Court of Appeal upholds appeal in the case between Afriexim vs Patnasonic relating to a USD 25million facility dispute

The Court of Appeal has, in a judgment delivered on July 8, 2026, allowed the Appeal in the case of African Export-Import Bank (“AFREXIM”) v Patnasonic in a dispute over the repayment of a USD 25,000,000 (Twenty-Five Million United States Dollars) facility.

The dispute arose from a receivables-backed dollar facility of up to USD 25,000,000 (Twenty-Five Million United States Dollars) granted by AFREXIM to Patnasonic Industries Limited under a Loan Agreement in 2012, with Sterling Bank Plc as local administration agent. Following AFREXIM’s demands that Patnasonic repay the outstanding debt in US Dollars rather than Naira, Patnasonic and its Chairman, Chief Patrick Chidolue, sued at the High Court of Lagos State, which, on June 25, 2024, found in their favour and dismissed AFREXIM’s preliminary objections. AFREXIM appealed, and Sterling Bank filed a related appeal of its own.

In a well-considered judgment, the Court of Appeal agreed with the submissions of Lead Counsel for AFREXIM, Onyemauche Ibezim of KENNA, who argued the appeal and resolved all six issues in AFREXIM’s favour. The Court in resolving the issues on jurisdiction held that the parties were bound by their freely negotiated agreement conferring jurisdiction on the English courts; that AFREXIM enjoyed diplomatic immunity as an international financial institution; and that the initial suit filed by Patnasonic was statute-barred.

For completeness, the Court further pronounced on the substantive issues and held that the facility remained a US Dollar obligation repayable in full in Dollars at the exchange rate prevailing at the date of repayment; that AFREXIM’s demand for repayment was a legitimate exercise of its contractual rights; and that English law, as expressly chosen by the parties, governed the Facility Agreement.

In the related Sterling Bank appeal, the Court also held that the suit was statute-barred and that the trial court had erred in finding the Facility Agreement was tainted by illegality, an issue it had raised on its own initiative. The Court affirmed that the Facility Agreement was valid and enforceable, allowed both appeals, and awarded costs against Patnasonic and Chief Chidolue.

This decision reaffirms the principle that parties are bound by the governing law and dispute resolution clauses in their agreement and relieves AFREXIM of an adverse judgment over a facility of USD 25,000,000.

As the foremost pan-African multilateral trade finance institution, AFREXIM plays a pivotal role in facilitating cross-border trade and investment across the continent. The Court of Appeal’s affirmation of foreign jurisdiction clauses and the enforceability of dollar-denominated obligations bolsters confidence in African markets and strengthens the legal framework that underpins foreign direct investment and cross-border lending in Nigeria and across Africa.

Chuks Nwachukwu represented the 1st and 2nd Respondents (Patnasonic Industries Limited and Chief Patrick Chidolue).