The High Court of Lagos State presided over by Justice Oyindamola Ogala, has ordered Heritage Bank Plc to pay N10 million in damages to a company called Shield Petroleum Nigeria Limited. This decision has been upheld by the Lagos Division of the Court of Appeal.
In her ruling given on January 19, 2018, Justice Oyindamola Ogala ordered the financial institutions to pay the plaintiffs N10 million as general damages for breach of contract in a complaint filed by Shield Petroleum Nigeria Limited and Bank of Nigeria against Heritage banks.
Other members of the panel, including Justice Haruna Simon Tsammani and Justice Mahmoud Bayero, agreed to the decision.
Justice William-Dawodu upheld Justice Ogala’s decision, ruling that the lower court had jurisdiction to hear the case in Lagos even though the subject of the dispute was located in Oghara, Delta state.
On the question of whether Shield Petroleum Nigeria Limited and the appellants ( Heritage bank) had a legal and enforceable contract, the court ruled that “there was a genuine contract and that failure to keep to the agreed term constituted a breach”.
“Therefore, there is a valid and enforceable contract between the first respondent and the appellant acting for the appellant and the third respondent.
“Having found that there was indeed a valid contract between the said parties, the pertinent question is whether or not there was a breach of it. Failure to keep to the agreed terms of a contract is a breach where the party in breach acted contrary to the terms agreed without lawful excuse, either by the non-performance or wrongful repudiation of the contract”.
According to the Notice of Appeal, the core of what led to the appeal is that Heritage Bank gave loans to Bitumen Marketing Company Limited (BMC) for its bitumen Tank Farm in Oghara, Delta State.
Shield Petroleum Nigeria Limited, on the other hand, made an initial offer of N200 million to them for the sale of the Tank Farm, which was increased to N220 million, and the appellant and the Heritage bank accepted it in a letter dated August 21, 2007.
The third respondent (Heritage Bank) demanded payment of the agreed-upon money from Shield Petroleum Nigeria Limited in a letter dated November 6, 2007. (first Respondent).
Original drafts of the bank drafts had been received by Mr Abiodun Shode, the Commercial Department of the Appellant, on January 29, 2008.
Despite the payment made by the first and second respondents, the Appellant and third respondent went ahead and collected N230, 000,000.00 from the fourth respondent (Ontario Storage Terminals Limited) in February 2008 as payment for the Tank Farm.
They say they were unable to conclude the contract with the first and second respondents due to the latter’s late payment of the purchase price, resulting in contract frustration.
Shield Petroleum Nigeria Limited repeatedly demanded possession of the Tank Farm, but the Appellant and third respondent refused, claiming they had sold it to the fourth respondent and were returning the bank drafts to the first and second respondent.