Linton Industrial Trading Company Nigeria Limited V. Central Bank Of Nigeria & Anor (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

SAMUEL CHUKWUDUMEBI OSEJI, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the judgment of the Federal High Court Lagos Division delivered on 10-2-2000 by R.N. Ukeje CJ in Suit No. FHC/L/CS/469/85 wherein the plaintiff’s claim was dismissed.

The appellant who was the plaintiff before the Federal High Court, Lagos (hereinafter referred to as the lower court) commenced an action claiming against the defendant (now Respondent) as per paragraph 17 of the Amended Statement of Claim dated 20-1-97 as follows:-

A DECLARATION that the Defendant is in breach of Contract having failed to remit the sum of $19,530 (Nineteen thousand, five hundred and thirty U.S. Dollars) to Messrs Linton Industry Company Limited, Hong Kong, being proceeds from 3 lots of C.K.D. Watch components parts despite approval and allocation of foreign exchange by The Central Bank of Nigeria vide CBN FORM M NUMBERS 008436, 008437 and payment of same in Local currency by the Plaintiff.

A DECLARATION that the Plaintiff is entitled to special damages as a result of the Defendant’s failure or neglect to remit the sum of $19,530 (Nineteen Thousand, Five hundred and thirty U.S. Dollars) to Messrs Linton Industrial Company Limited, Hong Kong being amount for the proceeds of 3 lots C.K.D.

Watch Components Parts thereby resulting in cancellation by Linton Industrial Co. Ltd. Hong Kong of the remaining 8 lots of C.K.D. Watch components parts vide Proforma Invoice No. W – 0572 – WO579 which were awaiting shipment then, despite approval and allocation of foreign currency by the Central Bank of Nigeria and payment of same in local currency by the Plaintiff.

(c) The sum of N8,800,000.00 being special damages resulting from the said breach by the Defendant.

(d) Payment of sum of $19,530 (Nineteen Thousand, five hundred and thirty U.S. Dollars) of current autonomous exchange rate being an amount due to the Plaintiff as a result of non-remittance of the said sum of Linton Industrial Company Limited, Hong Kong.

(e) Interest on the said sum at the current bank rate per annum from 1984 until judgment on the said sum as in paragraph 4.

(f) 10% monthly interest after judgment till payment is made.

Briefly, the facts of the case was that the appellant was a long standing customer of the Respondent Bank. Sometime in 1984 it submitted three (form Ms) application for foreign exchange allocation, through the Respondent to the Central Bank of Nigeria. It also paid the sum of N14,655,57k which is the Naira equivalent of the total foreign exchange being sought to the Respondent which in turn kept the sum in a suspense account pending the allocation by the Central Bank.

However the Central Bank accepted the application but did not release the approved sum. This was the position till 1986 when a new foreign exchange guideline was released with the creation of a Second Tier Foreign Exchange Market. Based on the aforementioned, the appellant’s application earlier approved was rejected by the Central Bank on the ground that the items imported by the appellant was not subjected to Preshipment Inspection by the accredited body (S.G.S.).

Accordingly, no foreign exchange was released with respect to the three applications for which the relevant export products have been sent by the exporter (Linton Industrial Trading Company Limited, Hong Kong) and duly received and utilized by the appellant.

Due to its inability to receive payment for the already exported goods, the exporter, thereafter cancelled its plan to send more consignments of the goods to the appellant. Hence the appellant filed this suit in the lower court against the Respondent.