This appeal borders on Breach of Commercial Contract.
CASE TITLE: FBN PLC v. STANDARD POLYPLASTIC INDUSTRIES LTD (2022) LPELR-57684(SC)
JUDGMENT DATE: 13TH APRIL, 2022
PRACTICE AREA: COMMERCIAL LAW
LEAD JUDGMENT: CHIMA CENTUS NWEZE, J.S.C.
SUMMARY OF JUDGMENT:
FACTS
This is an appeal against the judgment of the Court of Appeal, Owerri Division delivered on the 23rd day of March, 2018. Coram: M.A. Oredola (JCA); I.G. Mbaba (JCA); and T.O. Awotoye (JCA) wherein, the Court affirmed the decision of the trial Court.
The Respondent who was a customer of the Appellant maintained a current Account No. 2001443830 with the Appellant. The Respondent 1993 applied for and letters of credit were opened on its behalf by the Appellant to import industrial spare parts and two sets of mould for the production of beer crates with electric control cabinets. The Appellant debited the account of the Respondent domiciled with it as follows:
(a) N95,950,000.97 being the equivalent of USD$ 129,150.00
(b) N4,074,000.74 being the equivalent of USD$5,430.00
The Appellant applied to the Central Bank of Nigeria (CBN) for allocation of foreign exchange which was duly approved and the Forms were returned to the Appellant. The Appellant gave the Respondent copies of the said Form Ms for processing. The appellant failed to remit the dollars to the corresponding bank for onward payment to the Respondent’s Customer, Bramchas Trading Company, London. The Appellant did not at any time before or immediately after the expiration of the Form Ms inform the respondent in writing as required by banking rules and practice that CBN did not allocate equivalent foreign exchange. The appellant did not also credit back the respondent’s account for the Naira equivalent.
The respondent waited for a long time for the appellant to remit the said foreign exchange to his foreign customer but the appellant did not do so. The respondent through her Managing Director sourced for foreign exchange at a higher rate travelled to London and paid Bramchas Trading Co. London. The respondent was issued receipts by Bramchas Trading Co. London for the sum of USD $129,150,00 and USD $5,430.00 which were tendered in evidence as Exhibit “CG” and “CH” respectively. The appellant had utilized the respondent’s money in her business from 1983 up till now. After several years, the appellant turned around to claim that the CBN did not provide foreign exchange cover (FX). The respondent wrote to the Appellant severally to return the said dollars to him but the appellant refused. The appellant wrote a letter to the respondent and admitted being in possession of the respondent’s money but neglected to refund the said money. The letter written by the appellant dated 13/9/2010 acknowledging or admitting liability to the respondent was tendered in evidence as Exhibits “CM.”
The major defence of the Appellant at trial is that it was not liable to repay the respondent in US Dollars and that in any event, the action had become statute-barred.
The Respondent (as Claimant) filed a Writ of Summons and Statement of Claim before the trial Court on the 24th day of September 2013, claiming four (4) reliefs against the appellant. The appellant (as Defendant) at the trial Court defended the suit based on an amended Statement of Defence and filed a preliminary objection challenging the jurisdiction of the trial court to hear the suit. The trial Court in a well-considered ruling dismissed the said preliminary objection.
Dissatisfied with the ruling delivered on the 27th day of October 2014 and the judgment of the trial Court delivered on the 22nd day of July 2016 which upheld the claims of the Respondents, the Appellant appealed to the Court of Appeal.
The Court of Appeal delivered judgment on the 23rd day of March 2018 dismissing the appeal and affirming the judgment of the trial court.
Aggrieved by that judgment, the appellant has appealed against the concurrent findings of the trial Court and the Court of Appeal to the Supreme Court.
ISSUES FOR DETERMINATION
The appeal was determined on the following issues:
1. Was the Court below right when it upheld the trial Court’s jurisdiction to hear and determine the respondent’s suit and also failed to consider the appellant’s contention that the subject matter of the suit was beyond the scope of the substantive jurisdiction of the trial Court?
2. Was the Court below right when it upheld the interest awarded to the respondent by the trial Court?
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DECISION/HELD
The appeal was unanimously dismissed.
RATIOS:
- ACTION – STATUTE BARRED ACTION: How to determine whether an action is statute-barred; the effect of a statute-barred action
- ACTION – STATUTE BARRED ACTION: Instance(s) when action will not be statute-barred
- COMMERCIAL LAW – COMMERCIAL LETTER OF CREDIT: Nature of a documentary credit transaction
- COMMERCIAL LAW – COMMERCIAL LETTER OF CREDIT: Nature of letters of credit transactions that falls under the exclusive jurisdiction of the Federal High Court
- COMMERCIAL LAW – INTERNATIONAL COMMERCIAL TRANSACTION: Nature of international commercial transaction; who can bring an action to enforce the same
- JUDGMENT AND ORDER – AWARD OF INTEREST: Instance(s) in which interest should be awarded and when an appellate court will not interfere with the award of interest made by a trial Court
- JURISDICTION – ADMIRALTY JURISDICTION: Scope of the admiralty jurisdiction of the Federal High Court
