B. L. Lizard Shipping Company Limited V. Mv “Western Star” & Ors (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

U.I. NDUKWE-ANYANWU, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the Ruling of the Federal High Court, Lagos delivered on 9th day of June, 2010 which ordered that the value of the funds collected under the Bank Guarantee, be paid in to the court, in the care of the chief Registrar who will in turn pay same into an interest yielding account

In a nutshell, the fact of this case is that the Appellant, as Plaintiff, claimed against the Defendant/Respondent the following:

1. The sum of US$127,650 being the outstanding cost for the bunked supplied to the 1st Defendant by the Plaintiff;
2. Interest on the above sum at the rate of 2% per month from the 2nd of March, 2006 till judgment and thereafter at the rate of 10% per annum until the judgment debt, interests and costs are fully liquidated;
3. US$30,000 being the legal costs incurred by the Plaintiff in respect of this matter; and
4. A declaration that the beneficial ownership of the 1st Defendant vested in the 2nd Defendant, Eastern Star Shipping Company Limited.

The 1st Respondent was released from arrest by an order of court. The

said release of 1st Respondent was upon the Provision of a Bank Guarantee by the Respondents. The letter of undertaking contained, inter alia, this proviso.

“Any claim by the plaintiff on the Bank under this guarantee may only be made once a final judgment after appeals if any has been rendered by the Federal High court of Nigeria or any other higher court to which appeals may lie and shall be supported by a Certified True Copy of the Court Judgment or Order or, in case an agreement in writing is reached between the parties, an original version of the agreement, duly signed by both parties authorized representatives”

Pleadings were ordered and the matter proceeded to trial and judgment delivered on 3rd day of June, 2008. The Appellant thereafter on 27 June, 2008 applied and collected the Eco Bank Guarantee on 21, June, 2008 worth US$151,650. Unhappy with the turn of events, the Respondents filed a motion praying, inter alia, for the return of the money. In its considered Ruling, the trial Judge ordered the amount to be paid into the court, pending the determination of the appeal already filed.

The Appellant was dissatisfied with the said Ruling and thereafter filed its notice with three grounds of appeal. An Appellant’s brief was filed on 28 June, 2011 but deemed properly filed and served on 29th day of September, 2011. In it, the Appellant articulated three issues for determination. They are namely:-

“1. Whether it was open to the Respondents to challenge the Appellant’s right to reap the fruit of its judgment in the absence of any application for stay of execution of the judgment.

2. Whether the Respondents can validly prevent and/or challenge the enforcement of the terms of the Bank Guarantee.
3. Whether having regard to the facts of this case, the order directing the Appellant to pay the value of the fund under the Bank Guarantee into Court, being an order not sought by the Respondent was justifiably made.”

In response, the Respondent filed their brief on 21st day of October, 2013 but deemed properly filed on 18 June, 2014. The Respondents adopted the three issues articulated by the Appellant for determination.

ISSUE 1

The learned counsel to the Appellant submitted that the Respondent had sought for the return of the judgment sum paid to the Appellant. This order, counsel argued, acts as a stay of execution and denies the Appellant of the fruits of the judgment. See Osho vs. A.G. Ekiti State (2002) 2 NWLR Pt.752 Pg.628.

Counsel urged the court to resolve this issue in favour of the Appellant.

ISSUE 2