UNION BANK OF NIG. PLC. V PETER OMOKARO
April 29, 2025ALI WAKILI & ANOR V MALAM BUBA & ANOR
April 29, 2025Legalpedia Citation: (2015) Legalpedia (CA) 19111
In the Court of Appeal
Tue Jul 14, 2015
Suit Number: CA/L/230/2014
CORAM
PARTIES
KEYSTONE BANK LTD APPELLANTS
SHEMOMAL NIGERIA LTD RESPONDENTS
AREA(S) OF LAW
SUMMARY OF FACTS
The Plaintiff/Respondent a customer to the Defendant/Appellant Bank with a dated 11th April 2011 applied for a letter credit. The Plaintiff/Respondent case was that the Defendant/Appellant omitted to fully describe the goods in the pro forma invoice, the Defendant/ Appellant also failed to carryout pre and post shipment inspections as required and the goods were not brought in through the designated ship or vessel. Displeased, the Plaintiff/Respondent initiated an action against the Defendants/Appellants at the Federal High Court sitting in Lagos claiming the following amongst others; a declaration that the Defendant Bank, (Keystone Bank Ltd), having taken over the assets of Bank PHB is under an obligation to settle the claims made herein by the Plaintiff against the Defendant Bank. Declaration that the Defendant is in breach of its obligations to the Plaintiff to reflect in absolute terms the items listed in the Pro Forma Invoice which item was not properly reflected and or contained in the Irrevocable Letter of Credit issued by the Defendant on behalf of the Plaintiff on or about 12th March, 2011 in the sum of USD375,000.00.A Declaration that the Plaintiff is entitled to the refund from the Defendant the value of the said irrevocable letter of credit and all other costs, expenses and payments made by the Plaintiff to the Defendant and any other person with regards to the importation of goods upon the said Irrevocable Letter of Credit. The Defendant/ Appellant was promoted to appeal to the Court of Appeal after the trial court held in favour of the Plaintiff/Respondent.
HELD
Appeal Dismissed
ISSUES
Whether the court below had the jurisdiction to entertain the Respondent’s case which was for an alleged breach of contract for the issuance of an irrevocable letter of credit.Whether the appellant was in breach of the terms of the irrevocable letter of credit for allegedly failing to request for an original laboratory test certificate from the beneficiary of the irrevocable letter of credit before honouring the beneficiary’s request for payment of the due sums under the letter of credit. Whether the court erred in law when it deviated from the case formulated by the parties in their respective pleadings (as to the Appellant’s alleged negligent payment of sums due under the irrevocable letter of credit without complying with the terms of credit disallowing partial shipment or transhipments) to the novel and unpleaded / unanticipated case of “original laboratory test certificate” which has nothing to do with the shipment of the goods shipped.Whether the court below erred in law when it formulated, rewrote, renegotiated and expanded the terms of the irrevocable letter of credit between the Respondent and the Appellant by hinging the judgment on the contractual dispute between the parties at the court below solely on a novel contractual term that was NEVER contemplated and agreed upon by the parties. Whether the court below appropriately awarded general damages in the sum of N100,000,000.00 (One Hundred Million Naira) against the Appellant based on the solitary principle that “where a party to a contract is in breach of its terms, the other party is entitled to file an action for damages” without admitting its mind to (1) the fact that the Respondent was in possession of the goods paid for by the Respondent under the irrevocable letter of credit and (2) the law that the said principle only spells out a possible cause of action to aggrieved parties in a contract and does not by itself, in the absence of evidence / justification entitled just any aggrieved party to any such of money claimed as general damages.
RATIONES DECIDENDI
JURISDICTION – JURISDICTION OF THE FEDERAL HIGH COURT IN RELATION TO SECTION 251(1)(D) OF THE 1999 CONSTITUTION OF THE FEDERAL REPUBLIC OF NIGERIA
“The proviso to Section 251 (1) (d) does not preclude the Federal High Courts from having jurisdiction over such matters but removes the jurisdiction from their exclusive realm. Both the Federal and State High Court have concurrent jurisdiction to entertain matters relating to banker / customer relationship. It is irrelevant if any of the parties is a federal organization or agency.” PER. Y. B. NIMPAR, J.C.A
EVIDENCE- A PARTY CANNOT LEAD EVIDENCE ON FACTS NOT PLEADED
“It is trite and firmly established that a party cannot lead evidence on facts not pleaded, see Okpala V. Iheme (1989) 2 NWLR (PT 102) 208, SPDCN V. Nwawka (2003) 6 NWLR (PT 815) 18, Okoko V. Dakolo (2006) 14 NWLR (PT. 1000) 401.” PER. Y. B. NIMPAR, J.C.A
CONCURRENT JURISDICTION OF THE FEDERAL AND STATE HIGH COURTS -THE FEDERAL AND STATE HIGH COURT HAVE CONCURRENT JURISDICTION ON BANK AND CUSTOMER RELATIONSHIP
“The position of the law now is very clear on contractual relationships between a bank and its customer. The settled position is that the Federal and State High Court have concurrent jurisdiction to entertain such matters. This position was clearly stated in the case of N.D.I.C. V Okem Enterprises LTD (2004) 10 NWLR (Pt.880)107Per KATSINA ALU, JSC” PER. Y. B. NIMPAR, J.C.A
BANKS- DUTY OF BANKS IN NIGERIA TO ENSURE THAT ALL REGULATORY DIRECTIVES ARE ADHERE TO
“It behooves on a responsible bank in Nigeria to ensure that it complies with all directives from its regulatory body such as the CBN.” PER. Y. B. NIMPAR, J.C.A
BANK IN A BUSINESS TRANSACTION- THE BANK IS NOT TO UNDERTAKE THE DUTY OF DETERMINING WHETHER GOODS WITH DIFFERENT DENOMINATIONS ARE ACTUALLY THE SAME, OR WHETHER DIFFERENT DESCRIPTIONS OF THE GOODS ARE IN FACT THE SAME.
“While the seller and buyer may be able to reconcile their differences in the use of interchangeable terms or descriptions, it is not appropriate to expect a bank to undertake the task of determining whether goods with different denominations are actually the same, or whether different descriptions of the goods are in fact the same.” PER. Y. B. NIMPAR, J.C.A
LETTER OF CREDIT- THE ENVIRONMENT IN WHICH A LETTER OF CREDIT ISSUE MUST COMPLY WITH CBN DIRECTIVES
“The environment in which a letter of credit is issued requires absolute compliance with the CBN Directives.” PER. Y. B. NIMPAR, J.C.A
EFFECT OF THE UCP 600 RULES ON DOMESTIC RULES- THE UCP 600 RULES DOES NOT PRECLUDE LOCAL REGULATORY BODIES FROM MAKING REGULATION
“The UCP 600 Rules is an international regulation by the International Chamber of Commerce which regulates international transactions applicable to documentary credit. The rules do not in any way preclude other local regulatory bodies from making regulations or directives guiding such international transactions.” PER. Y. B. NIMPAR, J.C.A
SPECIAL AND GENERAL DAMAGES- ITS MISLEADING TO SEPARATE SPECIAL DAMAGES FROM GENERAL DAMAGES IN CASES OF BREACH OF CONTRACT.
“However, it has been stated that it is improper and misleading to dichotomize between special and general damages in cases of breach of contract because in breach of contract nothing is presumed but the claim must be established as what would have restored the claimant to the position if the contract had not been breached. See P. Z & COMPANY LTD V A. J. Ogedengbe (1972) LPELR – 2894 (SC).” PER. Y. B. NIMPAR, J.C.A
CENTRAL BANK OF NIGERIA DIRECTIVE- RIGHT OF A BANK CUSTOMER TO MAKE REFERENCE TO THE CENTRAL BANK OF NIGERIA DIRECTIVES
“The customer is at liberty to refer to those directives notwithstanding the fact that there is no direct relationship between the CBN and the customer of the bank.” PER. Y. B. NIMPAR, J.C.A
AWARD OF DAMAGES- CLAIMS FOR SPECIAL AND GENERAL DAMAGES IN A BREACH OF CONTRACT WILL NOT VITATE THE SUIT
“Yet, while it is not encouraged to make claims for special damages as well as general damages in a breach of contract, doing so will not vitiate the suit or make it impossible for the court to award damages that would put the plaintiff in the position he would have been if the breach had not occurred. See Agu V. General Oil Ltd (2015) LPELR- 24613 (SC). See also the case of Ijebu-Ode Local Govt V Adedeji Balogun (1991) 1 NWLR (PT. 166) 136 ” PER. Y. B. NIMPAR, J.C.A
ADMISSIBILITY OF DOCUMENTS- POWER OF THE APPELLATE COURT TO DISCOUNTENANCE THE ADMISSIBILITY OF A DOCUMENT
“A court can discountenance a document at judgment stage or even on appeal when the document was wrongly admitted or when legal requirements were not fulfilled at the time of putting it in evidence. Also, a document which is inadmissible by law and is admitted without any objection at the trial can be rejected on appeal. See Anyaebosi V. R.T. Briscoe Nig Ltd (1987) NWLR (PT 59) 84; Ajayi V. Fish 1 F.S.C 97; Yassin V. Barclays Bank D.C.O (1968) 1 ALL NLR 171 @ 177 and Esso West Africa Incorporated V. Alli (1968) NWLR 414 @ 423. That situation is different from the one where the document is admissible and was admitted without objection. The opposing side cannot after its admissibility raise any objection on its admissibility and an appellate court will not also set aside the trial court’s decision on it. See the case of High grade Maritime Services Ltd V. First Bank Of Nigeria Ltd (1991) LPELR – 1364 (SC).” PER. Y. B. NIMPAR, J.C.A
DOCTRINE OF INCORPORATION BY REFERENCE- APPLICATION OF THE DOCTRINE OF INCORPORATION BY REFERENCE IN THE CONSTRUCTION OF A DOCUMENT.
“In the Supreme Court case of Iwuoha V. N.R.C (1997) 4 NWLR (PT 500); (1997) LPELR-1570 (SC) the court PER KUTUGI J.S.C stated as follows:
“The principle or doctrine of incorporation by reference is one that is frequently applied in the construction of documents where from the documents or document produced by the parties, it is clear that some other evidence must have been in the contemplation of the parties. In such a case, the document put forward compels the court to look beyond and ascertain precisely the other evidence which by necessary implication the parties must have had in their minds at the time of the contract.” PER. Y. B. NIMPAR, J.C.A
GENERAL DAMAGES- AWARD OF GENERAL DAMAGES IS AT THE DISCRETION OF THE JUDGE
“It is trite that award of general damages is at the discretion of the Judge. However, this discretion must be exercised judiciously and judicially and where it is properly exercised, the Appellate Court has no reason to upturn it.” PER. Y. B. NIMPAR, J.C.A
PRACTICE AND PROCEDURE- THE RESPONDENT’S ISSUES FOR DETERMINATION MUST RELATE TO THE APPELLANT’S GROUNDS OF APPEAL.
“It is trite that any issue for determination by the Respondent in an appeal must relate to the grounds of appeal filed by the Appellant.” PER. Y. B. NIMPAR, J.C.A
CONTRACT- EFFECT OF MATTERS INCORPORATED INTO A CONTRACT
“In the English case of WASSON V. SCHUBERT, 964 S.W.2D 520, 524 (MO. CT. APP. 1998) the court held as follows:
“It is well established that matters incorporated into a contract by reference are as much a part of the contract as if they had been set out in the contract in haec verba.” (haec verba meaning “in these words”).” PER. Y. B. NIMPAR, J.C.A
INTERNATIONAL TRADE- COMPLEXITY OF INTERNATIONAL TRADE
“The complexity of international trade means that the banks as agents of the buyer or seller are not able to understand and appreciate all technical terms (some of which are interchangeable) or the technical differences between goods of similar functions or nature.” PER. Y. B. NIMPAR, J.C.A
AWARD OF GENERAL DAMAGES IN BREACH OF CONTRACT- WHEN THE COURT WILL AWARD GENERAL DAMAGES IN A BREACH OF CONTRACT.
“Once a party has shown that the damages under general damages is damages naturally flowing, resulting from or a probable consequence of the breach, the court will still award general damages notwithstanding the fact that it may be difficult to prove or quantify the loss.” PER. Y. B. NIMPAR, J.C.A
ASSESSMENT OF DAMAGES- DAMAGES ARE ASSESSED BY THE QUANTUM OF WHAT WILL PUT THE AFFECTED PARTY IN THE POSITION HE WOULD HAVE BEEN IF NOT FOR THE BREACH
“The assessment of damages is generally the quantum of damages to be paid to a person for breach of contract and should be the amount it will entail to put the person in the position he would have been if there had not been any breach of contract.” PER. Y. B. NIMPAR, J.C.A
WORDS AND INTENTION OF PARTIES TO A CONTRACT- THE COURT CANNOT ASSUME OR IMPLY WHAT WAS STATED IN A CONTRACT
“The words in a contract entered into by parties’ shows the court the intention of the parties. The court cannot therefore begin to assume or imply what was not stated in the contract.” PER. Y. B. NIMPAR, J.C.A
CASES CITED
STATUTES REFERRED TO
1999 Constitution of the Federal Republic of Nigeria(as amended)UCP 600 Rules
