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  • Fortune Int’l Bank Plc. vs. Pegasus Trading Office
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  • 2004-03-22
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Fortune Int’l Bank Plc. vs. Pegasus Trading Office

FORTUNE INTERNATIONAL BANK PLC

V

PEGASUS TRADING OFFICE (GmbH)

APT ANLAGEN IMPORT-EXPORT (GmbH)

FIMSENOD HOLDINGS NIGERIA LIMITED

SUPREME COURT OF NIGERIA

IDRIS LEGBO KUTIGI, JSC ( Presided )

ALOYSIUS IYORGYER KATSINA-ALU, JSC

UMARU ATU KALGO, JSC

SAMSON ODEMWINGIE UWAIFO, JSC ( Read the Lead Judgment )

DENNIS ONYEJIFE EDOZIE, JSC

SC. 144/2001

FRIDAY, 30TH JANUARY, 2004

CONTRACT - Contract of guarantee - Parties thereto - Modes of operation of

DOCUMENT - Document or contract - Oral evidence - Whether can be admitted to contradict or vary same

DOCUMENT - Document or enactment - Proviso therein - Function of

EVIDENCE - Oral evidence - Whether can be admitted to contradict or vary a contract or document

PRACTICE AND PROCEDURE - Exhibit P13 in this case - Whether amounts to an agreement upon which the cross-appellants can found a cause of action against the appellant

STATUTE - Proviso in an enactment - Proviso therein - Function of


WORDS AND PHRASES - Proviso in an enactment - Function of

Issues:

1.             Whether the Court of Appeal was right in setting aside the judgment of the trial court and holding the appellant liable to the 1st and 2nd respondents for breach of contract under the two Letters of Credit.

2.             If the answer to (1) above is in the affirmative, whether exhibit D2 did not relieve the appellant of all/any liability and/or liabilities under the two Letters of Credit.

3.             Was the appellant obliged under exhibit P13 to pay any money to the 1st and 2nd respondents without further reference to the buyer - 3rd respondent?

Facts:

The plaintiffs (two German companies) sued the defendants for breach of contract arising from two letters of credit (LCs) opened by the 1 st defendant bank at the instance of the 2nd defendant in favour of the plaintiffs for the importation of dairy product known as “Royal Evaporated Milk”. The LCs were confirmed irrevocable up to 35% of their value. This meant that the amount involved was to be paid at sight. As to that, there is no dispute; the 35% cost of the goods was accordingly paid. The difficulty was with the 65% of the LCs which by description was confirmed irrevocable. The amount involved was to be paid by the 1st defendant/bank 90  days after presentation of documents to it. That amount was not paid hence the plaintiffs (the sellers of the goods) sued the 1st defendant bank ( the issuing bank) and the 2nd defendant (the buyer) claiming a total of DM576,663. In addition, interests were claimed thus: 11.5% per annum on DM540,000 from 1/5/1995 up to date of judgment; and 10% per annum from date of judgment until the settlement of the judgment debt.

On 12 October, 1998, the learned trial Judge dismissed the action against the 1st defendant/bank but found against the 2nd defendants. The plaintiffs appealed against the judgment. On 16 February, 2001, the Court of Appeal, Abuja Division allowed the appeal, set aside the judgment and entered judgment in favour of the plaintiffs against both defendants jointly and severally for the sum of DM540,000 and costs of N2,000.

Dissatisfied, the 1st defendant/bank and the plaintiffs have now appealed to the Supreme Court: the 1st defendant/bank being the appellant while the plaintiffs are the cross-appellants.