A.g. Ferrero & Company Ltd. V. Henkel Chemicals Nigeria Ltd (2011)

LAWGLOBAL HUB Lead Judgment Report

F. TABAI, J.S.C.

The Plaintiff was the Respondent at the Court below and the Appellant herein. The Defendant was the Appellant at the Court below and the Respondent herein. They would, in this judgment be simply referred to as the Appellant and the Respondent respectively.

Sometime in the year 1987, the parties entered into a contract under which the Appellant was to construct for the Respondent a Soap and Detergent factory as well as office Building at the Kudenda Industrial Layout, Kaduna at the contract sum of N3,854,938.10 (Three Million, Eight Hundred and Fifty Four Thousand Nine Hundred and Thirty Eight Naira, Ten Kobo). It was part of the agreement that the Respondent would pay to the Appellant such part of the contract sum raised in a certificate of payment issued by Architects appointed by the Respondent. It was also part of the agreement that the sum stated in any certificate of payment fell due and payable within 21 days of the issuance of the certificate. The sum which became due for payment under the Respondent’s Architects Certificate No. 18 dated 07/12/1989 was N449,474.45. The Respondent however failed to pay the aforesaid sum as agreed despite demands by the Appellant.

In reaction, the Appellant took out a summons, claiming in paragraph 13 of its Amended Statement of Claim the following relief:

(a) The Plaintiff claims against the Defendant the sum of N449,474.45 (Four Hundred and Forty Nine Thousand, Four Hundred and Seventy Four Naira, Forty Five Kobo) only being the sum outstanding against the Defendant in favour of the Plaintiff on evaluation Certificate No. 18 issued by the Defendant’s Architects on the 7th December, 1989;

(b) Interest on the outstanding sum herein above at the minimum rate of 25% per annum from the date of the default by the Defendant to effect payment according to contract i.e. from 29th day of December, 1989 till judgment in this suit;

(c) Interest at the rate of 10% per annum on the date of judgment until the judgment debt from the date of judgment until the judgment is fully and finally settled by the Defendant.

The Respondent as Defendant filed its Statement of Defence and Counter-Claim. Only one witness testified for the plaintiff’s case. There was no evidence for the defence. In part of the judgment, the learned trial Judge at page 149 of the record spoke of consequential damages as follows:

“The 4th consideration is as it relates to consequential damages. It is my considered opinion that the non-payment of the amounts due since 1989 has resulted in the loss of savings and profits that might have flowed therefrom. This fact I believe is reason enough for the Plaintiff to seek for interest on the said debt in default as consequential damages.”

In the concluding paragraphs of the said judgment, the learned trial Judge granted three reliefs the first two of which run as follows:

“(i) The Defendant Henkel Chemicals Limited shall pay the Plaintiff A. G. Ferrero & Co. Limited the sum of N449,474.45k (Four Hundred and Forty Nine Thousand, Four Hundred and Seventy Four Naira, Forty Five Kobo) only being the sum outstanding against the Defendant in favour of the plaintiff on valuation Certificate No. 18 issued by the Defendant’s Architects on 7th December, 1999.

“2 Interest is awarded the Plaintiff against the Defendant on the outstanding sum here above at the rate of 25% per annum from December 29th, 1989 to today 16/06/2000.”

The Respondent was aggrieved by the said judgment and thus preceded an appeal to the Court below. In its judgment on the 20th of June, 2002, the appeal was allowed. The Court at page 255 of the record concluded:

“The appeal therefore succeeds and it is allowed. The award of pre-judgment interest of 25% on the judgment debt of N449,474.45 from 29th December, 1989 to the date of judgment which is 16th June, 2000 is without merit and is set aside.”