The plaintiffs (two German companies) sued the defendants for breach of contract arising from two letters of credit (LCs) opened by the defendant bank at the in¬stance 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 uncon¬firmed 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 as follows:

In addition, interests were claimed thus: 11.5% per annum on DM540,000 from 1/5/1992-31/4/1995 (DM 186.300); 11.5% per annum 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 12th October, 1998, the learned trial judge dismissed the action against the 1st defendant/bank but found against the 2nd defendant and entered judgment as Follows:

The plaintiffs appealed the judgment. On 16th 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, 000.00 (Two thousand naira). The 1st defendant/bank and the plaintiffs have appealed from that judgment to this court: the 1st defendant/bank being the appellant while the plaintiffs are the cross appellants.

The appellant s contending that t s free from liability in the circumstances of this case and has raised three issues for determination thus:

The cross-appellants, in support of their cross-appeal, have raised one issue thus: