A PLC. V. Uba PLC. In the Court of Appeal of Nigeria (2006)

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RHODES-VIVOUR, J.C.A.

This is an appeal from the decision of the High Court of the Federal Capital Territory, Abuja Coram: Kusheriki J. in the ruling in Suit No. FCT/HC/CV/130/02 delivered on the 12th of November, 2002.

The facts of this case are rather straight forward. The appellant awarded a contract to Elecktrint Nig. Ltd. (hereinafter called the contractor). The contractor was to do some work on the appellant’s office in Abuja. The appellant demanded from the contractor:

(a) An advance payment guarantee, and

(b) A performance bond.

The respondent produced both, dated 27/9/01 and 1/12/2000 respectively, and entered into a collateral contract with the appellant on behalf of the contractor; its customer to pay on first demand to the appellant the sums stated therein in the unlikely event the contractor failed to carry out the contract. There was disagreement between the contractor and the appellant, and so the contractor filed suit no.LD/284512001 at the Lagos High Court. He sued the respondent as 1st defendant and the appellant as 2nd defendant. The contractor’s claims are as follows:

“i. A declaration that the 1st defendant is not liable to make any payment to the 2nd defendant under, pursuant to, or by virtue of the advance payment guarantee dated 27/9/2001 and or the performance bond dated 1/12/2000.

ii. A declaration that the letter of demand dated 15th of November issued by the 2nd defendant to the 1st defendant is fraudulent, defective and invalid consequently null and void.

iii. A declaration that the plaintiff not having received an advance payment subsequent to the issuance of the advance payment guarantee on the 27th of September 2001 is not liable to indemnify the 1st defendant against any sum of money paid or to be paid by the 1st defendant to the 2nd defendant under, pursuant to, or by virtue of the said advance payment guarantee.

iv. An order of injunction restraining the 1st defendant (UBA Plc.) from making any payment to the 2nd defendant (Dumez) pursuant to, under or by virtue of the advance payment guarantee dated the 27th September 2001 and or the performance bond dated the 1st of December 2000.

v. An order of injunction restraining the 1st defendant from debiting the plaintiff’s bank account held at any of the 1st defendant’s branch office or making any claim against the plaintiff, for any sum of money paid or to be paid by the 1st defendant under, pursuant to, or by virtue of the advance payment guarantee entered into between the 1st and 2nd defendants dated 27th September, 2001 and the performance bond dated 1st of December, 2000.

vi. An order of injunction restraining the 2nd defendant from receiving any payment from the 1st defendant pursuant to, under or by virtue of the advance payment guarantee entered into between the 1st and 2nd defendants dated 27th of September 2001 and the performance bond dated 1st December, 2000.

vii. A sum of N3,000,000.00 (three million naira) damages against the 2nd defendant for wrongful termination of the contract between the plaintiff and the 2nd defendant dated 22nd of November, 2000.”

This action was subsequently discontinued against the appellant (the 2nd defendant) and its name was struck out. The appellant then filed suit no.FCT/HC/CV/130/02 in Abuja. It sued only the respondent.