UNITED SPINNERS NIGERIA LTD V CHARTERED BANK LTD

CORAM

MUHAMMADU LAWAL UWAIS JUSTICE, SUPREME COURT

PARTIES

UNITED SPINNERS NIGERIA LTD APPELLANTS

RESPONDENTS

AREA(S) OF LAW

SUMMARY OF FACTS

The Appellant operated an account with the Respondent. The Appellant sent a letter to the Respondent requesting for allocation of foreign exchange in which a certain sum was allocated to the account of the Appellant. Later on, the Appellant requested another bank – Continental Merchant Bank Plc, to send some documents, including Form M, to the Respondent to enable the Respondent dispose of the foreign exchange allocated to the account of the Appellant. The Continental Merchant Bank Plc forwarded the necessary documents to the respondent. The Respondent effected the transfer of the foreign exchange as instructed by the Appellant and debited its accounts. The Respondent made demands upon the Appellant to settle its indebtedness to the respondent with respect to the foreign exchange but the Appellant failed to do so. The Respondent filed a petition in the Federal High Court alleging that the appellant was insolvent and unable to pay its debt. Later, the Appellant filed a notice of preliminary objection on the grounds that the trial court had no jurisdiction to entertain the petition. After hearing counsel for the parties on the preliminary objection the trial court held that the application lacked merit and was dismissed. Dissatisfied with the ruling, the Appellant appealed to the Court of Appeal. While the appeal was pending, the Appellant brought a motion on notice for an order staying all further proceedings in the substantive suit pending the hearing and determination of the respondent’s appeal to the Court of Appeal against the ruling of the Federal High Court. The motion was instantly dismissed. The appellant then decided to appeal to the Supreme Court.

HELD

The appeal succeeded and was allowed. The decision of the Court of Appeal was set-aside and in its place the application was granted.

ISSUES

1. Did the Court of Appeal in peremptorily dismissing the application, exercise its discretion judiciously and judicially?2. Was the Court of Appeal’s dismissal of the Appellant’s application without considering the Appellant’s brief and adverting to the principles of law of stay of proceedings relevant to the application?3. Is the Court of Appeal right to hold that the Appellant’s claim is puerile and this cannot in their view constitute a genuine dispute as to indebtedness?

RATIONES DECIDENDI

RIGHTS OF PARTIES TO A CASE

“Each party to a case has a right to have his case determined upon its merits and courts should do everything to favor fair trial of the questions before them.” Per M.I.UWAIS, CJN.