Mazi Anthony Sunday O. Nwangwu V. First Bank of Nigeria Plc (2008)

LawGlobal-Hub Lead Judgment Report

SIDI DAUDA BAGE, J. C. A.

This is an appeal against the Judgment of the Enugu High Court presided by AHANONU, J of the Enugu State Judiciary. The said Judgment was delivered on the 30th October 2006 against the defendant.

The Plaintiff, who is the appellant herein had before the trial court per his amended statement of claim dated the 28th September 2004, claim against the defendants as follows:-

(a) The sum of N6, 480,056.47 (Six million, four hundred and eighty thousand and fifty six Naira forty-seven Kobo) being the value as at 31/12/2001 the excess deposit of N1,318.00 paid by the plaintiff in 1982 still retained by the defendant;

(b) The sum of N6,736,616.01 (six million seven hundred and thirty-six thousand six hundred and sixteen Naira ninety-one Kobo), being special damages for loss of profits suffered by the plaintiff from 1984 to 2001;

(c) Interest on the aforesaid sums of N6,480,056.47 and N6,736,616.91 at the rate of 25% per annum with effect from 1/1/2002 until the date of Judgment and thereafter at the rate of 5% per annum until the final liquidation;

(d) The sum of N50 million (Fifty million Naira) as general damages on the footing of exemplary or aggravated damages, for negligence and breach of contract.

The gist of this case is that the Appellant who was the Plaintiff at the trial court, was the sole agent of Horii & Co. Ltd, Tokyo. In August, 1982, he instructed the Defendant, his bankers then, (1st Bank of Nigeria Plc) in their Enugu Main Branch at Okpara Avenue, Enugu, under account No. 64440, to open irrevocable confirmed documentary credit (L/C) for importation of Horii duplicating machine accessories from Horii & Co. Ltd. Tokyo, Japan. He paid N6,063.00 by cheque to cover the defendant’s charges and commissions and 125% of the value of the goods shown in the proforma invoice as Yl,839, 000.00 or N4,745.00 whereby the defendant undertook to pay the Japanese supplier through chartered Bank of Tokyo upon presentation of the shipping documents for the goods to chartered Bank.

The Appellant (Plaintiff before the trial court) on 9/8/82 completed Exchange Control Form “M” which the Respondent (Defendants before the trial court) signed and stamped on the 11/8/82. Form M is the application to Central Bank of Nigeria (CBN) to purchase foreign currency valued Y1,807,200.00 or N4,845.97 for importation of the machines. The seller of the machines fully complied with the terms. of the L/C informed the Respondent accordingly and demanded payment. The Respondent failed to pay contrary to its undertaking in the L/C, despite repeated demand letters by the Appellant. The Respondent’s replies were that it was waiting for CRN to release foreign exchange (forex) and that its file on the matter was missing. The Appellant was constrained to write to CBN, but no response was received. He then consulted a lawyer who wrote letters to CBN, and received replies that the defendant informed him that the L/C had been settled contrary to the Respondents letter.

The Appellant said following non-payment by Respondent, the supplier decided to cut off further supplies to him, after shipment of the goods the subject matter of the L/C for which the supplier was not paid. Appellant stated that he had invested N8,010.00 and made of profit of N7,384.84. If his business had not been interrupted by the Respondents failure to pay the seller on the L/C, he would have made a profit of N6.7 million between 1983 and 2001.

Appellant also said that the 25% (N1,318.00) excess deposit made by him in 1982 had not been refunded to him. Its value as at 2001 was N6.4 million. He engaged a chartered accountant who professionally made calculations and arrived at the aforesaid figures.

The trial Judge in his Judgment upheld the contention of the defendant that registration of Form M by the Plaintiff meant that payment of the supplier was subject to prior release of foreign currency by CBN, He went as far as saying that the commercial instrument known as irrevocable documentary credit (L/C) was not applicable to third world countries, like Nigeria, but should concern free trade environment. Accordingly, the defendant was held not liable for failure to settle the L/C, notwithstanding the clear terms of the instrument. The trial judge took upon himself the task of questioning the use of the dollar as benchmark in the accountant’s report, which the defendant did not challenge.

Pleadings were order, filed and exchanged Hearing commenced in earnest with parties calling witnesses and tendering documentary evidence. The plaintiff called two witnesses, while the defendant called one witness.

The Learned Trial Judge in a reserved Judgment delivered on 30th October 2006 dismissed the Plaintiff/Appellant claims, save for relief No. 1 (1) for which the Appellant was awarded refund of his excess deposit of N1,318 with interest at 19.5% per annum from 1982 till date of Judgment and 5% per annum thereafter with cost of N10, 000.00 Aggrieved and dissatisfied with the decision of the lower Court, the Appellant Appealed to this Court.