Trade Bank Plc V Benilux (Nig.) Ltd (2003)

LAWGLOBAL HUB Lead Judgment Report

MOHAMMED, J.S.C.

Benilux (Nigeria) Limited, who hereinafter shall be referred to as the respondent, had business transaction with Messrs Accountable Finance and Investment Company. As a result of the business transaction Messrs Accountable Finance and Investment Company Limited, issued cheque No. 03370-031150013 A/C No. 102-3720151-01-95, dated 27th January, 1993, in the sum of N1,000,000.00 (One Million naira) payable to the respondent. The cheque was marked “A/C Payee only” and “Not Negotiable”. It was to be drawn on the account of the company at Martins Street Branch of the Trade Bank PIc. Trade Bank PIc is the appellant, in this appeal. In the cheque the appellant was mandated to pay the sum of N1,000,000.00 to the respondent. Instead of paying the amount to the respondent the appellant paid the one million naira to a stranger.

When the respondent found out what had happened it challenged the appellant on the wrongful payment. The appellant accepted responsibility, but pleaded for time to enable it rectify the situation and make payment properly to the respondent. When the waiting was too long and the payment was not forthcoming the respondent went to the Lagos High Court and filed the following claims:

“(i) A declaration that the defendant acted unlawfully and improperly in paying cheque No. 03370-031150013 “A/C Payee only” “Not Negotiable” drawn on the defendants, by Accountable Finance and Investment Co. Ltd. in favour of the plaintiffs to a person or persons other than the plaintiffs at the defendants’ Martins Street Branch, and otherwise than through a collecting banker acting for the plaintiffs.

(ii) A declaration that the plaintiffs are entitled to be credited with the value of the cheque (i.e. N1,000,000.00) referred to in paragraph 1 hereof on the expiration of 5 working days from the presentation of the same to the defendants on the 28th January, 1993 and that the defendants have wrongfully and improperly deprived the plaintiffs of the use and enjoyment of the said sum of N1,000,000.00 from the 3rd February, 1993.

(iv) An order that the defendants shall pay the plaintiffs the said sum of N1,000,000.00 with interest at 50% per annum from 3rd February, 1993 to 31st December, 1993 and further interest at 15% per annum from 1st January, 1994 until judgment and thereafter at 15% per annum until the judgment shall have been satisfied.”

Soon after the action had been filed, learned counsel for the respondent, Professor Adesanya, SAN, filed and argued an ex-parte motion with the following prayer:-

“An order of interim injunction (Mareva) restraining the defendants, their servants and/or agents from removing from the jurisdiction, disposing of and/or dealing with their assets within the jurisdiction in so far as the same do not exceed the sum of N2,000,000.00 and in particular its bank balance with the Central Bank of Nigeria or their claims thereto until the determination of the Motion on Notice”.

The application was granted. The order was served on the Central Bank which attached the sum of N2 million in the account of the appellant kept with the Central Bank. In response to this order the appellant by way of motion on notice, dated 14/12/94, prayed for striking out the suit for lack of jurisdiction of the trial court. Alternatively, the appellant prayed for the vacation of the Mareva injunction. In a considered ruling, the trial High court Judge held that the State High Court had jurisdiction to hear the suit. Secondly, he declined to vacate the Mareva injunction which he granted earlier.

Dissatisfied with the said ruling, the appellant filed an appeal to the Court of appeal. Before the hearing of the appeal, at the Court of Appeal, the appellant filed a motion and prayed for an order substituting the order granted by the High Court attaching the appellant’s N2,000,000.00 with the Central Bank of Nigeria with a bank guarantee from any reputable bank in Nigeria. The application was granted. The Court of Appeal ordered the appellant to provide a bank guarantee in the sum of N2,000,000.00 from Afribank Plc. The bank guarantee was lodged in Afribank Plc on 26th November, 1996. The Court of appeal thereafter heard the appeal and delivered its judgment on 29th May, 2000. The appeal filed by the appellant was dismissed. It is against the said judgment that the appellant has filed this appeal.

The appellant identified the following two issues for the determination of the appeal:

“(i) Whether the High Court of Lagos State is vested with jurisdiction to hear and determine the plaintiff’s claim and

(ii) Whether the ex-parte order of Mareva injunction ought not to have been discharged in the circumstances.”

The respondent adopts the issues as formulated by the appellant. The only issue pertinent for the determination of this appeal, in my view, is the issue questioning the jurisdiction of Lagos State High Court to decide the suit filed by the respondent. The issue about the ex-parte order of Mareva injunction has been overtaken by events before the hearing of the appeal at the court below. The application to substitute the Mareva injunction with a bank guarantee which the court granted had removed the Mareva injunction from being an issue in dispute between the parties. An issue in dispute is the subject of litigation. It is a matter for which a suit is brought and parties join issues for the determination of the dispute. Courts will only consider a justifiable controversy upon existing state of facts and not upon hypothetical dispute or academic moot. The issue of Mareva injunction is no more pertinent as a dispute between the parties. I therefore strike out issue II being an incompetent issue.