Artra Industries Nigeria Limited V. The Nigerian Bank For Commerce And Industry (1998)

LAWGLOBAL HUB Lead Judgment Report

ONU, J.S.C.

This is an appeal against the decision of the Court of Appeal, Jos Division (Coram: Oguntade. Edozie and Muntaka Coomassie, JJCA) sitting in Jos which on 11th November, 1996 allowed the appeal of the defendant (herein respondent) and dismissed plaintiffs case in an action founded in contract involving foreign exchange transaction entered into between the plaintiff (herein appellant) and the defendant. The Court of appeal (hereinafter referred to as the court below) in addition, allowed the defendant’s cross-appeal thus culminating in the judgment of the trial Federal High Court in Suit No. FHC/J/10/93 appealed against being set aside in its entirety.

Briefly stated, the appeal herein began like this:-

The plaintiff was granted a loan by the defendant to finance a project for the production of medicated cotton wool and bandages in Bukuru near Jos. Plateau State of Nigeria. Unhappy about the losses it has sustained and allegedly caused by the defendant in the draw-down of the loan and the execution of the project, the plaintiff filed the action hereinbefore referred to which led to the filing and exchange by the parties of pleadings with subsequent amendments thereto. In its Amended Statement of Claim, the reliefs sought by the plaintiff in paragraphs 28 and 29 thereof against the defendant ran thus:

“28. Whereof the plaintiff claims against the defendant as follows:

(i) A Declaration that by virtue of the provisions of Part III of the Companies Decree No.51 of 1968 the defendant is bound by the Investment and Mortgage Agreement dated 12/4/88 and made between the plaintiff and the defendant that the defendant cannot vary the amount secured by the said Agreement.

(ii) A Declaration that the defendant’s letter Ref. No. LEG 72/Vol. 1 dated 14/1/94 and addressed to the Managing Director of the plaintiff violates the terms of the Investment and Mortgage Agreement aforesaid as they relate to the repayment of the amount secured thereunder.

(iii) A Declaration that since the difference in the exchange rate at which the loan was disbursed to the plaintiff was occasioned as a result of the defendant’s negligence, the plaintiff cannot be held liable for the payment of same.

(iv) The sum of Fourteen Million lour hundred and eighty thousand naira only (sic) being special and general damages suffered by the plaintiff as a result of the defendant’s refusal to grant consent to the plaintiff to obtain the working capital granted by Savannah Bank of Nigeria PLC.

PARTICULARS OF DAMAGES

1. SPECIAL DAMAGES.

(a) Loss of anticipated turn-over/earnings per month on the utilization of the working capital beginning from 1/8/93 to 31/3/94 N10,080,000.00

(b) Difference between the cost price of raw materials, equipment spare pans as at April, 1993 and January, 1994………………. N1,000,000.00

(c) The equivalent 14,530 U.S. Dollars still held by the defendant being balance of the undisbursed term loan as per defendant’s letter 31/5/90 N121,000.00

Subtotal N11,201,000.00