Osun State Government V Dalami Nigeria Limited (2007)

LAWGLOBAL HUB Lead Judgment Report

I. KATSINA-ALU, J.S.C

On 28th February, 1991 a Consortium of Management Operation Lease Agreement was executed for the management of Cocoa Products Industries (Nig.) Ltd. situate at Ede, Osun State. The Deed was between Cocoa Products Industries Nigeria Limited, on the one hand, as lesson, and World Wide Industrial Venture Ltd. (50%); Phoenix Produce Nigeria Limited (25%); Dalami Nigeria Ltd. (15%) and Oyo State Government (10%) as lessees. The lease period was for a term of 6 years. The substance of the leasehold was that World Wide Industrial Venture Ltd was to produce the Managing Director, Plant, Service and Shift Managers, Phoenix Produce Nigeria Ltd to produce the accountant and Marketing Manager, Dalami to produce the Purchasing, Administration Managers and Company Secretary, whereas Oyo State Government was to produce Chairman of the Board of Directors, Financial Controller and Internal Auditors as

management lessees. The Government of Osun State in 1991 August became the successor of Oyo State Government, as the principal shareholder of Cocoa Products Industries (Nig.) Ltd., Ede, consequent upon assets sharing.

The Government of Osun State on 2nd November; 1992 caused the leasehold to be terminated following the resolution of the House of Assembly of Osun State vide a letter from the Commissioner for Finance and Commerce. The 15% leaseholder, Dalami Nigeria Limited, on July 5, 1993 took out writ of summons against the appellant and the Government of Oyo State.

By its paras. 24 and 26 of the further amended statement of claim the plaintiff as respondent claimed against the appellants as follows:

“(i) A declaration that the purported termination by the defendants of the Management Lease Agreement subsisting between the plaintiff and the defendant inter alia in relation to the Management of Cocoa Product Industry Limited vide a letter dated the 27th of November, 1992 is wrongful irregular in bad faith in breach of the terms of the Management Lease Agreement. An order nullifying and setting aside the purported termination as conveyed by a letter dated the 27th November, 1992. An order of specific performance directing the defendants to give effect to the terms of the Management Lease Agreement as it relates to the Management of Cocoa Product Industry Limited.

Alternatively

An order directing the defendants to pay to the plaintiff the sum of $11.23 million or its Naira equivalent as damages for the wrong termination of the Management Lease Agreement as follows:-

(a) Loss of 15% of the anticipated profit on cocoa butter and cocoa production realizable by the company from 1992 -1997 – US $3.65 million.

(a) Loss of 15% of the anticipated profit from processing fee realizable by the company from 1992 – 1997 – $3.07 million.

(c) The sum of N100 million as general damages for the wrongful termination of the Management Lease Agreement.”

The learned trial Judge found for the respondent. He made the following awards:

“(i) Loss of 15% anticipated profit from sales of cocoa butter and cake (1992 – 1997) US $3.65 million.

(ii) Loss of 15% anticipated profit from processing fees (1992 – 1997) – US $3.07 million. Total US $6.72 million, as special damages, and N85, million as general damages. All these awards should be calculated up to date on the basis of evidence uncontradicted of the PW3 showing the CBN exchange rates from 1992 – January – December 1998 both periods inclusive i.e. the Naira equivalent of $6.72 million US Dollars the calculation of which should be in accordance with CBN foreign exchange rate as in exhibits H – H6.”