Arisons Trading & Eng. Co. Ltd V. The Military Governor Of Ogun State & 2 Ors (2009)

LAWGLOBAL HUB Lead Judgment Report

T. MUHAMMAD, J.S.C.

The version of the appellant herein, as plaintiff at the Ogun State High Court of Justice, holden at Abeokuta (trial court), is that the plaintiff was a limited liability Company carrying on business, inter alia, as Building and Civil Engineering Contractors based in Abeokuta. In 1981, the plaintiff tendered for and was awarded contract by the defendants, who are respondents, herein, for the construction of 25 kilometers road between Obafemi/Owode Local Government Area of Ogun State. The contract sum was N8,000.00 (Eight Million Naira). The plaintiff was put into possession of the Owode/Obafemi road site by the defendants and work commenced on the said project. The defendants agreed to pay mobilization fees of N1,600,000.00 (One Million, Six Hundred Thousand Naira). Contrary to the terms of the agreement, the mobilization fees were never paid by the defendants. The plaintiff claimed that it suffered damages due to the failure of the defendants to pay the mobilization fees as it had sought and obtained bridging loan in anticipation of the said fees. Subsequently, the defendants made installmental payments periodically, towards settling the mobilization fees. A total sum of N1,975,000.00 was paid. The plaintiff signed an agreement with Messrs YURSEL INSAAT ANONIH SIRUETT of TURSEY which made 40% claim of the project thereof. The plaintiff committed large sums of money to mobilize plants, equipment and machinery. The plaintiff also employed several workers (skilled and unskilled) and qualified engineers both locally and from abroad. The plaintiff commenced work on the Owode/Siwun section when in 1982, the company was directed to shift to Siwun/Obafemi section. The plaintiff incurred some losses in the movement of machines, equipment, plants and site office.

Between 1981 and 1983, a total of eight (8) interim certificates were issued. Three were signed by the Consulting Engineers while five were signed by Ogun State Resident Engineer. The value of each certificate was indicated therein.

When the Military took over in 1983, all contracts, including the project, were suspended by the defendants. A special investigation panel was constituted in 1984 to review and investigate all contracts awarded by the Ogun State Government. During the time, work was suspended by the defendants, all the machines and equipment of the plaintiff were idle, that is from January, 1984 to June, 1986, and the plaintiff incurred substantial losses of revenue it would have earned for hiring out the machines and equipment.

In June 1986, work by the plaintiff again resumed. In August, 1986, dispute again arose in respect of the amount to be paid on work done. The plaintiff had to stop work to clarify the dispute which was clarified in June, 1987. However, the defendants, through a letter dated 30th March, 1988, terminated the contract between them and the plaintiff. Consequent upon the termination of the Contract between the plaintiff and the defendants, the former took out a Writ of Summons from the trial court. In paragraph 48 of its further amended statement of claim, the plaintiff prayed for the following reliefs:

“48 WHEREOF the plaintiff claim(s) as follows:

DECLARATION that defendant’s letter No. 363/307 of 30th March, 1988 purporting to revoke the contract agreement between the plaintiff and the defendants in respect of Owode Road Project is wrongful, improper, null and void.

ORDER for payment of damages for breach of contract are as follows:

(i) Expenses incurred on staff maintenance, Salaries – N305,826.00

(ii) Charges on plants and machineries from January, 1984 to June, 1986 and from August, 1986 – June, 1987 at daily rate as follows:

Bulldozer – N4, 000.00

2 Motor builders at

N2,000.00 each- N4,000.00

Loader – N1, 000.00