Saidu H. Ahmed & 2 Ors V Central Bank Of Nigeria (2012)

LAWGLOBAL HUB Lead Judgment Report

OLUFUNLOLA OYELOLA ADEKEYE, J.S.C.

The 1st appellant, S.H. Ahmed a businessman and an investor is the chief promoter and a majority shareholder in the 2nd appellant’s leading Leather Products Limited and the 3rd appellant’s Saidtall Shoes Ltd. The respondent; the Central Bank of Nigeria is a banker and chief financial adviser/regulator of the Federal Government of Nigeria. The functions of the respondent include operation and regulation of the Debt Conversion Auction Programme of the Federal Government through the debt conversion committee. The 2nd and 3rd appellants were brought in as plaintiffs by the amendment to the Writ of Summons and Statement of Claim with leave of the trial court on the 11th of December 1996 (vide pages 30-41 of the record of appeal). On the 22nd of March 1991, the 1st appellant applied to the respondent for participation in the debt conversion auction programme of the respondent. The 1st appellant was the redemptory of the debt conversion programme while, the 2nd and 3rd appellants were supposed to be the beneficiaries. The 1st appellant applied to the respondent for leave to cancel $10,000,000.00 dollars worth of debt instrument in favour of the 2nd and 3rd appellant companies. Part of the condition precedent for the 1st appellant’s participation was the production of feasibility study reports for the proposed leather processing and shoe manufacturing company. The respondent found the projects viable based on their feasibility reports. The 1st appellant also had approval and allocation by Nexim of the African Development Bank Export stimulation Loan (ADB/ESL) facility for the sums of $2, 508,881.25 and $1,939.877.56 to the 2nd and 3rd appellants. The respondent approved the application of the 1st appellant to participate in the debt conversion programme. The 1st appellant paid into the respondent’s account No. 65002557 with Morgan Guaranty Trust company of New York USA the sum of $164, 925.00 sequel to the 1st appellant’s 1st successful bidding in the auction held on the 30th of August 1991. This amount was to provide sufficient funds in the 1st Appellant’s account with the respondent to deduct charges and commission due to it from the 1st appellant for any debts redeemed at the auction. The 1st appellant cancelled debts to the tune of $3, 721,807.81 on behalf of the Federal Government of Nigeria. A commission of $55, 072.99 was deducted from the un-utilised transaction commission leaving a balance of $109, 852.01. Auctions for debt conversion became irregular and the 1st appellant could no longer produce debt instruments to the tune of $10, 000,000 as he had earlier represented to the respondent. The 1st appellant considered same as no longer viable owing to the fluctuating value of the naira, stopped participating in the bidding sessions. The 1st appellant there and then requested the respondent for a refund of the un-utilised balance of the commission; a sum of $109, 852.01. The respondent refused to refund the amount.

The appellants decided to institute this action for the recovery of the amount. The appellants as plaintiff filed an action at the Federal High court Lagos against the respondent. In the Amended writ of summons and statement of claims at pgs. 30-41 of the Record, the 1st appellant claims as follows: –

1. Special damages in the sum of $109,852.01 being a refund of the un-utilised transaction commission on the $164,925.00 originally paid by the plaintiff, to the plaintiffs credit with the defendant’s accounts with Morgan Guaranty Trust Company New York U.S.A. for the plaintiffs transaction with the defendant in the Debt Conversion Auction programme of the central Bank of Nigeria.
2. The 1st plaintiff also claims interest on the aforesaid sum of $109,852.01 at the rate of 21% per annum with effect from 30th September 1991 still judgment and final payment of all sums due.

General Damages

1. $100,000.00 (one million Dollars only) for derivation suffered, loss of businesses, loss of leverage and profits the plaintiffs would have earned on the $109, 852.01 unlawfully held from him by the defendant and financial embarrassments and dislocations in business suffered by the Plaintiffs.
2. N50,000,000 (fifty million Naira only) for the cancellation of the registration of the 1st plaintiffs company; Mercury Assurance Company Ltd which has resulted in the loss of income, severe embarrassment and bringing to public odium the plaintiff and his standing in the business community as a clear fall out of the defendant’s action against the 1st plaintiff.

Special Damages

1. $4, 306,372.73 (four million, three hundred and six thousand, three hundred and seventy-two dollars seventy-three cents only) being the five years profit lost by the 2nd plaintiff which it would have earned if it was not jeopardised by the defendant’s action as reflected in the feasibility study reports done by Delloite Haskins & Sells International Limited, a world acclaimed firm of management consultants as contained in page 21 Section 8.1 and page 35 appendix IX of their feasibility report on the plaintiff.
2. $4, 034,150 (four million, thirty-four thousand, one hundred and fifty dollars only) being the five years profit lost by the 3rd plaintiff which it would have earned if it was not jeopardised by the defendant’s act as reflected in the feasibility study reports done by Delloite Haskins & Sells International Limited a world acclaimed firm of management consultants as contained in page 19 Section 8.1 and page 31 appendix IX of their feasibility report on the 3rd plaintiff.

At the trial before the Federal High Court, parties exchanged pleadings.

Oral testimony of witnesses and documents were accepted in support of the case of the parties.

The learned trial judge in the judgment delivered on 25/1/2000 found in favour of the appellants and made the undermentioned findings –

1. Respondent to refund the balance of un-utilised transaction commission in the sum of $109,852.01 together with interest at the rate of 21% per annum with effect from 30 September 1991.
2. The plaintiff is hereby awarded the sum of $100,000 (one hundred thousand dollars) as general damages.
3. A sum of N50, 000,000 (fifty million Naira) as general damages for cancellation of the registration of the 1st plaintiffs insurance company is hereby dismissed.
4. The 2nd plaintiff is hereby awarded the sum of $4,306,372.73 (four million, three hundred and six thousand, three hundred and seventy two dollars, seventy-three cents) as special damages for five years loss of profit.
5. The 3rd plaintiff is hereby awarded the sum of $4,034,150 (four million, thirty-four thousand, one hundred and fifty dollars).

Vide pages 303-304 of the records.

Being aggrieved by the judgment of the trial court, the respondent appealed to the Court of Appeal Lagos. In the judgment of the court delivered on 24th February 2003, the Court of Appeal upheld the award of the refund of the un-utilised transaction commission with interest, but set aside the awards of $ 100,000 general damages in favour of the 1st appellant and $4,306,372.73 and $4,034,150 special damages to the 2nd and 3rd appellants for 5 years loss of profit. The court held that in view of the 21% interest on the un-utilised transaction commission, the amount of $100,000 general damages amounted to double compensation which is untenable and wrongful in the law on the award of damages. The award of 5 years loss of profit to the 2nd and 3rd appellants was far too remote.

Vide page 476 of the record.

The respondents before the court below dissatisfied with the judgment of the Court of Appeal, filed an appeal against that part of the judgment.

At the hearing of the appeal, parties adopted their respective briefs.

The brief of the appellant was deemed filed on 24/8/2009. The learned counsel for the appellants adopted and relied on the brief wherein two issues were distilled from grounds III – VII of the amended notice of appeal as follows –