Wale Igbintade
The High Court of the Federal Capital Territory (FCT), Abuja, has completely restrained Eunisell Limited from demanding or imposing late-payment expenses imposed on Halkin Exploration and Production Limited beneath a contractual clause prescribing a default charge equal to 177 per cent yearly.
Justice SB Belgore, in a judgment delivered on October 22, 2026, declared the supply, which imposed a day by day cost of 0.5 per cent on excellent funds, an unconscionable penalty that was unenforceable and opposite to public coverage.
The choose 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, searching for $10,240,679.98 in excellent contractual charges, together with $7,624,171.51 in late-payment expenses calculated on the disputed fee.
However, the judgment didn’t dismiss all the $10.24 million debt declare, which is distinct from the substantive reduction granted within the current swimsuit.
The dispute arose from a service settlement beneath which Eunisell was engaged to offer specialised engineering companies and function a modular Early Production Facility for Halkin’s operations on the Atala Marginal Oilfield, also referred to as Oil Mining Lease (OML) 46.
Under the settlement, Halkin was required to pay a set day by day service charge 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 day by day.
Halkin approached the court docket to problem the supply, arguing that the speed was extreme, oppressive and designed to punish it for delayed funds moderately than compensate Eunisell for any real monetary loss.
In resolving the dispute, Justice Belgore acknowledged the liberty of business 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 selections in Awutolo v. Okolo and Chevron Nigeria Limited v. Titan Energy Limited, the choose defined {that a} penalty clause was unenforceable the place it was supposed to frighten a celebration into performing its contractual obligations moderately than function a real pre-estimate of the loss arising from a breach.
Applying these rules, the court docket 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 foreign money fluctuations.
The choose additional noticed that Eunisell had didn’t 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 choose held that the claimant’s proof was deemed admitted and accepted by the court docket.
The court docket additionally dismissed Eunisell’s preliminary objection difficult the competence of the swimsuit.
Eunisell had argued that the motion constituted an abuse of court docket course of as a result of the events had been already concerned in a separate debt-recovery swimsuit, marked FCT/HC/CV/5599/2024.
The firm additionally contended that the dispute concerned contested details that required a trial commenced by a writ of summons moderately 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 swimsuit, which sought an interpretation of a particular provision within the service settlement.
He held that an originating summons was acceptable as a result of the central challenge involved the development of a written contract.
The choose additionally rejected Eunisell’s argument that the existence of the separate debt-recovery motion rendered Halkin’s swimsuit an abuse of court docket course of.
In one other facet of the judgment, Justice Belgore dismissed an utility by Eunisell difficult the accuracy of the court docket’s report of proceedings on May 18, 2026.
The firm had alleged that the court docket failed to contemplate its opposition to Halkin’s utility to amend its originating summons and incorrectly recorded its counsel as having no objection.
The choose, nonetheless, recalled that Eunisell’s counsel, PL Osakwe, had initially expressed opposition to the modification however subsequently knowledgeable the court docket that he was not objecting after the choose sought clarification on the grounds for his opposition.
According to Justice Belgore, the court docket had defined that the problems raised within the preliminary objection might be addressed after the modification was granted.
He maintained that the report precisely mirrored counsel’s eventual place and faulted the corporate for failing to observe the prescribed process for difficult a court docket report.
Relying on the Supreme Court’s resolution in Andrew v. INEC, the choose held {that a} social gathering searching for to problem a court docket’s report should first file an affidavit disputing its accuracy and subsequently deliver a proper utility, supported by a separate affidavit, searching for an order to amend it.
The choose 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 choose made no order as to prices within the substantive swimsuit.
