Ivory Paper Mills Ltd V. Bureau Veritas, B.v. (2002)

LawGlobal-Hub Lead Judgment Report

PIUS OLAYIWOLA ADEREMI, J.C.A. 

The appellants who were the plaintiffs in the court below (Federal High Court sitting at Lagos) coram Ukeje J. (as she then was) claimed against the respondents as defendants in that court as follows:-

“The sum of N1.8 Million for specific and general damages for negligence and/or breach of duty implied or expressed and/or breach of contract occasioned by the delay in issuing a Clean Report of Findings on the 14th day of November, 1986 (after having certified and inspected the goods on 3rd October, 1986) on cargo of 500 tons of caustic soda pearls from Hamburg on board the vessel MV “William Shakespeare” on Liner Bill of Lading No. 42 dated 3rd October, 1986, thereby making it impossible for the plaintiff to pay its exporter at the official Central Bank of Nigeria rate prevailing on 26th September, 1986″.

Both parties, with the leave of the court, amended their respective pleadings. The final amended pleadings on which the case was fought and defended are the amended statement of claim dated 13th February, 1995 and the amended statement of defence dated 21st December, 1993 and filed on 7th January, 1994.

Both parties called witnesses to prove the averments in their respective pleadings. At the conclusion of the trial and after taking the addresses of counsel, in a reserved judgment delivered on 29th May, 1996, the learned trial judge, in dismissing the plaintiff’s claim in toto, has reasoned thus:

“The law applicable to this suit is the Pre-Shipment Inspection of Imports Act (Cap 363 LFN, hereafter in this ruling referred to simply as “the Pre-shipment Act) I shall, therefore examine the rights and liabilities of the parties herein in the light of that enactment ….

In his evidence-in-chief and under cross-examination, P/W1, Ashok Kumai, a Director of Tan West, the Exporters of the goods herein, in a nutshell, testified that upon the defendants accepting thereafter for the sale of the goods herein the plaintiff was required to establish a confirmed Letter of Credit. The plaintiffs were unable to open a letter of Credit and the Exporter and Importer unilaterally between themselves changed the mode of payment from Letter of Credit to Bills for Collection, such that at the end, no letter of Credit was sent by the plaintiff or received by the Exporter.

Similarly, the evidence of P/W2, Stephen Stravrou, employee of the plaintiff company, testified under Examination-in-chief, cross-examination and re-examination that on account of their inability to secure a Letter of Credit, that Bills for Collection or Open Account was the only choice open to us”. That because of our personal guarantee to pay, there was no need for Letter of Credit.

It therefore becomes clear that no Letter of Credit was opened and so none was sent to the Exporters to the inspecting agent vide EXH GIO on which was written-Term of Payment changed to cash against documents, so no Letter of Credit is available for same………..

It is beyond controversy therefore, that no Letter of Credit was forwarded to the defendants by the plaintiffs and their agents.

…………………

Upon the preponderance of evidence before this court, both oral and documentary exhibits, it is beyond controversy that:-

(1) No Letter of Credit in terms of the Form M was forwarded by the Overseas Exporter to the Inspecting Agent, the defendant herein, prior to the inspection of the goods and the shipment of the goods.

In Ex G9 dated 10/10/86, the defendant inter alia wrote to the plaintiff’s Overseas Exporter-