Breach of Contract: Bank May Pay N10b Damages

Efforts to settle out of court, a N10 billion breach of contract suit, brought by WTS Broadcast Limited against an old generation bank, has hit the rock as trial commence at a Lagos High Court, sitting in Igbosere.

Already, Justice Yetunde Adesola Adesanya has fixed June 9, 2015 for continuation of trial in the suit No: LD/45/2013, where the bank is expected to open its defence as the claimant had already closed its case at the last adjourned date.

The claimant through his lawyer, Chief Bolaji Ayorinde SAN, had sought the court for an order declaring that the conversion of the N4.5billion fund, released by the Debt Management Office (DMO), on behalf of the Nigerian Television Authority (NTA), for the benefit of the claimant as stated in the executed Memorandum of Understanding (MoU), attached and or annexed to the letter issued by the Debt Management Office dated September 7, 2010, by the defendant bank without the authority of the aforementioned parties, into a loan facility for the claimant is wrongful and unlawful as the said sum of N4.5billion was not a fund belonging to the defendant bank or its shareholders.

Besides, the broadcasting firm is asking the court for an order declaring that the conversion of the N5million in the project account of Nigerian Television Authority, meant for the upgrade and renovation of its equipment and deposited for the benefit of the claimant as stated in the executed MoU attached or annexed to the letter issued by the Debt Management Office, dated September 7, 2009, by the defendant bank without the authority of the aforementioned parties, is wrongful and unlawful as the said sum of N5million was not a fund belonging to the defendant bank or its shareholders or any of the statutory deposits in the name of the defendant bank, as same was specifically lodged by the NTA for the benefit and use of the claimant.

Specifically, the claimant is asking for an order directing the defendant bank to reverse forthwith all interest, management, insurance and facilitation fees on the purported N5billion loan facility allegedly granted to the claimant’s totaling N537,029,777,86 and any other charges by whatever name or description, as same represent profits and monies accruing and due to the claimant upon the successful performance of the contract dated September 17, 2009.

The firm sought an order of the court directing the defendant bank to immediately reverse and pay the sum of N7,373,958,00, deducted from the claimant’s account for the demurrage incurred as a result of the six months delay in clearing from the Nigerian Ports, Apapa, Lagos, equipments imported by the claimant and which delay arose specifically as a consequence of the defendant bank misplacing the Bill of Lading covering the importation.

The claimant also sought the court for an order directing the defendant bank to reverse and pay back into the claimant’s account, the sum of N24million, being payment to Messer Temix for local installation and accommodation, insurance and any interest, management or facilitation fees deducted from the N100million loan facility granted to the claimant as aforesaid.

The firm asked the court to award general damages in the sum of N5 billion payable from the date of the purported loan and interest on all amount at 25% interest rate, in accordance with Central Bank of Nigeria, until judgment is delivered and 10% interest rate until liquidation as compensation for the claimant.

The claimant, in its witness statement on oath, alleged that sometimes in 2009, the Federal Government of Nigeria was to host the FIFA under 17 Football World Cup Tournament in several cities across Nigeria.

The firm bided for the contract and was awarded to upgrade and refurbish the broadcasting equipment’s of the Nigeria Television Authority to be able to cover the tournament.

The claimant immediately upon the initial payment of 15per cent of the contract sum, as provided in the agreement, commenced work by dismantling the existing equipment’s of the NTA and sending same abroad, for commencement of work by its project partners, Messer WTS United Kingdom.

After the execution of the agreement dated September 17, 2009, the NTA lost the bid to host the FIFA Under 17, World Cup Football Tournament but, despite the loss of the bid, the Federal Government, through the NTA, remained desirous of and indeed, still continue to engage the claimant in the contract to upgrade, refurbish and renovate NTA broadcasting equipment.

The 15 per cent payment made by the NTA to the claimant was paid into the claimant’s account with First City Monument Bank, but parties agreed in the addendum dated July 22, 2010 to change the account to be used for the project to the claimant’s account with the defendant bank.