Khatoun Enterprises Limited V. United Nigeria Textiles & Anor (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

OLUDOTUN ADEBOLA ADEFOPE OKOJIE, J.C.A. (Delivering the Leading Judgment)

This is an appeal from the judgment of Kano State High Court presided over by Hon. Justice Dije Abdu Aboki, delivered on the 22nd day of March 2013.

The Appellant, as Plaintiff, by its Writ of Summons, Specially Endorsed, dated 7th July 2008, sued the Respondents (Defendants) jointly and severally for the following:

1. The sum of N89,865,655.20 being the agreed 5% commission/rebates for the Plaintiff purchases from 1999 – 2007 or any part thereof adjudged due (sic).
2. The sum of N3,912,000.00 being the illegal deductions from the Plaintiff’s account as rollers surcharge or any part thereof adjudged due.
3. N90,000,000.00 being general damages for breaches of contract.

The Respondents filed a Joint Statement of Defence and Counterclaimed for the following:

• The sum of N59,391,514.72 being the total outstanding indebtedness to the Defendants for credit sales of textile materials between 04/08/2003 and 04/09/2007.
• The sum of N180,000.00 being outstanding engraving charges on Plaintiff’s designs for September, 2005 and October, 2006.
• N10,000,000.00 damages.

In proof of its claim, the Appellant (plaintiff) called 3 witnesses and tendered several exhibits, while the Respondents (Defendants) called a sole witness and also tendered a number of exhibits.

The case of the Appellants, in summary, per its pleadings and as presented by its witnesses, is that the Appellant is a buyer and distributor of the Respondents’ textiles, the 1st and 2nd Respondents being sister companies. At a meeting called by the Respondents sometime in 1996, it was agreed that the Appellant was to be supplied regularly with textile materials particularly during the peak period, i.e. in the months of October to December and during Sallah and Easter. Also that the Appellant will be given a 5% commission/rebate on sales. It was further agreed that there would be prompt production and supply exclusively of materials, particularly those produced in line with designs made available by the Appellant.

The Appellant accused the Respondents of breach of the agreement, alleging that the 1st Respondent delayed in the supplies, and that supplies made to the Respondent in the peak period were lower than demanded. In addition, that the Appellant was paid only 3% rebate for a period, before its cessation altogether.

It also accused the Respondents of supplying the Appellant’s designs to other customers and that the Respondents, in breach of agreement, exported the same. Further, that the Respondents illegally charged the Appellant for rollers used on their designs, by sending a debit note to them.

The Respondents, in their pleadings and evidence of their witness, denied knowledge of any meeting at which the parties agreed to a rebate/commission of 3%. The 3% given to the Appellant, it was alleged, was performance award. They denied breach of any of the terms of the contract and alleged that it was the Appellant that was indebted to them.

Following conclusion of trial and the consideration of final written addresses filed by both Counsels, the trial Judge, in her Judgment, dismissed the claim of the Appellant for breach of contract. She also dismissed the Appellant’s claim of N3,912,000 for illegal deductions from its account.

She held the 1st Respondent liable for breach of the verbal agreement to pay 5% discount on sales for the period July 2002 to September 2007. She, proceeded to award 3% discount in the sum N16,076,522.78 (Sixteen Million and Seventy Six Thousand Five Hundred and Twenty Two Naira Seventy-Eight Kobo).

The learned Judge granted the Counterclaim of the Respondents, in part, awarding the sum of N180,000, as engraving charges on the Appellant’s designs. She held the Appellant indebted to the Respondents for credit sales of textile materials, however reducing the amount sought. She refused the claim of the Respondents for general damages.

Dissatisfied with this judgment, the Appellant appealed to this court against the Judgment. The Respondent cross Appealed.

In the main appeal, in the Appellant’s Brief of Arguments, settled by Nelson Uzuegbu and Ifeanyi Ogenyi of Nelson Uzuegbu & Co. the following issues for determination were raised: