Bps Construction & Engineering Company Limited V. Federal Capital Development Authority (2017)

LAWGLOBAL HUB Lead Judgment Report

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C.

This is an appeal against the judgment of the Court of Appeal, Abuja Division delivered on 3rd June 2011 dismissing the appellants appeal and allowing the respondents cross-appeal against the judgment of the High Court of the Federal Capital Territory (hereafter referred to as the FCT) delivered on 29th June 2010.

The facts that gave rise to this appeal are as follows: The appellant, a company registered in Nigeria, carries on the business civil, mechanical and electrical engineering and construction work. The respondent is the statutory body responsible for the orderly development and administration of the FCT. The appellant approached the respondent with a proposal for the provision of infrastructural facilities at Mabushi and Katampe Districts of the FCT. At a meeting held on 6th July 2004 between the parties, the appellants proposal was approved. A memorandum of understanding (MOU) was drawn up and signed by the parties on 13th July 2004 (Exhibit P5). The MOU was subject to the signing of a formal agreement by the parties. By the

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agreement, the appellant, as infrastructural developer, would raise funds for the project. It would recoup its costs from the collection of development levies payable by allottees of plots and from the sale of vacant plots in the two districts. By the terms of the MOU, the respondent was to provide the appellant with the engineering design, drawings and Bill Of Quantities (BOQ) and any other documents that would enable the appellant complete its cost analysis of the project. The MOU also provided that within 14 days of its execution, the parties shall enter into a formal agreement on terms to be mutually agreed between the parties. It was also agreed that all documents, materials, discussions, etc would be treated with the utmost confidentiality and neither party to the MOU shall disclose any information to a third party.

In compliance with the MOU, the respondent submitted the required documents to the appellant. The appellant in return, submitted its Infrastructural Development Agreement to the respondent for execution, as well as evidence of its financial capacity to execute the contract. However, notwithstanding repeated reminders, the respondent

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refused to sign the agreement. Meanwhile, the appellant had proceeded to incur costs in terms of manpower and resources in the execution of the project based on “reliance on the promises, assurances and representations of the respondent that a formal agreement will be executed in line with the MOU. As a result of the respondent’s failure to sign the formal agreement, the appellant instituted an action before the trial High Court vide a writ of summons and statement of claim dated 20/1/2009 and filed on 21/1/2009 seeking the following reliefs:

“(a) A DECLARATION that in compliance with the terms of the said MOU of 13th July, 2004 executed by the parties, the defendant is duty bound to enter into a formal agreement with the Plaintiff for the provision of infrastructural facilities in Mabushi and Katampe Districts of the Federal Capital Territory, Abuja.

(b) AN ORDER for the defendant to execute forthwith or within such a time as may be stipulated by this Honourable Court, a formal agreement with the Plaintiff in respect of the said project.

(c) AN ORDER for the Defendant to deliver and finally assign all that parcel of land lying within

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Mabushi and Katampe Districts of the Federal Capital Territory, Abuja to the plaintiff for the purpose of providing the said infrastructural facilities.

(d) AN ORDER for the defendant to pay the sum of N3,875,284,858.29 being the cumulative monetary value of the efforts, services and work-input which the plaintiff has already committed to the said project pursuant to the MOU, subsequent assurances and representations of the defendant from 2004 – 2008.