Respondent's claimed against the appellant at the Federal High Court:

Respondent's argued that in 1990, It received through its bankers New Nigeria Bank Plc, a telex of an Irrevocable Documentary Letter of Credit No. 16167/65626 from the appellant which said letter of credit had as its applicant C. I. E. Dubois Stockmans of Belgium, the appellant as the beneficiary and Krediet Bank N.V. of Belgium as the foreign bank which purportedly issued same; that by a letter dated 12/10/90 addressed to the respondent's banker which the respondent was copied, the appellant advised on and confirmed the authenticity of the telex establishing the letter of credit and requested for advising commission which was duly paid by the respondent exported Iroko furniture components to C. I. E. Dubois Stockmans in Belgium between the 30th November, 1990 and 30th December, 1990.

Respondent also claimed that by the terms of the letter of credit, the respondent's drafts for the value of the goods were to be paid on presentation of the relevant shipping documents to the appellant which the respondent duly submitted to the appellant but for which no payment was made. The respondent maintained that at the time the appellant forwarded the letter of credit and the letter of confirmation dated 12/10/90 the appellant ought to have known that the respondent would rely on them and would be induced thereby to export its goods upon the terms contained therein; that the appellant was under a duty to take care in making the said representations.

Upon service of the Court processes on the appellant, the appellant filed an application to strike out the respondent's suit on the ground that the trial court lacked jurisdiction. In its ruling, the trial court held that the suit was within the admiralty jurisdiction of the Federal High Court and dismissed the application.

Dissatisfied and aggrieved with the ruling, the appellant appealed to the Court of Appeal.