Ashakacem Plc V. Asharatul Mubashshurun Investment Limited (2019)

LAWGLOBAL HUB Lead Judgment Report

MARY UKAEGO PETER-ODILI, J.S.C.

This is an appeal against the decision of the Court of Appeal, Kaduna Division or Court below or Lower Court delivered on 28/1/2016 Coram: Umani Musa Abba-Aji, Habeeb Adewale Abiru and Amina Audu Wambai JJCA. The Court below dismissed the appellant’s appeals (Interlocutory and Substantive) and allowed the respondent’s cross-appeal in which the Court below held the appellant indebted to the respondent in the sum of N126,777.015.00 as against the sum of N91,662,435.44K awarded in favour of the respondent by the trial Court presided over by Tani Yusuf Hassan J.

On the 13th day of November, 2018, the date of hearing, learned counsel for the appellant, Prof Taiwo Osipitan SAN adopted the brief of argument filed on 17/5/16 and a reply brief filed on 13/4/17.

The case of the respondent on the pleadings was that on the 24th of July, 2007 the parties entered into a contract for the supply and purchase of Low Pour Fuel Oil (LPFO) and it was agreed that the respondent would supply Eleven Million liters of Low Pour Fuel Oil (LPFO) to the appellant

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and which Low Pour Foul Oil (LPFO) was to be offloaded into the appellant’s storage tanks at its offices in Ashaka and Kano within six weeks and that the unit price per liter for the supply to Ashaka would be 65.00 while that for Kano would be 59.50 and that payment was to be made within two weeks of supply of the low Pour Fuel Oil (LPFO) by the respondent and confirmation of its receipt by the appellant. That the contract document was executed by the representatives of the parties and that due to exigent circumstances, the respondent applied three times for extension of delivery period and that the extension was granted and acceded to by the appellant.

That in the course of the supply, the price of the product rose and it became impossible for the respondent to continue the supply at the price agreed per liter and he wrote to the appellant requesting for a price review and that the appellant approved the request and a price of N75.00 per liter of Low Pour Fuel Oil (LPFO) was agreed. The review price of N75.00 per liter agreed by the parties was a flat rate for all supplies to Kano and Ashaka storage facilities and that the allegation of a shortfall of 1.05 Million

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liters of LPFO was non-existent and was introduced by the appellant to bring confusion.

The respondent supplied the product into the appellant’s Kano storage facility and sent a delivery notification to the appellant where its Stores manager wrote via email that it supplied a total of 6,384,469 liters of LPFO into the Kano Storage tanks of the appellant and this was subsequently confirmed by a hard copy of a report on the quantity of LPFO reaffirming that 6,384,469 liters of Low Pour Fuel Oil (LPFO) was supplied into its Kano Storage tank and the appellant accepted the product, as the product supplied was found to be within the range of the appellant’s quality parameters from the dip result conducted.

That total price of the product supplied was N478,835,175.00 and out of which the appellant paid N352,058,160.6 leaving a balance of N126,777.014.37 which the appellant has failed to pay despite repeated demands. That all the subsequent liters written by the appellant and alleging a shortfall were afterthoughts. It was its case that it agreed to absorb 660,000 liters out of the alleged shortfall

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in its letter dated 2nd of March, 2009 in the spirit of reconciliation at a meeting chaired by a third party and also in return for the appellant issuing it with a contract for the supply of Thirty Million liters of LPFO, and not because it acknowledged any actual shortfall and that it was not indebted to the appellant for any such shortfall.

In its case on the pleadings, the appellant admitted that on the 24th of July, 2007 the parties entered into a contract for the supply and purchase of Low Pour Fuel Oil (LPFO) and that it was agreed that the respondent would supply Eleven Million liters of Low Pour Fuel Oil (LPFO) to it and which Low Pour Fuel Oil (LPFO) was to be offloaded into its storage tanks at its offices in Ashaka and Kano within six weeks. The appellant admitted that it was agreed that payment was to be made within two weeks of supply of the Low Pour Fuel Oil (LPFO) by the respondent and confirmation of its receipt by the appellant and that the contract document was executed by the Representatives of the parties and also that due to exigent circumstances,