Eagle Super Pack (Nigeria) Ltd. V. African Continental Bank Plc (2006)

LAWGLOBAL HUB Lead Judgment Report

OGUNTADE, J.S.C.

The dispute out of which this appeal arose was between a bank and its customer. The appellant was the bank and the respondent the customer. At the Orlu High Court of Imo State, the respondent as the plaintiff claimed against the appellant as the defendant the sum of two million naira being special and general damages. The claim was in negligence and alternatively for breach of contract. The parties are hereinafter referred to as plaintiff and defendant in line with their description before the trial court. The dispute arose in this way. The plaintiff wanted to pay its overseas suppliers based in Japan the sum of US $16,180.00 for raw materials to be imported. It approached the defendant, its banker for the issuance of a letter of credit in favour of the Japanese suppliers.

In the month of December, 1986, the plaintiff through the defendant sourced from the second tier foreign exchange market the said sum of US $16,180.00 for which it paid N55,699.65. The plaintiff also paid the defendant the charges and commission demanded to enable the defendant effect the transfer of the money to the plaintiff’s overseas suppliers.

It would appear that the defendant on 12/12/86 issued a letter of credit which was to remain valid till 13/1/87 in favour of the Japanese supplier. This was after the plaintiff had given to the defendant all the documents needed to enable the transfer to be effected. However, the letter of credit for unascertained reasons did not get to the Japanese company. The plaintiff wrote a number of letters to the defendant complaining that the Japanese company had not received the letter of credit. Plaintiff’s solicitors also did the same. The position remained the same. In these circumstances, the plaintiff issued its writ of summons claiming as earlier stated.

The defence of the defendant was that it had merely acted as agent to the plaintiff for the purpose of getting the letter of credit transferred to the Japanese supplier, and that it did all that was required of it as such agent to carry out that duty. It denied being negligent. It pleaded that it was relying on articles 18 and 19 of the Uniform Customs and Practice for Documentary Credit.

The case was tried by Ononuju, J., at the Orlu High Court of Imo State. On 26/11/89, the trial Judge, in his judgment, awarded a total sum of One million, sixty three thousand, five hundred and sixty seven Naira, seventy seven kobo (N1,063,567.77) representing special and general damages in favour of the plaintiff. In coming to this conclusion, the trial Judge took the view that the Uniform Customs Practice for Documentary Credit, (hereinafter referred to as UCP) upon which the defendant had relied, was inapplicable to the case.

The defendant was dissatisfied. It brought an appeal before the Court of Appeal, Port-Harcourt Division (hereinafter referred to as the court below). The court below on 2-6-94 allowed the appeal. It held that UCP applied and relied on some cases for the said conclusion. It ordered that the case be retried de novo. Finally, it ordered the defendant to pay to the plaintiff the sum of US$16, 180.00. Both parties were dissatisfied with the judgment, and have come on a final appeal before this Court.

The defendant in the trial court and appellant before the Court below is the appellant before this court although the brief filed on its behalf by the Chambers of C. O. Akpamgbo, Esq., SAN erroneously described it as the respondent.

In the appellant’s brief, the issues for determination were identified as the following –

(i) Was the Court of Appeal right after holding that the learned trial Judge erred in law by holding that exhibit S’, the Uniform Customs and Practice Documentary Credit (UCP) was inapplicable, allowed the appeal and remitted the case for trial de novo

(ii) Was the Court of Appeal right after holding that exhibit ‘S’ is applicable in Nigeria and in the instant case not to have considered other issues for determination canvassed in the appeal

(iii) Was the Court of Appeal right after allowing the appeal to order a refund of US $16, I80.00 to the respondent on or before 30 days from today

The plaintiff before the Court of trial who was the respondent before the court below is the respondent/cross-appellant before this court. In its brief it formulated three issues from the main appeal and two issues from the cross-appeal. The issues in the main appeal are:

(i) Whether it was right for the lower Court to hold that the Supreme Court’s decisions in A.M.G. Akinsanya v. U.B.A. (1986) 4 NWLR (Pt. 35) 273; Nasaralai Ent. Nig. Ltd. v. Arab Sank (1986) 4 NWLR (Pt. 36) 409 and A.-G., Bendel State v. U.S.A. (1986) 4 NWLR (Pt. 37) 547 are on all fours with these proceedings without any distinction as to the facts and circumstances of the instant appeal and on this basis decide that the UCP Rules were applicable to this transaction.