserves.
He consequently ordered Eunisell to pay N1million in prices to Halkin over the unsuccessful utility, which had delayed the supply of the substantive judgment.
The decide made no order as to prices within the substantive go well with.
