Union Bank of Nigeria Plc V. Integrated Timber & Plywood Produces Limited (2000)

LawGlobal-Hub Lead Judgment Report

BA’ABA, J.C.A.

This is an appeal against the decision of Abutu, J. of the Federal High Court, sitting at Benin delivered on the 7th day of July, 1997, refusing or dismissing the application brought by the appellant to strike out the respondent’s suit on the ground that the Honourable Court lacked jurisdiction.

The respondent’s claims in the statement of claim dated 17/2/97, filed on 18/2/97 at page 15 of the record reads;

“Wherefore the plaintiff claim against the defendant are as follows:

572. a) Special damages of DM 28,572.70 being the value of the Iroko furniture component exported to Belgium under LC No. K16167/65626 or the Naira equivalent of N1,478,279.80.
573. b) Loss of earnings on investment of DM 28,527.70 at the rate of 15% per annum at the commercial bank savings rate interest of 15% per annum for the period 1st January, 1991 to the day of judgment.
574. c) N60,000.00 as general damage for negligence”.

In the statement of claim the respondent in paragraphs 1, 2, 3, 4, 5, 6, 7, 8 and 9 averred as follows:-

“1. The plaintiff is a company registered under the laws of the Federal Republic of Nigeria which carries on the business of processing Timber and Plywood of various kinds for export and local use. The plaintiff has its registered office in Warri, Delta State of Nigeria.

2. The defendant is a Public Limited Liability Company incorporated under the laws of the Federal Republic of Nigeria to carry on banking business and in furtherance of its business operations opened and runs various branches in different parts of Nigeria, including Warri.
3. As part of defendant’s business structure, defendant has International Banking Department, Export Unit, which renders professional banking advice and export banking services to members of the business public on letters of credit, Export on foreign trade and allied matters on commission basis.
4. Sometime in 1990, the plaintiff received through its bankers, the New Nigeria Bank Plc, a telex of an Irrevocable Documentary Letter of Credit No. 16167/65626 from the defendant which said letter of credit has as its applicant, C.I.E Dubois-Stockmanns of Belgium, the plaintiff as the beneficiary and Krediet Bank N. V. of Belgium as the foreign bank which purportedly issued same. The plaintiff shall found on a copy of the said telex letter for its full terms and effects.
5. By a letter Reference IDC0090/90 dated 12/10/90 addressed to the plaintiff’s said bankers, and a copy to the plaintiff, the defendant advised on and confirmed the authenticity of the telex establishing the letter of credit and requested for the sum of N25.00 as advising commission. The plaintiff upon receipt of a copy of defendant’s letter paid the commission of N25.00 to the defendant with a NNB Limited draft No. 602092 of 19/11/90 and acted on the defendant’s advice and confirmation by exporting Iroko furniture components to C.I.E. Dubois Stockmanns in Belgium between the 30th November, 1990 and 30th December, 1990 (both days inclusive). The plaintiff shall found on NNB letter of 14/11/90, plaintiff’s letter of 21/11/90 addressed to the NNB Limited, Warri, plaintiff’s invoices No. 007, 008 and 009 for the export in the value of DM 28,527.70 delivered to the defendant.
6. By the terms of the letter of credit, the plaintiff’s drafts for the value of the goods were to be paid on presentation of the relevant shipping documents to the defendant which the plaintiff duly submitted to the defendant and up till now the plaintiff has received no draft or payment for the value of the goods exported under the said letter of credit.
7. At the time the defendant forwarded to the plaintiff the said letter of credit and the letter of confirmation dated 12/10/90, the defendant intended and it well knew or ought to have known that the plaintiff would rely on them and would be induced thereby to export its goods upon the terms contained therein. In the premises, the defendant was under a duty to take care in the making of the said representation to the plaintiff so as not to cause plaintiff any financial loss or damage.
8. Acting on the faith of the defendant’s representations and induced thereby, the plaintiff exported Iroko furniture components in the value of DM 28,527.70 to C.I.E. Dubious Stockmanns in Belgium and for which no payment has been received.
9. In breach of the said duty, the defendant was guilty of negligence in making the said representations”.

By a motion dated 24/3/97, filed on 24/3/97, the appellant as the defendant sought for an order of the Honourable Court, dismissing and or striking out the suit on the grounds that it lacks jurisdiction to entertain the suit. The motion was supported by a seven paragraphs affidavit, deposed to by one J. O. Muwhen, a legal practitioner of No. 78, Warri/Sapele Road, Warri. Paragraphs 1-6 of the supporting affidavit reads as follows:

“1. That I am a legal practitioner in the firm of E.L. Akpofure & Co. Counsel to the defendant/applicant by virtue of which I am conversant with the facts of this case.

2. That the plaintiff/respondent filed this suit on the 9th day of October, 1996. Herein attached and marked Exhibit “A” is the plaintiff/respondent’s claim.
3. That I know as a fact that by virtue of Exhibit “A” i.e. plaintiff/respondent’s statement of claim, this Honourable Court lacks jurisdiction to entertain this suit.
4. That such claim as per Exhibit “A” does not fall within the purview of this Honourable Court’s power to determine.
5. That this Honourable Court should dismiss and or strike out this suit.
6. That the plaintiff/respondent will not be prejudiced”.

No counter-affidavit was filed in opposition to the motion. After argument by both Counsel, the learned trial Judge in his ruling on 7th July, 1997 held,

“In the result, I hold that the suit is one within the admiralty jurisdiction of this Court. The Court therefore has jurisdiction to entertain the suit. The objection is overruled and the motion is hereby dismissed”.

Being dissatisfied with the ruling the appellant filed his notice and grounds of appeal on 11/7/97 containing one ground of appeal and with the leave of this Honourable Court, filed one additional ground of appeal incorporated in his brief of argument. From his two grounds of appeal, the appellant formulated two issues for the determination of this Court as follows:

“1. Whether the learned trial Judge was right in law when he held that he had jurisdiction to entertain this suit by virtue of section 1(1)(h) of the Admirably Jurisdiction Decree No. 59 of 1991.

2. Whether the learned trial Judge was right in law when he held that S.230(1)(d) of the 1979 Constitution as amended by Decree 107 of 1993 does not apply to the suit because the transaction is not one between a bank and its customer”.

The respondent in the respondent’s brief formulated one issue for the determination of this Honourable Court which reads,

“1. Whether the learned trial Judge was wrong in holding that he had jurisdiction to entertain the claim of the plaintiff?”.