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CaseLaw
CaseLaw
The Appellant is a commercial bank where the Respondent in the normal course of business kept a current account. In September, 1991, the Respondent applied to the Appellant for N5 Million Nigerian Export and Import Bank (NEXIM) revolving loan for a period of three years to enable the Respondent purchase and export Cocoa to its foreign customer namely MINSTREL LIMITED of the UNITED KINGDOM. The NEXIM credit facility is grantable to an importer or exporter of goods through a commercial bank. The facility is designed to promote trade in the non-oil sector. The interest rate charged on the NEXIM loan is lower than the rate charged by commercial banks. The scheme is only available to an importer or exporter, by an application to a commercial bank. The commercial bank processes the application and sends it to NEXIM for approval. The commercial bank, however, remains primarily responsible to repay the loan to NEXIM. Therefore the commercial bank has the duty to protect itself and to ensure that an applicant for the NEXIM credit will not default in repayment. So there must be an agreement between the applicant and a commercial bank.
The appellant processed and secured N6 Million NEXIM LOAN for the use of the Respondent. It is common ground that the Appellant was not merely an intermediary to this loan, but was the primary obligor to NEXIM. In the event of any default the Appellant is duty bound to refund the loan plus interest to NEX1M. According to the Appellant, the Respondent's application for the loan Exhibit P5 was replied in Exhibit P7 a letter dated 10/1/1992 in which the Appellant conveyed the approval of the application with conditions which the Respondent must fulfil before it could utilize the facility. The Respondent on the other hand insisted that Exhibit P6 an internal Memorandum unsigned and emanating from the Head office of the Appellant and addressed to its Akure branch Controller was the reply to its application. The learned trial Judge found that Exhibit P6 concluded the loan agreement and gave judgment in favour of the Respondent, He also allowed the counter-claim. The Appellant's Appeal to the Court of Appeal was dismissed. The Court of Appeal however reduced the award of damages made by the trial Judge in the Appellant's favour from N6M to N389.947.09. The Appellant further appealed to the Supreme Court.