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FIRST BANK OF NIGERIA PLC. V. J.O. IMASUEN AND SONS NIGERIA LTD. (2013)

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FIRST BANK OF NIGERIA PLC. V. J.O. IMASUEN AND SONS NIGERIA LTD.

(2013)LCN/6205(CA)

In The Court of Appeal of Nigeria

On Friday, the 17th day of May, 2013

CA/B/151/2006

JUSTICES

SIDI DAUDA BAGE Justice of The Court of Appeal of Nigeria

AYOBODE OLUJIMI LOKULO-SODIPE Justice of The Court of Appeal of Nigeria

TOM SHAIBU YAKUBU Justice of The Court of Appeal of Nigeria

Between

FIRST BANK OF NIGERIA PLC. – Appellant(s)

AND

J.O. IMASUEN AND SONS NIGERIA LTD – Respondent(s)

RATIO

THE PURPOSE OF A REPLY BRIEF

The position of the law regarding the purpose of reply brief and when it should be filed in an appeal is settled. Basically, a reply brief is necessary when an issue of law or argument raised in the respondent’s brief calls for a reply. And such a reply brief should be limited to answering the new point arising from the respondent’s brief. See HARKA AIR SERVICE (NIG.) LTD V. KEMOR [2011] All FWLR (Pt.591) 1402, wherein the Supreme Court dwelling on reply brief per Adekeye JSC; stated at page 1416 thus: “The appellant courts had in many decided cases laid emphasis on when a reply brief is necessary and what it should address. A reply brief is filed when an issue of law or argument raised in the respondent’s brief usually by way of a preliminary objection calls for a reply. Where a reply brief is necessary, it should be limited to answering any new points arising from the respondent’s brief. Although the filing of a reply brief is not necessary, where a respondent’s brief raises issues or points of law not covered in the appellant’s brief, an appellant ought to file a reply as failure to file one without oral reply to the points raised in the respondent’s brief may amount to a concession of the points of law or issues raised in the respondent’s brief. It is not proper to use a reply brief to extend the scope of the appellant’s brief or raise issues not dealt with in the respondent’s brief. A reply brief is not meant to have a second bite of the cherry ………”See also GOODWILL & TRUST INVESTMENT LTD V. WITT & BUSH LTD (2011) ALL FWLR (PT. 576) 517. LOKULO-SODIPE, J.C.A

WHETHER OR NOT ISSUE FOR DETERMINATION MUST ARISE FROM THE GROUND OF APPEAL

I must first observe that the arguments of the Respondent clearly show the wisdom in the decisions of the appellate courts in which parties have been consistently admonished to marry or tie the issues which they formulate for determination in an appeal to the grounds of appeal from which the said issues are distilled. See DIAMOND BANK PLC V. MONANU [2013] 7 WRN 110 at 119. LOKULO-SODIPE, J.C.A

AYOBODE OLUJIMI LOKULO-SODIPE, J.C.A (Delivering the Leading Judgment): This appeal is against the judgment delivered on 27/10/2003 by the Federal High Court, Benin Judicial Division (hereafter simply referred to as “the lower court”) presided over by Hon. Justice N.I. Auta (now Chief Judge) (hereafter simply referred to as “the then learned trial Judge”). The lower court entered judgment in favour of the Respondent which was the Plaintiff before it.

The case was contested by the parties upon their respective pleadings. The last of the Respondent’s pleading was its Further Amended Statement of Claim while the last of the Appellant’s pleading was equally its Further Amended Statement of Defence.

The Respondent in its pleading disclosed that it had an agreement with Messrs. Tropenhelz Agentur for the supply of furniture components (specification and quantity duly set out) to the value of USD 15,000. That a confirmed and irrevocable Letter of Credit (hereafter simply referred to as “L/C”) dated 22/12/88 was opened by Badische Kommunale Landesbank Karisruhe also known as Suedwest Beutsche Landesbank Karleseuhe to International Bank for West Africa Ltd (hereafter simply referred to as “IBWA”) negotiable by the Appellant. The Respondent claimed that the L/C was amended by telex message dated 2/2/89 in which the expiry date of the L/C was extended from 30/1/89 to 15/3/89. (Bold and Underline supplied by me for emphasis).

One of the conditions of the L/C as disclosed by the Respondent is that “the presentation of the shipping documents must be within 21 days after Bill of Lading date but within the validity of the credit”. The Respondent claimed to have made a partial shipment of the furniture components to the value of USD 8,606, on board a specified vessel as per Bill of Lading No. BDN 1829 dated 5/4/89 pursuant to the L/C as amended. The Respondent further claimed to have made all the relevant shipping documents available to the Appellant on 25/4/89 but that the Appellant failed to pay the contractual price for shipment in the sum of $8,606 or its Naira equivalent, despite the fact that the relevant shipping documents complied with the terms and conditions of the L/C. It is also the case of the Respondent that as a result of the non-payment by the Appellant for the partial shipment of furniture components that it made, it was unable to obtain liquid funds to enable it finance the shipment of the remaining furniture components to the value of $6,393.17, even though it (Respondent) was ready and willing to do so. The Respondent also stated that on 1/2/89, it received a telex message from one Alfred Platte, an agent of the importer company that the expiry date of the L/C had been extended for 6 weeks and confirmed. Bold and Underline supplied by me for emphasis).

The Respondent pleaded its reliance on relevant documents to show that the Appellant exhibited gross negligence (the particulars of which were set out) in handling its part of the transaction particularly the non-payment of the sum of $8,606 or its Naira equivalent when the shipping documents were presented. In the premises of the averments in its pleading, the Respondent claimed the following reliefs against the Appellant –

“(a) (i) value of the shipped 22.95 cubic metres furniture components black afara USD 8,606 or its naira equivalent

(ii) value of the unshipped 17.05 cubic metres furniture components black afara USD 6,393.75 or its naira equivalent.

(iii) N20,000,000.00 being general damages for breach of contract in that the Defendant failed to pay the value of the furniture components shipped when all the relevant shipping documents were presented, and also for loss of international business by the embargo placed on the Plaintiffs business by the Central bank of Nigeria.

(b) Alternatively, the Plaintiff claims from the Defendant the sum of N20,300.000.00 being general damages for negligence on the part of the Defendant and/or its agent Badische Kommunale Landesbank Karisruhe in that the Defendant failed to take necessary steps to get the export proceeds paid and/or repatriated.”

In its own pleading the Appellant controverted the case of the Respondent as set up in the said Respondent’s pleading. Save for admitting the fact of the L/C No. K. 12/373 in favour of the Respondent and the information or facts contained therein, the Appellant denied being a party to any agreement as pleaded by the Respondent in its pleading and that it had no knowledge of the same. The Appellant claimed that by the L/C the shipment date was not to be later than 15/1/89 while the expiry date was 30/1/89. The Appellant averred that any amendment to the L/C or shipment date or expiry date was unauthorized and invalid as no such alleged amendment was ever communicated to it by the issuing bank in Germany or by it (Appellant) to the Respondent. While the Appellant admitted that the Respondent procured a bill of lading dated 5/4/89 and that it presented shipping documents to it, the Appellant not only alleged that the shipment was late but that the shipping documents presented by the Respondent to it were not in conformity with the L/C and set out details in that regard.

The Appellant averred that in banking practice it was not legally or otherwise obliged to negotiate the L/C and/or pay the Respondent pursuant to the L/C (which was unconfirmed) or at all. The Appellant pleaded reliance on banking practice to show that in a L/C, both the issuing and advising/negotiating banks deal in documents and not in goods and are not obliged to pay for a L/C where the document discloses any discrepancy unless and until the opener of the L/C adopts the shipping documents subject to the discrepancies. The Appellant averred that the opener of the Respondent’s L/C rejected the shipping documents and that it promptly informed the Respondent of the rejection. It was averred by the Appellant that it was wrong of the Appellant to have acted on the alleged extension of the expiry date of the L/C by Alfred Platte as neither he nor his alleged principal (i.e. the importer), alone or in collaboration with the Respondent had any right under banking practice or at all to have amended the L/C outside the banking system. The Appellant denied being negligent in any manner or way to the Respondent or that the Respondent suffered any monetary loss entitling it to any damages (general or otherwise) and that if the Respondent suffered any damages, such was self-induced as the Respondent acted outside the terms and ambit of the L/C.

The Appellant disclosed that at the trial of the case or as a preliminary objection, it shall contend that the Respondent has no legal right or otherwise to sue it (Appellant) as it (Appellant) acted as agent of the issuing bank merely as an advising bank which was under no obligation to pay for the L/C on presentation of the shipping documents or at all without first receiving payment from the issuing bank since the L/C was not confirmed by it (Appellant) or at all.

The Respondent called two witnesses and tendered some documentary evidence in the proof of the case it set up in its pleading. The Appellant likewise called one witness and tendered some documentary evidence in the proof of its case as set up in its pleading. The lower court haven had the benefit of the addresses by the parties and haven evaluated the evidence before it, found the Appellant liable to the Respondent for the 22.95 cubic metres of black afara worth $8,606, shipped by it (Respondent) and also for $6,393.75 being the value of 17.25 cubic metres of furniture components which the Respondent could not ship as a result of the breach of contract by the Appellant. The lower court did not stop there; it also ordered 10% interest on the sum of $15,000 which the Respondent missed as a result of the Appellant’s breach of contract from 25/4/89 till when it is paid. Lastly, the lower court ordered the sum of N10,000,000.00 as general damages to the Respondent for delay in export business as a result of the embargo placed on him (Respondent) by the Central bank for no fault of his.

Being dissatisfied with the judgment of the lower court the Appellant lodged an appeal against the same by a Notice of Appeal dated 31/10/2003 and filed on the same date. This process contains eight grounds of appeal.

Pursuant to the order of this Court made on 19/5/2008, the Appellant filed an Amended Notice of Appeal in the appeal. The process which is dated 30/5/2008 and filed on the same date contains 10 grounds of appeal. The Appellant by the instant appeal is praying this Court to set aside the whole of the judgment of the lower court and dismiss the case of the Respondent in its entirety.

In compliance with the Rules of this Court parties filed and exchanged Briefs of Argument. Appellant’s Brief of Argument dated 18/6/2008 and filed on the same date was so filed pursuant to the order of this Court made on 19/5/2008. Appellant’s Reply Brief is dated 8/6/2009 and filed on the same date. Respondent’s Brief of Argument is dated 25/5/2009 and filed on the same date. Appeal was entertained on 6/3/2013 and C.D. Bello learned counsel for the Appellant as well as J.E. Legbedion learned lead counsel for the Respondent both adopted and relied on the respective Briefs of Argument of their clients as hereinbefore identified, in aid of their positions in the appeal.

The Appellant formulated four issues for the determination of the appeal in its Brief of Argument. The issues read thus:-

“1. Whether the learned trial Judge was right in holding that the impression of appellant’s date receipt stamp on the telex, Exhibit ‘B’, amounted to or was confirmation of the letter of credit.

2. Whether the learned trial Judge was right in awarding the respondent the total sum of US $15,000.00, the value of the letter of credit, with interest payable thereon from 25/4/1989 till payment is made.

3. Whether the award of general damages of N10 million to the respondent by the learned trial Judge was justifiable.

4. Whether he learned trial Judge did not fail to sufficiently or properly appraise the oral and documentary evidence before the court, which could have assisted him in reaching a just decision in this case.”

The Respondent depicted itself as haven formulated six issues for the determination of the appeal in its Brief of Argument. The issues read thus: –

“i. Whether the plaintiff/respondent substantially complied with the terms of the letter of credit exhibit ‘A’ as amended by exhibit ‘B’.

ii. Whether the letter of credit was confirmed.

iii. Whether the plaintiff/respondent is entitled to the award of $15,000

iv. Whether the plaintiff/respondent is entitled to the award of N10 millions damages for negligence in this case.

v. Whether the learned trial Judge was right in ordering interest of 10% in the judgment sum of $15,000.00

vi. Whether on the totality of the pleadings and evidence before the court the Plaintiff/Respondent is entitled to judgment.”

In its Brief of Argument the Respondent observed to the effect that the Appellant has ten grounds of appeal and formulated four issues therefrom. The Respondent urged this Court to strike out ground ten of the grounds of appeal. This is because the said ground borders on misdirection by the lower court and as the particulars of the misdirection are not stated. That instead of setting out “particulars of misdirection”; what the Appellant set out are “particulars of error”. In the aid of its stance, the Respondent relied on Order 6 Rule 2(2) of the Court of Appeal Rules 2007 and the cases of Okumodi v. Sowunmi (2004) 2 NWLR (Pt. 856) 1; and “Atuyeye v. Ashamu (1987) part 49 page 267” (as cited). The Respondent urged this Court to strike out paragraph 3.04 on pages 11-13 of the Appellant’s Brief of Argument for being incompetent as it appeared that the fourth of the issues formulated for the determination of the appeal by the Appellant and argued thereunder and which is tied to ground eight of the grounds of appeal subsumed ground ten of the grounds of appeal (which has no issue of its own for determination).

In its Reply Brief the Appellant in turn set out to canvass argument in relation to what it termed “fundamental defects in the Respondent’s Brief”. Responding specifically to the Respondent’s complaints regarding its issue 4, the Appellant submitted that the same were misconceived and erroneous.

The Appellant submitted that its issue 4 arises from and relates to both grounds eight and ten of the grounds of appeal wherein the complaint is that of improper appraisal of evidence; a complaint which touches on weight of evidence. That in the circumstances is not necessary for it (Appellant) to formulate separate issues from the said grounds eight and ten when one issue (namely issue 4) has covered them. That the method it has adopted enabled it to avoid proliferation of issues which parties have been admonished not to engage in. Mozie v. Nbamalu (2006) 11 MJSC 118 at 124 was cited in aid.

The Appellant submitted that in any event ground ten of the grounds of appeal contains copious particulars of misdirection notwithstanding that the said particulars of misdirection were headed “Particulars of Error”. The Appellant submitted that the particulars of misdirection are in compliance with Order 6 Rule 2 of the Court of Appeal Rules 2007 inasmuch as a misdirection is in itself an error as it entails that the decision/finding flows from or followed a wrong direction and cited in aid Umoru v. Zibiri (2003) 11 MJSC 109 at 116.

Finally, the Appellant submitted that heading, “Particulars of Error”, did not in any way mislead or prejudice the Respondent.

The position of the law regarding the purpose of reply brief and when it should be filed in an appeal is settled. Basically, a reply brief is necessary when an issue of law or argument raised in the respondent’s brief calls for a reply. And such a reply brief should be limited to answering the new point arising from the respondent’s brief. See HARKA AIR SERVICE (NIG.) LTD V. KEMOR [2011] All FWLR (Pt.591) 1402, wherein the Supreme Court dwelling on reply brief per Adekeye JSC; stated at page 1416 thus: –

“The appellant courts had in many decided cases laid emphasis on when a reply brief is necessary and what it should address. A reply brief is filed when an issue of law or argument raised in the respondent’s brief usually by way of a preliminary objection calls for a reply. Where a reply brief is necessary, it should be limited to answering any new points arising from the respondent’s brief. Although the filing of a reply brief is not necessary, where a respondent’s brief raises issues or points of law not covered in the appellant’s brief, an appellant ought to file a reply as failure to file one without oral reply to the points raised in the respondent’s brief may amount to a concession of the points of law or issues raised in the respondent’s brief. It is not proper to use a reply brief to extend the scope of the appellant’s brief or raise issues not dealt with in the respondent’s brief. A reply brief is not meant to have a second bite of the cherry ………”

See also GOODWILL & TRUST INVESTMENT LTD V. WITT & BUSH LTD (2011) ALL FWLR (PT. 576) 517.

Against the backdrop of the position of the law as stated above, I simply do not see how the Appellant in the instant appeal can in its Reply Brief properly raise any complaint regarding “fundamental defects” in the Respondent’s Brief of Argument, particularly, the issues formulated by the Respondent for the determination of the appeal, talk less of urging this Court to embark upon the striking out of the said issues. This is particularly so as the Rules of this Court do not provide for the filing of any further brief by a respondent in response to a reply brief. To accommodate the arguments canvassed by the Appellant in its Reply Brief calling for the striking out of any of the issues formulated by the Respondent and proceeding to do so on the basis of the argument in the Reply Brief, would in the circumstance tantamount to taking a decision on the issue in question without affording the Respondent the opportunity to be heard. One of the cardinal principles of law is that of fair hearing which mandatorily entails hearing the two sides in a dispute on the matter in question before taking a decision. Accordingly, I have discountenanced all the arguments in the Appellant’s Reply Brief regarding the issues for determination as formulated by the Respondent. The Appellant should have brought up the matter of any issue formulated by the Respondent that it has a grouse against, by a procedure that would give the Respondent the opportunity to respond to the grouse.

Now to the consideration of issue No. 4 of the issues formulated for the determination of the instant appeal by the Appellant; and the grounds of appeal which the Respondent has complained about.

I must first observe that the arguments of the Respondent clearly show the wisdom in the decisions of the appellate courts in which parties have been consistently admonished to marry or tie the issues which they formulate for determination in an appeal to the grounds of appeal from which the said issues are distilled. See DIAMOND BANK PLC V. MONANU [2013] 7 WRN 110 at 119. This, both parties to this appeal have glaringly failed to do, Indeed, one would have expected the Respondent who has obliquely raised the matter of the failure of the Appellant to marry its issues to the grounds of appeal, to have fared better but alas, it did not. Surprisingly, what the Respondent itself did was to have depicted that it has six issues for determination but only to end up arguing four issues for determination of the appeal thereby showing that it actually has only four issues to submit to this Court for its consideration. Perhaps, if the Respondent had set out to marry the issues it formulated for the determination of the appeal to the grounds of appeal in the first place, it would have seen right away the inappropriateness of conceiving the six issues it itemized in its Brief of Argument and only to jettison two of them in the long run.

Appeals in this Court are not argued and determined on grounds of appeal but on issues formulated from the grounds of appeal. The issues could be as formulated by the parties or where the Court finds the issues formulated by the parties to be inappropriate, upon the issues it formulates by itself. All that must be ensured is that whatever issue or issues that an appeal is to be resolved upon flows or flow from the grounds of appeal which grounds must also be grounded in the decision appealed against. See ODELUGA ANIAKOR (2012) 38 WRN 45 at 61 and 63 – 64.

I do not understand the Respondent to be complaining that any of the Appellant’s grounds of appeal does not flow from the decision of the lower court. Undisputedly, the Appellant has not formulated an issue from each of the ten grounds of appeal. This, the Appellant is entitled to do. This is against the backdrop of the position of the law that what a party in an appeal should not do is to formulate more issues than there are grounds of appeal. As rightly stated by the Respondent, the Appellant has formulated four issues for the determination of the appeal. By so doing the Appellant has glaringly decided to formulate an issue from one of more of the grounds of appeal.

Again, the law clearly allows for this. Haven regard to all that the Respondent has said as highlighted above, it is clear that the Respondent has not identified any of the four issues formulated by the Appellant that does not flow from any or an amalgam or combination of the grounds of appeal.

Inasmuch as this is the situation, I see no proper basis for the invitation extended to this Court by the Respondent, that paragraph 3.04 of the Appellant’s Brief of Argument should be struck out. The invitation in this regard is denied the Respondent. I will now proceed to determine the appeal upon the Issues as formulated by the Appellant. This is more so as the said issues sufficiently encompass those formulated by the Respondent.

APPELLANT’S ISSUE 1:

Dwelling on this issue, the Appellant submitted to the effect that the holding of the lower court to wit “In this case both Exhibits A and B are all (sic) irrevocable letters (sic) of credit. In Exhibit B the defendant was requested to add their confirmation which they did by stamping it”, is faulty and erroneous. This is because the L/C was not confirmed by it (Appellant) or at all. The Appellant submitted in the main that even though it impressed its date receipt stamp on Exhibit ‘B’, to indicate the date the document was received from IBWA, the said impression was not a confirmation of the L/C by it (Appellant) or at all as erroneously held by the lower court. Indeed, that it was a misconception on the part of the lower court to have held that the date receipt stamp impressed by it (Appellant) in the ordinary course of business on Exhibit ‘B’ (which came to hand unconfirmed) to indicate the date the said Exhibit was received, amounted to or was a confirmation of the L/C. That all that happened concerning Exhibit ‘B’ was that on receipt thereof the advising bank, IBWA without confirming the document passed same to it (Appellant) being the Respondent’s banker and that it in turn gave the said Exhibit ‘B’ to the Respondent also without confirming the same. Stating that the law is that he who asserts must prove, the Appellant submitted to the effect that the Respondent did not prove the fact of the confirmation of the L/C by it or any other Bank vis-a-vis the evidence it adduced before the lower court. Sections 135 and 136 of the Evidence Act; and the cases of Owie v. Ighiwi (2005) 3 MJSC 82 at 113; and Adedeji v. Oloso (2007) 3 MJSC 56 at 103, were cited in aid. The Appellant further submitted that it is a glaring case of grave error of misdirection on the part of the lower court to have anchored its finding that it (Appellant) confirmed the L/C on its date receipt stamp and that this error, which is baseless, has occasioned it (Appellant) a miscarriage of justice that has to be remedied by this Court. Onyekaonu v. Ekwubiri (1966) 1 All NLR 32 at 35; and Onobruche v. Esegine (1986) 2 SC 385 at 401, were cited in aid.

That this is more so as it (Appellant) adduced uncontroverted and uncontradicted evidence regarding who it is that should confirm the L/C which the lower court ought to have acted on but chose to ignore. Olujinle v. Adeagbo (1988) 2 NWLR (Pt.75) 238 at 255; Omoregbe v. Lawani (1980) 3-4 SC 108 at 117; and Ogunyade v. Oshunkeye (2007) 12 MJSC 157 at 116, were cited in aid. This Court was urged to resolve issue 1 in favour of the Appellant and to allow the appeal.

Dwelling on this issue the Respondent submitted to the effect that the lower court was right in holding that Exhibit ‘A’ as amended by Exhibit ‘B’, is irrevocable and confirmed UC. The Respondent said that Exhibit ‘A’ was L/C No. K12/3/73 dated 22/12/88 from the issuing bank in Germany addressed to IBWA (now Afribank) which is the issuing bank’s representative in Nigeria and through which the L/C was sent to the negotiating bank i.e. the Appellant. The Respondent submitted that the amendment effected to the L/C (i.e. Exhibit ‘A’) by telex message (i.e. Exhibit ‘B’) was that the issuing bank in Germany which had already confirmed the L/C now requested the negotiating bank (i.e. the Appellant) through its agent (i.e. IBWA) to add its own confirmation. And that the negotiating bank (i.e. the Appellant) did this by receiving the L/C, treating it officially and sending it to the beneficiary J.O. Imasuen and Sons Ltd (i.e. Respondent) for necessary action. That the Appellant haven received and treated the letter officially cannot now turn around to deny confirming same. The Respondent said that it is spurious for the Appellant to deny confirming the L/C otherwise the commercial purpose for which the system of confirmed irrevocable documentary credit has been developed in international trade will be defeated. Akinsanya v. UBA (1986) 4 NWLR (Pt. 35) 273 at 278, amongst others was cited to show that the crucial reason why the system was developed is to give to the seller an assured right to be paid before he parts with the control of the goods.

The Respondent also submitted that the lower court was right in ignoring the uncontroverted and uncontradicted evidence adduced by the Appellant to the effect that it was IBWA that was supposed to confirm Exhibit ‘B’ as the said Exhibit was addressed to the said bank. This is because the said evidence went to no issue as it was not in support of any pleaded fact. Gagarau v. Pashari (2006) 1 NWLR (Pt. 962) 521 at 566, was cited in aid. The Respondent urged this Court to uphold the finding of the lower court that the L/C was confirmed by the Appellant. It is also the stance of the Respondent that the Appellant has not shown that the finding is perverse and has occasioned it (Appellant) a miscarriage of justice and cited in aid, Adimora v. Ajufo (1988) 3 NWLR (Pt.80) 1; and Ebba v. Ogodo (1984) 1 SCNLR 372.

Dwelling on this issue in its Reply Brief, the Appellant said that the stance of the Respondent that the issuing bank confirmed the L/C is wrong. The Appellant submitted that in a L/C transaction, it is advising bank that could confirm the L/C on the instruction or at the request of the issuing bank and cited in aid Akinsanya v. UBA Ltd (supra) at 304. The Appellant stated to the effect that the Respondent admitted this much in paragraph 1 of its pleading and submitted to the effect that the stance of the Respondent that the lower court was right to have ignored the evidence it (Appellant) adduced to the effect that it was IBWA that was supposed to do the confirmation of the L/C was untenable. The Appellant submitted that the lower court by implication thereby ignored an established practice of international trade and this was unfair and unjust. This is more so as the evidence adduced by it (Appellant) on this aspect of the case was uncontroverted and uncontradicted and urged this Court to rely on same. Obimiami Brick & Stone (Nig) Ltd v. A.C.B. Ltd (1992) 3 NWLR (Pt.229) 260 at 294 and 303, was cited in aid.

The Appellant also submitted that the Respondent clearly deviated from its case at the lower court in alleging albeit erroneously that it was the Appellant that confirmed the L/C when the L/C was never confirmed by any bank. This is because the Respondent did not allege in its pleading or evidence given by its witnesses that the issuing bank confirmed the L/C. Cases considered to be relevant were cited in aid. The Appellant further submitted that the point that the issuing bank in Germany confirmed the L/C was a fresh one being raised in the appeal by the Respondent without first procuring the leave of this Court or that of the lower court and cited in aid, Ejiofodumi v. Okonkwo (1982) 11 SC 74 at 93 amongst others. This Court was therefore urged to discountenance the fresh issue or point.

For the proper resolution of this issue, I consider it pertinent to avert to some trite principles of law. Authorities have consistently held to the effect that “pleadings” are summary of the facts of a case that must be served on an opponent to enable him have notice of facts that will be in contention at the hearing. Hence authorities have also consistently held to the effect that the basic purpose or function of “pleadings” is to avoid springing surprises on the other party; accordingly parties are bound by their “pleadings” and must not go beyond what they have pleaded in their evidence, as doing this will render evidence so given, to be in respect of a non-issue, and liable to be struck out or discountenanced by the court. See AGBOOLA V. UBA PLC (2011) 45 NSGQR 335 at 358; ALIBO V. OKUSIN [2010] All FWLR (Pt. 529) 1059 and ANAMBRA STATE ENVIRONMENTAL SANITATION AUTHORITY V. EKWENEM (2009) 40 NSGQR 51 at 72. In other words, the issues that call for resolution in a case being tried on pleadings are circumscribed and fixed by the pleadings of the parties before the court and parties are to adduce evidence in relation thereto only.

It is also settled law that it is the plaintiff who brings a suit before the court that also primarily nominates the issues for decision in the case. See LONGE V. FIRST BANK OF NIGERIA PLC [2012] All FWLR (PT. 525) 258; and NKUMA V. ODILI [2006] All FWLR (Pt. 313) 24. This being the situation, all that a defendant need do, is to resist the plaintiffs claims on the facts pleaded. It is not for a defendant to set up facts which would convey that he is not just setting up a defence to the plaintiff’s suit but setting up a new case of his own. A defendant is only permitted to do this, when he is setting up a counter-claim. See DIAMOND BANK PLC V. MONANU (supra) at 122 – 123 and 125.

A trial court is no doubt obligated to decide issues submitted to it by the parties. It must however be noted that it is only in respect of matters upon which parties have properly joined issues on the pleadings, in a trial conducted upon pleadings, that a court has the bounden duty to decide. Hence the consideration by appellate courts of the pleadings of the parties in order to have a clear understanding of the nature of the dispute between the parties in an appeal and how the lower court approached the issue. See KOPEK CONSTRUCTION LTD. V. EKISOLA (2010) All FWLR (Pt. 519) 1035.

I have hereinbefore in this judgment, stated the gist or summary of the cases of the Respondent and the Appellant respectively, on their pleadings and also set out the reliefs claimed by the Respondent against the Appellant. It is in my considered view beyond dispute that the Respondent predicated its action against the Appellant on a L/C which it has alleged that the Appellant was obligated to honour/redeem as it were. This view is fortified by the averments in paragraphs 5, 6, 9 and 11 of the Respondent’s pleading which read thus: –

“Paragraph 5

The Plaintiff avers that even though all the relevant documents were presented to the Defendant, the Defendant did not pay the Plaintiff the contractual price of USD 8,606.25 or its naira equivalent of the furniture components Black Afara shipped.

Paragraph 6

The Plaintiff avers that because the Defendant refused and/or neglected to pay the Plaintiff the value of the components shipped the Plaintiff was unable to obtain liquid funds to finance shipment of the remaining components which is 17.05 cubic metres Black Afara Furniture components to the value of USD 6,393.75, even though the Plaintiff was willing and ready to do so.

Paragraph 9

The Plaintiff avers that as the Defendant failed to pay the Plaintiff the said sum of USD 8,606.25 the Central bank of Nigeria placed embargo on the Plaintiffs exports trades for reasons that it was unable to repatriate the export proceeds in the said transaction. The Plaintiff could not continue with the export and/or international trade. The letter dated 14/3/90 written by the Defendant to the Plaintiff to the effect would be founded upon by the Plaintiff at the trial of this action.

Paragraph 11

The Plaintiff avers that on 8/2/94 the Plaintiff through his Solicitors, J.E. Legbedion & Co. wrote a letter to the Defendant drawing its attention to its liability to honour the Letter of Credit as regards paying the Plaintiff the value of the goods shipped. The Defendant through its Solicitors replied that the Defendant was not negligent in not paying the Plaintiff. The Plaintiff will found on the said letter and Defendant’s reply dated 3/3/94 at the trial of this action. The shall rely on letter dated 11/5/94 from the Executive Director (States Banking Operations) Lagos in reply to Plaintiffs letter dated 8/2/94. A copy of Plaintiffs letter was sent to the Chairman, Board of Directors of the Defendant Company.”

The details of the L/C which the Respondent is alleging that the Appellant has failed to honour/redeem as it were; are given or disclosed in paragraphs 1 and 2 of the Respondent’s pleading. The averments therein read: –

Paragraph 1

The Plaintiff avers that consequent upon an agreement reached between J.O. Imasuen & Sons Nigeria Limited and Messrs. Tropenhelz Agentur for the shipment of furniture components 40 M3 Black Afara to the value of USD 15,000 a confirmed and an irrevocable Letter of Credit No. R.12/373 dated 22/12/88 was issued by Badische Kommunale Landesbank Karisruhe also known as SUEDWEST BEUTSGHE LANDESBANK KARLESEUHE to International Bank for West Africa Limited. Lagos negotiable by First Bank of Nigeria Limited on the authority of Messrs. Tropenhelz Agentur of 7519 Epingen-Muehiback West Germany (now Germany) in favour of J.O. Imasuen & Sons Limited Sawmillers of 61, Akpakpava Road, Benin City, Nigeria. The said Letter of Credit which was forwarded to the Plaintiff by the Defendant by letter dated 10/2/89 would be relied on and founded upon at the trial of this action.

Paragraph 2

The Plaintiff avers that the said Letter of Credit was amended by telex message dated 2/2/89 in which the expiring date of the Letter of Credit was extended to 15/3/89. The presentation of the shipping documents must be within 21 days after Bill of Lading date but within the validity of the Credit. The said telex message would be founded upon at the trial of this action.”

(Bold and Underline provided by me for emphasis).

Given the facts of the instant case as hereinbefore narrated and particularly haven regard to the averments in the Respondent’s pleading as re-produced above, and which the Appellant clearly did not admit in its pleading, it become obvious in my considered view, that the lower court was duty bound to resolve the primary questions or issues as to whether or not (i) there was a valid irrevocable and confirmed L/C upon which the Respondent hinged its case; (ii) who confirmed the L/C; and (iii) who is liable on the L/C.

It is indisputable that the lower court in its judgment saw that one of the issues nominated by the Respondent for its decision was as to the nature or type of L/C in issue in this case, and whether or not it was confirmed. This much is clear from the finding of the lower court concerning the L/C at page 108 of the record. The court stated thus: –

“In this case, both Exhibit (sic) A and B are all irrevocable letters of credit. In Exhibit B, the defendant was requested to add their confirmation which they did by stamping it….”

The lower court made the findings re-produced above, after it had captured the facts that case is in respect of an international business transaction that took place since 1989 and that the Respondent entered into a business transaction with a German company Tropenhelz Agentur, to supply them with components of Black Afara worth $15,000 which was based on Exhibit “A”, the L/C. In the judgment the lower court clearly averted its mind to the parties involved in an international sale of goods to be financed by means of a confirmed L/C (such as it stated that the instant case involved) and showed that it was guided in all it had stated by the cases of Akinsanya v. UBA Ltd (supra) and UBN Plc v. Sparkling Breweries Ltd.

It was upon the findings as hereinbefore re-produced that the lower court based the other findings it made in the case and particularly in finding the Appellant liable regarding the monetary claims made by the Respondent in respect of “both the shipped and unshipped” furniture components.

The case of AKINSANYA V. UBA (supra) which the lower court relied upon in its judgment, glaringly dealt amongst others, with international commercial credit based on documents. In the case; Eso, JSC; disclosed that in UCM v. Royal Bank of Canada (1983) AC 196, Lord Diplock stated that a contract for international trade consists of four parts or four separate contracts. The First Contract is the underlying contract for the sale of the goods in question. In this contract, only the Buyer and Seller are involved. That without this underlying contract, the other three contracts involved in international trade will not arise. The Second contract is between the Buyer and his Bank known as the issuing bank. The Third Contract is between the issuing bank and the confirming bank. The Fourth Contract is between the confirming bank and the seller. See also the case of NASARALAI V. ARAB BANK [1986] 4 NWLR (Pt. 33) 409 at page 444 where Oputa, JSC; gave an analysis of the system of documentary credit as it applied in a situation where a Nigerian company was the importer of rice from overseas.

Applying the analysis set out by Oputa, JSC; to the facts pleaded by the Respondent in paragraph 1 of its pleading, its becomes obvious that the Appellant was never alleged by the Respondent to have been the issuing bank and/or the confirming bank of the L/C. What the Appellant averred concerning the Appellant is that the L/C was issued by the banker of the German company – Tropenhelz Agentur (i.e. buyer) to IBWA and “negotiable by the First Bank of Nigeria Limited on the authority of the said German Company Tropenhelz Agentur (i.e. buyer).

Exhibit “A” is the L/C (which as pleaded and testified to by a witness of the Respondent), the telex message of 2/2/89 amended. On its face the Exhibit discloses that it is addressed to IBWA. The Exhibit which shows clearly that it is from Badische Kommunale Landesbank Karisruhe declared that “We open herewith our irrevocable documentary credit No. K 12.373 for USD 15,000 (MAX) in favour of J.O. Imasuen E Sons Nig. Ltd” (i.e. Respondent). Towards the end of the Exhibit, it is stated thus: –

“Request you to notify the credit to the beneficiary through First Bank of Nigeria Ltd., Ring Road, Benin City without adding your confirmation…”

The lower court set out the content of Exhibit “B” at pages 106 – 107 of the record. I have myself pursued the Exhibit. Just like Exhibit “A”, Exhibit “B” is expressly addressed to IBWA Ltd, Lagos. It clearly shows that it is from Suedwest Deutsche Landesbank Karleseuhe. It is also clear therefrom that the sender was communicating to the addressee (i.e. IBWA) the amendment made to the irrevocable documentary credit No. K12.373 (i.e. Exhibit “A”) opened in favour of the Respondent, by the order of the German company with which the Respondent had a business transaction. There is no doubt that Exhibit “B” amended Exhibit “A” amongst other to the effect that “We request you to notify …… and to add your confirmation”.

It is clear that it was in the course of evaluating these two Exhibits that the lower court made the findings to the effect that both Exhibits “A” and “B” are irrevocable L/Cs and that the Appellant was requested to add its confirmation which it did by stamping it.

It is settled law that an appellate court is eminently in as good a position as the trial court to evaluate the documentary evidence upon which the trial court based its decision when there is a complaint in the appeal that a finding made by the lower court is not justifiable by the documentary evidence it relied upon in making the finding. See BFI GROUP CORPORATION V. BUREAU OF PUBLIC ENTERPRISES (2012) 18 NWLR (Pt. 1332) 209 at 236; and AYUYA V. YONRIN [2011] All FWLR (583) 1842 at 1863 – 1864.

Having painstaking perused Exhibits “A” and “B”, I definitely cannot fault the finding of the lower court to the effect that the L/C upon which the Respondent has predicated the instant action is indeed “an irrevocable L/C”. This much is clear ex facie Exhibits “A” and “B” and the lower court certainly did not show itself as acting on any other evidence in coming to the conclusion that “both Exhibit (sic) A and B are all (sic) irrevocable letters of credit”.

I am however at a total loss to appreciate how the lower court came to the conclusion that the Appellant was requested to add its confirmation to Exhibit “B” and that it did this by stamping it. This is particularly so as neither of the Exhibits was addressed to the Appellant. The only assignment as it were, given the Appellant concerning the L/C, is as contained in Exhibit “A” and it is that the Appellant should assist in notifying the Respondent (the beneficiary) of the L/C. Nothing else concerning the L/C was required of the Appellant. To the extent that this aspect of Exhibit “A” was not amended by Exhibit “B”, and as Exhibit “B” in my considered view never called on the Appellant to confirm anything concerning the L/C, it is not difficult to appreciate that all that the Appellant did by affixing its date stamp on Exhibit “B”, was only to show for record purposes the date of the receipt by it (Appellant) of the document, and to have thereafter forwarded it to the Respondent under the cover of its (Appellant) letter tendered through PW1 and marked Exhibit “A1”.

Certainly there is nothing in Exhibit “A1” suggestive that the Appellant confirmed the L/C (i.e. Exhibit “B”). Ex facie, the said Exhibit “A1” simply shows the Appellant as forwarding “Irrevocable Letter of Credit No. K. 12.373 for USD 15,000” to the Respondent for its adoption (which in my considered view meant nothing more than acceptance or approval). The Appellant never suggested that it was forwarding to the Respondent an irrevocable L/C confirmed by it and/or IBWA which forwarded the L/C to the Appellant in the first place. The bottom line is that Exhibit “B” ex facie is an unconfirmed irrevocable L/C; hence the instruction therein “… and to add your confirmation”. The instruction “… and to add your confirmation” clearly can only be to the addressee of Exhibit “B” (i.e. IBWA) and this must be so as it was the same bank (i.e. IBWA) which was in Exhibit “A” instructed thus: “Request you to notify the credit to the beneficiary through First Bank of Nigeria Ltd., Ring Road, Benin without adding your confirmation.” (Bold and Underline provided by me for emphasis.) The instruction in Exhibit “B” that now required the adding of confirmation a fortiori must be to the addressee of Exhibit “A” which was initially directed not to add its confirmation and which addressee is the same as in Exhibit “B”. From all that has been said it is my considered view that it has been more than sufficiently demonstrated that the lower court did not evaluate Exhibits “A”, “A1” and “B”, properly and that its finding to the effect that the Appellant was in Exhibit “B” requested to add its confirmation and which it did by stamping, is not only belied by the very Exhibit “B” but has also been shown to be wrongful evaluation of the aforementioned Exhibits “A”, “A1” and “B”.

It is not the case of the Respondent that the Appellant was instructed to add its confirmation to Exhibit “A” and candidly I do not think that it is even the case of the Respondent on its pleading that the Appellant was directed by any one or is under any legal obligation to it (Respondent) to have added its confirmation to the L/C (i.e. Exhibit “A”) as amended by Exhibit “B”. Be that as it may.

The position of the law is that oral evidence will not be allowed to vary the content of a document. It is also the position of the law that documentary evidence being permanent in form is more reliable than oral evidence and is used as a hanger to test the credibility of oral evidence. See CAMEROON AIRLINES V. OTUTUIZU [2011] All FWLR (Pt.570) 1260 at 1277; CIVIL DESIGN CONSTRUCTION (NIG.) LTD V. SCOA (NIG.) LTD [2007] ALL FWLR (Pt.363) 1; and IKEM V. VIDAH PACKAGING LTD (2011) Pt.601 1476.

The lower court in coming to its finding that in Exhibit “B” the Appellant was requested to add its confirmation which it did by stamping it, did not disclose itself as relying on the viva voice evidence of any witness that it accepted and believed. In any event I am in no doubt haven regard to the primacy of documentary evidence as stated above, that any viva voce evidence that went to show that the Appellant confirmed the L/C, simply because it affixed on it its date stamp must give way to the proper evaluation of Exhibit “B” that has been undertaken in this judgment.

The fact of the confirmation of a L/C is not one that is oft shrouded in mystery. In Chitty on Contracts: Twenty-Seventh Edition Volume II Specific Contracts at paragraph 33-327 on page 349 it was stated thus concerning “purpose of credit”: –

“The expansion of international trade in the last 150 years has necessitated the development of bankers’ commercial credit. Its function is to finance contracts of sale of goods, where the delay between delivery on board and destination is likely to be substantial. The inherent difficulty of overseas transaction are aggravated by the reluctance of both sides the seller and the buyer to tie up capital during shipment. Merchants have accordingly, and increasingly since the First World War, availed themselves of the accommodation facilities offered by bankers and in some cases by commercial houses which in return for an agreed commission furnish credit the credit that the merchants themselves are usually unable or unwilling to afford.”

Later, on the same page and dwelling on parties involved in a credit transaction it was brought out most clearly that it is the buyer that causes its/his own bank to open a L/C and that the buyer’s bank is known as the issuing banker. Also it was brought out very clearly that as the buyer’s bank i.e. the issuing banker in most cases carries on its business in the buyer place of abode, the issuing banker frequently engages another bank at the seller place of business and instructs such a bank to notify the seller of the opening of the credit and to make payment against document. This second bank is known as the intermediary or correspondent banker. In paragraph 33-345 at pages 357-358 it is stated concerning “confirmed and unconfirmed credit” thus: –

“Whether a commercial credit is confirmed or unconfirmed depends on the role assumed by the correspondent banker. If the correspondent banker is merely instructed by the issuing banker to notify the seller about the opening of the commercial credit and to accept on behalf of the issuing banker, a tender of documents complying with the terms of the credit, the correspondent banker assumes in such cases, the role of an “advising banker”, and the commercial credit is unconfirmed on the part of the correspondent banker, although it may contain an undertaking of the issuing banker and thus irrevocable. If at the instruction of the issuing banker, the correspondent banker confirms the credit i.e. adds to the promise of the issuing banker an undertaking of its own to accept or negotiate a draft or to pay the amount of credit to the seller against conforming documents, the correspondent banker becomes a confirming banker and the commercial credit is a confirmed credit. In practice the correspondent banker is asked to confirm a credit only if it is irrevocable. In an “irrevocable and confirmed credit” the seller obtains an undertaking of both the issuing and the correspondent banker.”

(Bold and Underline provided by me for emphasis).

It would appear clear from what has been re-produced above, that an irrevocable L/C may be unconfirmed and that it is only where the correspondent bank which is basically an advising bank, adds its confirmation to the promise of the issuing bank that the correspondent bank becomes a confirming bank and the L/C thereby becomes a confirmed L/C. The implication of an irrevocable but unconfirmed L/C is that the seller under the contract of sale did not deem it necessary to have, or could not obtain the agreement on the part of the buyer to add the confirmation of an advising/correspondent bank.

Against the backdrop of all that has been said, it is in my considered view most glaring that though the finding of the lower court that both Exhibits “A” and “B” are irrevocable L/Cs cannot be faulted as it is eminently correct ex facie the Exhibits, the finding that the Appellant was requested to add its confirmation to Exhibit “B” and that the Appellant did this by stamping it, is clearly wrong haven regard to Exhibits “A”, “A1” and “B”, tendered by the Respondent in the proof of its case. Haven regard to Exhibits “A”, “A1” and “B” it is clear as crystal that on the showing of the Respondent, the L/C upon which it predicated its case is an irrevocable but unconfirmed L/C. In the pleading of the Respondent it was averred to the effect that IBWA was the representative of the buyer, i.e. the German company in Nigeria and PW1 testified in this regard. It was never alleged by the Respondent that the Appellant was the confirming bank in respect of the L/C. In any event it would have been incongruous to so allege or suggest when both Exhibits “A” and “B” were specifically addressed to IBWA. On the showing of the Respondent, I therefore find that the L/C upon which the Respondent has predicted its case against the Appellant is an irrevocable but unconfirmed one. The Appellant by having been requested to inform the Respondent of the L/C was no more than a correspondent/advising bank but never became a confirming bank as the issuing bank never instructed the Appellant to confirm the L/C talk less of the Appellant haven confirmed it. In the circumstances the finding of the lower court that the Appellant was requested in Exhibit “B” to add its confirmation and which it did by stamping it, is very wrong and undoubtedly perverse. A court is always expected to arrive at the correct decision or finding on the evidence before it, and a preserve decision/finding certainly and indisputably cannot be said to have any basis in the evidence from which it has been made. The finding made by the lower court that the Appellant confirmed the L/C is accordingly set aside. Flowing from all that has been said is that issue 1 is resolved in favour of the Appellant and against the Respondent.

APPELLANT’S ISSUE 2:

By this issue, the Appellant is questioning the correctness of the monetary awards made by the lower court regarding the furniture components upon the basis that the Respondent in any event acted outside the terms of the L/C or did not comply with the terms of the L/C it relied upon, in the instant case and a fortiori cannot rightly found its claims upon the said L/C. In elaborating on this issue, the Appellant made the point amongst others that the Respondent not only shipped the goods on 5/4/89 but that it presented the shipping documents to it on 25/4/1989 and that there was evidence in this regard before the court.

Dwelling on this issue, the Respondent submitted that it is not true to say that the shipping documents were presented late to the Appellant. This is because Exhibit ‘A’ – the L/C provides inter alia “Documents to be presented within 21 days after Bill of Lading date within the validity of the credit”. The Respondent stated that the bill of lading issued it by the carrier of the goods is dated 5/4/89 and that the shipping documents were presented to the Appellant on 25/4/89. In the premise, the Respondent stated that the presentation of the shipping documents to the Appellant was within time.

The parties are ad idem that transactions based on a L/C (which the lower court rightly found to be irrevocable) must comply with the terms stated therein. This much is clear in any event from the case of Akinsanya (supra) cited by the parties in their respective Briefs of Argument and also by the lower court in its judgment.

I have not bothered to set out copiously the submissions of parties in respect of the issue under consideration as I think that it will suffice to refer to the pleadings of the Respondent for the purpose of resolving the issue. In paragraphs 2 and 3 of its pleading, the Respondent averred to the effect that the expiry date of the L/C was extended to 15/3/89; and that it made partial shipment of the furniture components by bill of lading dated 5/4/89; and that it presented all the shipping documents and all of which were in conformity with terms and conditions of the L/C to the Appellant on 25/4/89. Though PW1 in his evidence-in-chief said that the goods that made up the partial shipment undertaken by the Respondent were sent to Warri before 15/3/89, he would appear to have made it clear that it was on 5/5/89 the goods were placed on board a ship. The witness thereafter tendered copies of the shipping documents as well as the covering letter under which they were sent to the Appellant by “avia” on 25/5/89. The documents were admitted without objection and marked Exhibits C – C7. Under cross-examination the witness stated that the goods were shipped on 5/4/89 and maintained that the shipment was not late. On his own part PW2 under cross-examination not only maintained that he complied with the terms of the L/C but was also very emphatic that the goods were shipped on 15/3/89 and not 5/4/89.

Haven, regard to the evidence it adduced through its witnesses, the Respondent would appear to believe that it complied with the terms of the L/C. As stated by the Respondent and eloquently supported by Exhibit “B” the expiry date of the L/C which was initially 15/1/89, as stated in Exhibit “A” was extended to 15/3/89. Indeed, Exhibit “B” aside from stating that the date and place of expiry of the L/C is “15th March, 1989 at Benin” also expressly stated that “shipment from Benin not later than 15/3/1989 to Antwerpen”.

Despite the inconsistency in the evidence of PW1 and PW2 regarding the date when shipment of the goods was made, it would appear that the actual date this was done was clearly established by Exhibit C2 tendered by the Respondent through PW1. This is against the position of the law to the effect that where there is documentary evidence on a matter such evidence is the best proof of the issue in dispute; Exhibit C2 is undoubtedly a copy of the bill of lading pleaded by the Respondent in paragraph 3 of its pleading. Bill of Lading performs three separate functions, namely, it is evidence of the terms of a contract of freight; it is evidence of the shipment of goods; and it is evidence that the holder has the right of to claim possession of the goods it represents and that in certain circumstances have the property therein; that is it a form of evidence of title. See AWOLAJA V. SEATRADE G.B.V. (2002) 4 NWLR (Pt. 758) 520. See also Black’s Law Dictionary. Ninth Edition at page 188 and Chorley and Giles Shipping Law (8th Edition) page 178. Exhibit C2 therefore not only sufficiently established the fact that the partial shipment made by the Respondent was made on 5/4/89 as testified to by PW1 under cross-examination, but also that the shipment was made after the expiry date of 15/3/1989, as stipulated in Exhibit “B” which amended Exhibit “A”.

In its Brief of Argument, the Respondent in apparent reliance on the un-amended provision of Exhibit “A” relating to the time frame within which shipping documents must be presented; submitted that the shipping documents were presented to the Appellant within time. This is against the backdrop of the facts that the partial shipment was made on 5/4/89; while the shipping documents were presented to the Appellant on 25/4/89. The clause of Exhibit “A” which the Respondent relied upon reads: “DOCUMENTS TO BE PRESENTED WITHIN 21 DAYS AFTER B/L DATE BUT WITHIN THE VALIDITY OF THE CREDIT.” (Bold and Underline provided by me for emphasis). In its Brief of Argument the Respondent (whether deliberately or inadvertently) overlooked the word “BUT” as reflected in the clause reproduced above. I must however observe that the purport of the clause reproduced above was correctly stated in paragraph 2 of the Respondent’s pleading hereinbefore re-produced. The provision of the clause of Exhibit “A” as amended by Exhibit “B” relied upon by the Respondent in its stance that the shipping documents were presented to the Appellant within time clearly stipulates that the 21 days for the presentation of shipping documents must be within the validity of the L/C. I am therefore of the settled view, that the lower court had before it clear evidence from Exhibits “A”, “B” and “C2” that the partial shipment made by the Respondent was made after the validity of the L/C, on 15/3/89. I do not see how it can therefore be sensibly argued as it has been done by the Respondent that the presentation of the shipping documents which was done on 25/4/89, was done within time when both the shipment and the presentation of the shipping documents were done after the expiration of the validity of the L/C as stipulated therein.

The case of Akinsanya (supra) eloquently shows that the terms and conditions provided or set out in a L/C bind the parties. This is so whether or not the L/C is irrevocable and confirmed.

I have hereinbefore found the lower court to be correct in its finding that the L/C in the instant case is irrevocable. I have however set aside the finding that the said L/C was confirmed by the Appellant and clearly stated that the L/C upon which the Respondent predicated its case is an irrevocable but unconfirmed one.

An irrevocable L/C is a definite undertaking by the issuing bank provided that the terms and conditions of the credit are complied with. It constitutes a contract between the issuing banker and the seller, and is unaffected by the terms of the contract of sale made between the buyer and the seller or the contract between the issuing bank and the buyer. An irrevocable L/C cannot be cancelled or amended and the bank is obliged to honour the seller’s draft if the agreed documents are made available to it.

The opening of an irrevocable L/C constitutes a bargain between the banker and the seller of the goods which imposes on the banker an absolute obligation to pay irrespective of any dispute between the buyer and the seller regarding the quality of the goods. The buyer cannot cancel the credit even where he claims that the goods are defective or that the seller is in breach of the contract between the two of them. An irrevocable L/C cannot be withdrawn by the issuing banker without the consent of the beneficiary and this is so, notwithstanding any definite instruction to that effect by the buyer.

The clear position of the law is also that though an irrevocable L/C creates a legally binding contract between the banker and the seller, where the L/C is unconfirmed, the contract is between the seller and the issuing bank. It is where the L/C is both irrevocable and confirmed that both the confirming and issuing banks are liable to the seller. This is why in practice, sellers would rather accept only irrevocable and confirmed L/Cs and the correspondent bank is asked to confirm a credit only if it is irrevocable. This is because the irrevocable/confirmed L/C is the best the seller can obtain in any transaction involving documentary credit.

Haven regard to all that has been said about an irrevocable L/C whether confirmed or unconfirmed, it would appear settled that though a L/C is a different species or kind of contract, some of the basic principles of contract still apply to a L/C, namely, that the issuing bank and the seller are bound by the terms and conditions of the L/C and that only the party saddled with the performance under a L/C can be properly called upon to perform as agreed. It is a cardinal principle of contract that a breach of a contract occurs when one of the parties in breach has acted contrary to the terms of the contract. See CAMEROON AIRLINES V. OTUTUIZU (supra) at 1291.

The lower court in its judgment averted its mind to the constituent contracts in a transaction involving an international sale of good to be financed by “means of a confirmed letter of credit”.

There is something called “cause of action” in law. It means the entire set of facts or circumstances giving rise to an enforceable claim. It includes all those things necessary to give right of action and every fact which is material to be proved to entitle the plaintiff to succeed. See SULGRAVE HOLDING INC. V. FEDERAL GOVERNMENT OF NIGERIA (2013) All FWLR (Pt. 659) 1050 at 1063.

There is no denying the fact that it was on the basis that the Respondent’s cause of action flowed from “a confirmed irrevocable letter of credit” that the lower court conveniently found that the Appellant was requested to confirm Exhibit “B” and that the Appellant did so by stamping it and which finding (i.e. that the Appellant confirmed Exhibit “B”) I have hereinbefore set aside. It is further apparent on the face of the judgment that it was on the basis of its finding that I have hereinbefore set aside, that the lower court proceeded to grant the Respondent its claims against the Appellant. In this regard, I consider it pertinent to re-produce some portions of the judgment. At page 109 of the record the lower court stated thus: –

“The Plaintiff is now left in a situation that the foreign buyer has collected his goods and did not send it (sic) back if he is not satisfied with the goods. The Bank has also refused to pay him his money. That cannot be the idea about letters of credit. As the name is irrevocable letter of credit, it means it cannot be revoked. And even if it can be revoked for some reasons, it has to be expressly stated. Which is not the case where the Plaintiff only learnt of it through the defendant’s lawyer when he protested, the non-payment of his money the bank has a duty to pay the Plaintiff and therefore I find the Bank liable for the 22, 95 cubic metres of black afara sent worth $8,606 and also for the balance which could not be sent as a result of the breach of contract which is worth $6,393.75 of 17.25 cubic metres.”

The lower court clearly never considered whether the Respondent which from clear evidence before it, acted in complete violation of the terms and conditions of the L/C in relation to the date of expiration of the L/C on 15/3/1989 vis-a-vis the date of partial shipment of the goods on 5/4/1989 and a fortiori the presentation of the shipping documents outside the period of validity of the L/C, can properly found its claims against the Appellant on the said L/C. This is against the position of the law that a person seeking to enforce his right under a contract must show that has fulfilled all conditions precedent and that he has performed all those terms which ought to have been performed by him. See BFI GROUP CORP. V. B.P.E. (supra) at 247. The reasoning of the lower court that “As the name is irrevocable letter of credit, it means that it cannot be revoked” clearly ignored the fact that the L/C on which the Respondent relied by its very tenor provided for or stipulated the date on which it would cease to be an agreement that could form the basis of any act by the Respondent. Indeed the reasoning of the lower court to the extent that an irrevocable L/C remains valid in perpetuity as it were, clearly ignores the fact that no business man so to say, would tie his fund down ad infinitum. It is therefore my considered view that to the extent that the Respondent conceived that it could maintain an action against the Appellant upon Exhibits “A” and “B” and at the same time furnished documentary evidence before the lower court eloquently showing that it did not act in compliance with the terms and conditions set out in the said Exhibits, it cannot properly be found to have established its entitlement to any remedy against the Appellant on the basis of the said Exhibits.

Aside from what I have stated above, and given my earlier finding that the L/C which the Respondent relied upon in any event is an irrevocable but unconfirmed one, as the Appellant was never a confirming bank in the respect of the L/C, it follows that the option the Respondent had was to have sought for its remedy from the issuing bank.

In consequence of all that has been stated above, the monetary awards totaling $15,000 made by the lower court in relation to both the shipped and unshipped furniture components on the basis of the irrevocable but unconfirmed L/C, have no factual and legal basis and are hereby set aside.

In the concluding part of its judgment, the lower court also ordered 10% interest to be paid by the Appellant on the $15,000 it awarded the Respondent from 25/4/1989. The lower court stated the basis for the order to be: –

“The total sum of $15,000 was missed by the Plaintiff by the defendants (sic) breach of contract. They are suppose (sic) to honour the agreement by paying the amount to the Plaintiff, as he has performed his own part of the contract.”

The conclusion I reached hereinbefore in relation to the monetary awards made by the lower court on the shipped and unshipped furniture components must necessarily or ipso facto apply to the interest ordered by the lower court on the total of the monetary awards that I have hereinbefore set aside.

Aside from this, it is clear that the Respondent conceded the fact that it never pleaded its entitlement to the interest granted it or indeed any form of interest in its pleading. Haven regard to the reasoning of the lower court in granting the interest it did to the Respondent, it is clear that the said interest on the award of $15,000, is better described as pre-judgment interest. The position of the law regarding claims for interest is that interest may be awarded by the court in two distinct circumstances, namely (i) as of right; and (ii) where there is a power conferred by statute to do so, in the exercise of the court’s discretion. Interest may be claimed as of right where it is contemplated by the agreement between the parties, or under a mercantile custom, or under a principle of equity such as breach of fiduciary relationship. See TEXACO OVERSEAS (NIG) UNLTD V. PEDMAR (2002) 13 NWLR (Pt. 785) 526; and I.T.B. PLC V. K.H.C. LTD (2006) 3 NWLR (Pt. 968) 443. It is also the law that where interest is claimed as a matter of right, the proper practice is to claim entitlement to it on the writ of summons and plead facts which show such an entitlement. However, as the statement of claim in law supersedes the writ of summons, even if interest is not claimed on the writ of summons, but facts are pleaded in the statement of claim and evidence given which show entitlement thereto, the court may, if satisfied with the evidence award interest. See DANIEL HOLDINGS LTD V. U.B.A. PLC (2005) 13 NWLR (Pt. 943) 533.

Clearly, as the Respondent never pleaded its entitlement to interest on the sums it claimed for both the shipped and unshipped furniture components, it follows that it cannot be successfully argued that the Respondent is entitled to the interest of 10% granted it by the lower court. It therefore follows that even if the total award of $15,000 had not been set aside, the award of 10% interest thereon would have been set aside as the grant of it has no root whatsoever in the pleading of the Respondent.

APPELLANT’S ISSUE 3:

Dwelling on this issue, the Appellant referred to the claims of the Respondent as set out in paragraph 17 of its pleading. The Appellant submitted that the award of general damages of N10 million to the Respondent in addition to the special damages of US $15,000, is erroneous and baseless. Firstly, this is because the Appellant was not instrumental to the embargo which, in any event, was purely an independent act of the Central Bank of Nigeria on which the Appellant has no control and/or authority whatsoever. The Appellant noted that the Central Bank of Nigeria which imposed the embargo was not a party to this case and the Respondent never sought to join it as a party to the suit. It is the stance of the Appellant that it was wrong of the lower court to have damnified it with such staggering general damages or any damages at all for the embargo imposed on the Respondent by the Central Bank of Nigeria. The Appellant submitted that the lower court overlooked the fact that it was through the Appellant’s representations to the Central Bank of Nigeria that the latter eventually lifted the embargo. The Appellant accused the lower court of haven based the award on irrelevant consideration. This Court was urged to interfere with the exercise by the lower court of its discretion which was based on irrelevant and/or extraneous consideration and cited in aid Solanke v. Ajibola (1969) NMLR 251 at 256.

Secondly, the Appellant submitted that the said award of general damages of N10 million was granted by the lower court to the Respondent gratuitously in that the Respondent did not claim any general damages “for delay in export business as a result of the embargo placed on him (sic) by the Central Bank of Nigeria”. This is particularly so as the Respondent offered no iota of evidence of any export business transacted by it apart from the one under the L/C in dispute in this case. The Appellant also stated to the effect that the award becomes more worrisome as the particulars and nature of the alleged delayed export business consequent upon the embargo and the damages suffered by the Respondent were neither pleaded nor proved by the evidence adduced by the Respondent. The Appellant stated the law to be that parties are bound by their pleadings and cited in aid Emegokwe v. Okadigbo (1973) 1 All NLR (Pt. 1) 379 at 382; and Obiminami Brick & Stone (Nig) Ltd v. A.C.B. Ltd (1992) 3 NWLR (Pt.229) 260 at 321. The Appellant further submitted that as the Respondent did not claim the relief of general damages “for delay in export business as a result of the embargo placed on him (sic) by the Central Bank of Nigeria…” the lower court lacked the jurisdiction to grant it the said sum of N10 million or any sum at all as general damages and cited in aid Ekopenyong v. Nyong (1975) 2 SC 71 at 81 – 82 Ndulue v. Ibezim (2002) 12 MJSC 137 at 154; and Afrotec Technical Services (Nig) Ltd. v. Mia & Sons Ltd (2001) 1 MJSC 37.

Thirdly, the Appellant submitted that the award of general damages by the lower court to the Respondent in addition to awarding it the special damages of US $15,000 amounted to double compensation. That the award being double compensation, is erroneous and unjustifiable; and cited in aid Ekpe v. Fagbemi (1978) 3 SC 209 at 217. That this is particularly so, as the award of the general damages is out of tune with the special damages awarded by the lower court. It is also the stance of the Appellant that the award of the general damages was arbitrary, excessive and punitive, the lower court haven failed to exercise its discretion judiciously and judicially. The Appellant stated that this was an appropriate case for this Court to interfere with the wrongful exercise of discretion by the lower court and to set aside the general damages and cited in aid Solanke v. Ajibola; and Ekpe v. Fagbemi (both supra). This Court was urged to resolve issue 3 in favour of the Appellant and to allow the appeal.

Dwelling on this issue, the Respondent submitted that the lower court properly exercised its discretion judicially or judiciously in awarding it the sum of N10 million as general damages. The Respondent stated that the lower court gave copious reasons for awarding the said sum as general damages and concluded that the Appellant was negligent in its duty to it (Respondent) as a customer. The Respondent stated that the reason why the Central Bank of Nigeria placed embargo on it from international trade was for failure to repatriate its export proceeds and referred to Exhibit “E” in this regard. It is the stance of the Respondent that it is the duty of the Appellant to repatriate the foreign proceeds from the issuing bank in Germany which was the customer of the buyer. That it was the Appellant that caused its (Respondent) peril in the transaction involved in this case.

The Respondent submitted that where a bank holds out itself to be professionally competent and skilled to carry out certain obligations involved in a transaction (i.e. Appellant in the instant case) and it shirks that responsibility, it is negligent prima facie in that it owed its customer a duty of care which it had shirked and cited in aid Agbonmagbe Bank Ltd v. C.F.A.O. (1966) SCNLR 367. The Respondent submitted that the award of $15,000 as special damages and N10 million as general damages by the lower court did not amount to double compensation. This is because the award is justified by its claims and in this regard referred to paragraph 17a and b, of its pleading. It is the stance of the Respondent that the Appellant has not been able to show that the lower court acted upon some wrong principle of law or that the amount awarded was extremely high as to be classified as an erroneous assessment of the damages and cited in aid, Shell Petroleum Development Company of Nigeria Ltd v. Tiebo VII (2005) 9 NWLR (Pt. 931) 439 at 448; and Shell Petroleum Development Company of Nigeria Ltd v. Okonedo (2008) 9 NWLR (Pt. 1091) 85 at 94 and 95. The Court was urged to resolve the Issue in favour of the Respondent.

It would appear glaring from the judgment of the lower that the award of N10m to the Respondent was based on the perceived negligence of the Appellant concerning how it handled the matter of the Respondent particularly as it relates to the shipping documents and not advising the Respondent not to ship the goods until the documents were rectified.

It would appear again that the lower court in addressing the issue of the alleged negligence of the Appellant shut its eyes to the fact that the Respondent itself did not comply with the terms and conditions of the L/C that formed the basis of the alleged negligence on the part of the Appellant. The documentary evidence before the lower court and which was furnished by the Respondent itself, showed that it was after the expiry date clearly agreed upon in the L/C, that the said Respondent shipped the goods it did on 5/4/1989 and thereafter made the shipping documents available to the Appellant. With evidence in this regard furnished by the Respondent itself, how then can the Appellant be accused of not advising the Respondent not to ship the goods until the documents were rectified? Surely, it is clear from the evidence placed before the lower court by the Respondent that it was after it had made the partial shipment that it presented the shipping documents to the Appellant. Indeed, it is my candid view that the manner in which the Respondent has presented its case against the Appellant shows a complete misapprehension of what a L/C involves. If the Respondent is suing the Appellant as being liable to pay it for the goods it shipped by virtue of the fact that it is under a legal obligation to do so under the L/C, as it confirmed it, then it cannot rightly place any negligence at the doorstep of the Appellant inasmuch as it (Respondent) did the shipment after the expiration of the validity of the L/C. On the other hand, if the case of the Respondent is that the Appellant did not timeously transmit the shipping documents to the issuing bank or advising/confirming bank, it has also shot itself in the leg by not making the shipping documents available to the Appellant 21 days after the bill of lading date but within the validity period of the L/C. Either way, the Respondent has patently failed to establish negligence against the Appellant haven regard to the evidence it adduced. Consequently, there is clearly no factual or legal basis to support the finding by the lower court that the Appellant was negligent regarding the matter of the L/C upon which the Respondent predicated its case and the award of damages of any nature and in any sum in favour of the Respondent and against the Appellant. Accordingly, the general damages of N10m awarded the Respondent must be and is hereby set aside.

In conclusion issue 3 is resolved in favour of the Appellant.

I do not see the need to specifically dwell any further on issue 4 as the complaint raised by the said issue has been dwelled upon in the consideration of the first three issues of the Appellant which have been resolved in its favour. Suffice; it to say therefore, that given the resolution of Issues 1, 2 and 3 in favour of the appellant, issue 4 is likewise resolved in favour of the Appellant.

In the final analysis, the appeal is meritorious and it succeeds. Haven set aside all the monetary awards made, by the lower court, the judgment of the said court delivered on 31/10/2003 is according set aside and the claims of the Respondent against the Appellant dismissed in their entirety.

Costs in the sum of N50,000,00 is awarded in favour of the Appellant and against the Respondent.

SIDI DAUDA BAGE, J.C.A(PRESIDED): I read in draft the lead Judgment of my learned brother A.O. LOKULO-SODIPE JCA. I entirely agree with him. I find that the appeal is meritorious and it succeeds. The Judgment of the lower court delivered on 31/10/2003 is also set aside by me.

I abide by the order as to costs contained in the lead Judgment.

TOM SHAIBU YAKUBU, J.C.A: I had a preview of the judgment just delivered by learned brother AYOBODE LOKULO-SODIPE, JCA.

I am satisfied and in total agreement with his exhaustive consideration of the issues in the appeal, such that I have nothing more useful to add to it.

I, too allow the appeal and abide by the consequential orders as well as that of costs, made by my Lord.

Appearances

C.D. BelloFor Appellant

AND

J.E. Legbedion with E.T. NegbenosaFor Respondent

 

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