Nigeria Intercontinental Merchant Bank Ltd. V. Union Bank Of Nig. Ltd. & Ors (2004)

LAWGLOBAL HUB Lead Judgment Report

PATS-ACHOLONU, J.S.C.

The appellant had instituted an action against the West African Marine Products Ltd. the 2nd respondent at the Lagos High Court for the recovery of a sum of N101,598,144.08 or realize the security which constituted of assorted frozen fish imported with an overdraft facility granted by the appellant’s bank. The fish was stored in the cold room belonging to the defendant 2nd respondent. On the 31st July, 1998, the Lagos High Court granted leave to the appellant sequel to its ex parte application, to take possession of, remove and sell the entire stock of fish stored in the cold room of the 2nd respondent. It further made orders restraining the 2nd respondent, its agents and others from disturbing or preventing the appellant from taking possession and disposing of the entire stock and in any way from interfering or intermeddling with the appellant’s possession or sale of the entire frozen fish …

However on the 10th August, 1998 after the order above was made, the 1st respondent in this appeal filed an action in the Federal High Court which incidentally gave rise to this present appeal against the appellant in this case in respect of the same fish for which an earlier order had been obtained in the Lagos High Court. Interestingly on the 19th August, 1998, the 1st respondent applied by a motion to restrain the appellant, West African Marine Products Ltd. and Triana Ltd. who happen to be the defendants in the suit FH/C/L/Cs/869/98 from tampering, disposing or further selling the total quantity of fish of assorted kinds in 86000 cartons presently stored at cold room/ warehouse of Arsa Fish Foods (Nig.) Ltd.; an order directing the Deputy Sheriff to secure the cartons of the fish which is the subject matter of the suit, and an injunctive order restraining the defendants by themselves and their agents and privies from disturbing, harassing intimidating and interfering with the duties of the receiver/manager. It is desirable and necessary in the con of this matter to set down some averments made by the 1st respondent in respect of the application before the Federal High Court when the suit was instituted viz;

4. That prior to the grant of the loan and overdraft facility the 2nd defendant has executed in favour of the plaintiff the deed of debenture dated 18/04/96 and a supplemental mortgage debenture dated 22/12/97, copies of the deeds are hereby attached as exhibits ‘B’ and ‘C’ respectively.
5. That the plaintiff pursuant to the deed of debenture formally demanded that the 2nd defendant’s

indebtedness be paid within thirty days. Copy of the notice of demand is hereby attached as exhibit ‘D’.

6. That the 2nd defendant rather than honouring the letter of demand above secretly and contrary to exhibits ‘C’ and ‘D’ executed another agreement in favour of the 1st defendant. A copy of the letter is attached herewith and marked exhibit ‘D’.
7. That the 1st defendant purporting to be acting pursuant to the deed of agreement and also a Lagos High Court order of Hon. Justice P. O. Atilade forced open the 3rd defendant warehouse and carted away the assorted fish financed by the plaintiff through the 2nd defendant.
8. That the fish has been found to be kept at Arsa Fish Foods Nigeria Limited, Old Ojo Road, Lagos.
9. That as a result of the failure of the 2nd defendant to honour the letter of demand – exhibit ‘D’ – and this breach of the debenture the plaintiff in exercise of its power under the deed of debenture appointed a receiver/manager to take over the assets of the 2nd defendant. Attached herewith as exhibit ‘E’ is the letter of appointment of the receiver.
10. That the appointment of the receiver was communicated to the 2nd defendant by the plaintiff. Also attached as exhibit ‘F’ is the said letter.

The appellant (as the 1st defendant) in that motion made profuse averments in respect of its own interest in that case in its counter-affidavit. I hereby set down below some pertinent portions of that deposition.

(a) That contrary to paragraphs 3(c) and 5 of the plaintiff’s affidavit no other party except the 1st defendant has any interest or rights in the fish lying in the 2nd defendant’s cold room along Apapa/Oshodi, Expressway, Ijeshatedo, hence they were not entitled to be heard on the 1st defendant’s motion ex parte dated 30/7/98.

(b) That contrary to paragraphs 3(d) and (e) of the plaintiff’s affidavit in support, the fish imported by the 2nd defendant with the N127.5 million overdraft facility granted by the 1st defendant and over which the 1st defendant has an exclusive lien is 3,500 metric tones of assorted sardinella, mackerel, horse mackerel and African mixed fish and not just 30,000 cartons of sardinella fish as wrongly averred by the plaintiff.

(c) That by the 1st defendant’s letter of offer to the 2nd defendant dated 10/4/96, an overdraft facility of N127,500,000.00 was offered to 2nd defendant for the importation of 3,500 metric tonnes of assorted frozen fish and the 2nd defendant accepted the 1st defendant’s offer by signing the acceptance column of the said letter.

(d) That the 2nd defendant’s acceptance of the 1st defendant’s offer of N127,500,000.00 overdraft facility was further authorised, approved and ratified by the 2nd defendant’s board of directors at its board meeting held on 18/4/96.

(e) That as security for the said overdraft facility, the 2nd defendant executed a Tripartite Warehousing Agreement dated 7/5/96 in favour of the 1st defendant in respect of all the 3,500 metric tonnes of assorted frozen fish imported with the said facility and stored in the 2nd defendant’s cold room at Ijeshatedo.

(f) That therefore, contrary to the averment in paragraph 3(e) of the plaintiff’s affidavit in support, the relevant to Tripartite Warehousing Agreement executed between the 1st, 2nd and 3rd defendants was the one dated 7/5/96 and not that dated 11/11/97 which was wrongly exhibited by the plaintiff.

(g) That the aforementioned overdraft facility of N127,500,000.00 has been fully advanced to the 2nd defendant who has fully drawn down on the facility and the 2nd defendant has utilised the facility to import assorted types of frozen fish into Nigeria which was stored in the 2nd defendant’s aforesaid cold room.

it is therefore evident that two courts of different jurisdictions had before them a common subject matter for which each party had applied for some orders which by their very nature would come into conflict with each other and could create a situation that could lead to juridical confrontational stance by which the courts might in all probability (as indeed they did) make contrary and conflicting opposing orders.

The order made by the Federal High Court seised of the proceedings inter alia runs thus;