B. F. I. Group V. Bureau Of Public Enterprises (2007)
LawGlobal-Hub Lead Judgment Report
MARY U. PETER-ODILI, J.C.A.
This is an appeal against the decision of Honourable Justice S.J. Adah sitting at the Federal High Court, Abuja delivered on the 23rd day of November, 2005 wherein he dismissed the Plaintiff/Appellant’s claims.
The Appellant before the Court of Appeal was the Plaintiff in the lower court before which in its writ of summons and Amended Statement of claim, it claimed against the defendant now Respondent the following declaratory reliefs:-
(a) An Order of declaration that the acceptance of the Plaintiffs bid price of the sum of US $410 million for the acquisition of 77.5% shares as core investor in ALSCON by the defendant at the bid/auction sale of ALSCON sale held on 14/6/2004 constituted a binding contract between the parties.
(b) A declaration that the bid by the plaintiff for the purchase of ALSCON 77.5% share holding of the Federal Government of Nigeria under the supervision and control of the defendant by which the Plaintiff emerged winner on the 14th June 2004 is valid, extant and irrevocable.
(c) An Order of declaration that the understandings and Agreements reached at the Technical Bids Conference held on 20/5/2004 constituted the terms and conditions for the bid and the payment for the acquisition of 77.5% shares in ALSCON by a Strategic Core Investor under the Federal Government of Nigeria Privatisation Programme.
(d) A declaration that the terms of payment for the 10% initial bid price is as stated in paragraph F of the confirmation of Understandings and Agreements made by the defendant and the plaintiff on 20th May 2004 which state inter alia that the bid price is to be paid within 15 working days of signing the share purchase Agreement (SPA) while the outstanding 90% Bid price is to be paid within 90 calendar days.
(e) A declaration that the purported letter of the defendant dated 9th July, 2004 titled “Application
for Extension of time and alleging default of paying the 10% of the Bid price was a ruse meant to cover the defendant’s illegality as no application for extension of time was made on 8th July, 2004 when the plaintiff was ready and willing to sign the SPA in the defendant’s office and no default was made by the plaintiff in the payment of the said 10% of the bid price.
(f) A declaration that the postponement of the signing ceremony of the Share Purchase Agreement (SPA) from 8th July, 2004 to 9th July 2004 by the defendant was a stratagem designed by the defendant to prevent the plaintiff from taking benefits of the contract willingly entered its position to its detriment at the instance of the defendant.
(g) A declaration that the letter written by the defendant to the plaintiff unilaterally terminating the said contract is illegal void and unconstitutional to say the least.
(h) A declaration that the defendant had deliberately made the plaintiff alter its position to the latters disadvantage by making the plaintiff commit huge financial resources which include among others the sum of US $3million and another US $3 million bond made in favour of the defendant as well as, loss of goodwill, attraction of Business Partners affiliates, investors, submission of expression of interest statement, legal evaluation of information memorandum, bidding documents, pre-due diligence technical conference, 3 weeks on sight data room due diligence review at Ikot Abasi, Joint Technical Question and Answer Conference, submission and Evaluation of financial Bid conference, the public opening of the financial Bid and international and local media coverage of the final opening Bid to mention just a few financial and material resources injected into the bidding exercise at the instance of the defendant.
(i) An Order of this Honourale Court granting a decree of specific performance mandating the defendant to provide the share purchase agreement for execution by the parties to enable the plaintiff pay the agreed 10% of the accepted bid price of US$ 410 million (i.e. the sum of us $ 41 million) within 15 working days from the date of the execution of the Share Purchase Agreement in accordance with the agreement dated 20/5/2004.
(j) A declaration that the defendant is bound to accept payment of 10% at, the Bid Price from the plaintiff within 15 days from the date of the signing the share purchase (SPA) by the parties
(k) An Order of perpetual injunction restraining the defendant its servants; agents, privies, management or howsoever called from inviting any further bidding for the sale and acquisition of ALSCON in violation of the contract between the plaintiff and defendant and or from negotiating to sale, selling, transferring or Otherwise handing over the Aluminum Smelter Company of Nigeria Limited (ALSCON) to any person or persons in violation of the contract between the Plaintiff and the defendant.
The defendant filed a further amended statement of defence to the Amended Statement of claim. parties led evidence before the lower court and after addresses of counsel to the parties, the learned trial court in a well considered judgment dismissed the plaintiff’s claim in toto.
Aggrieved the plaintiff as appellant appealed to this court asking that the appeal be allowed, the judgment of the lower court set aside and in its place the Court of Appeal grants the reliefs/claims in the Amended Statement of claim as reflected in the early part of this judgment.
STATEMENT OF FACTS
Following an advertisement for expression of interest on the privatization/sale of Federal Government’s Share in Aluminum Smelter Company of Nigeria (ALSCON), the plaintiff bided for the purchase of the Company. Other Companies also bided for the purchase of ALSCON.
At the financial bid opening held on the 14th day of June 2004 the plaintiff was declared the preferred bidder. This by the terms of the agreement between the parties vide Exhibit D6, the plaintiff was to pay an initial deposit of 10% of the bid price within 15 working days from the date of communication of the success of its bid. The plaintiff was unable to pay the initial deposit, it therefore applied for extension of time within which to pay the initial deposit. See Exhibit 6.
The plaintiff’s application for extension of time to pay the initial deposit was refused by the defendant by letter of 8th July 2004. The plaintiff’s stand is that negotiations for the purchase and sale of ALSCON would have led to the signing of a share purchase agreement between the plaintiff and the defendant if same had been concluded but this could not be because of the inability or failure of the plaintiff to pay the 10% initial deposit.
On the defendant’s part it was put forward that the Appellant having offered to purchase the 77.5% shares of ALSCON for the sum of US $ 410 million was at end of the financial bid opening publicly declared as the winner of the bid and so the acceptance of Appellant’s bid price of US $ 410 million at the Public bid of the subject matter completed the sale of the subject matter. That the purported reminder by the Respondent that Appellant pay 10% of the bid price within 15 working days of the letter was a unilateral introduction by the Respondent would not have the effect of truncating the conclusion of the sale.
The Appellant by a Brief filed on the 5/4/06 by Mr. Ikwueto of counsel referred to an application of the Appellant granted on 14/12/06 for the additional and fresh evidence which is the letter from the Minister of Transport of 26/5/04.
The Appellant in the said Brief formulated three issues for determination:-
(a) Whether the parties intended the agreements understandings reached at the pre-bid conference held on 20/5/2004 to create a binding contractual legal relationship between them.
(b) Whether there is a binding contract between the parties capable of being enforced by an order of specific performance
(c) Whether the learned trial court properly evaluated the evidence led by the parties and accurately, resolved the life1issues before it.
The Respondent’s Brief was filed on 20/9/06 with a further list of authorities filed on 19/2/07. The Respondent adopted issues (b) and (c) of the Appellant and discountenanced issues (a) of the Appellant saying that issue is sub-summed in issue (b). The Respondent however retitled the adopted issues as A and B.
Indeed to my mind the issue (a) of the Appellant was properly captured in issue (b) and therefore (a) is a surplussage. I would therefore utilise the two issues titled A and B which in effect are the (b) and (e) of the Appellant.
ISSUE A
Learned counsel for the Appellant, Mr. Ikwueto SAN stated that DW1 had admitted that Exhibit D 1 is the basis for the entire agreement while Exhibit 2 is the final stage and binds the parties. He said it is possible for parties to agree to vary their terms until the (SPA), Share Purchase Agreement is executed. That the position of the law is now beyond argument that the duty of the court in interpreting words used by the parties in a document, is to give those words their ordinary natural meaning where the words themselves are unambiguous and clear. He cited UBN Ltd v. Ozigi (1991) 2 NWLR (pt. 176) 677 Orient Bank Nigeria PLC v. Bilante International Ltd (1997) 8 NWLR (pt. 515) 37 at 38.
Learned counsel for the Appellant said the parties including DW1 and DW2 unequivocally admitted that following the pre-bid conference held on 20/5/2005, agreements/understandings were reached regarding the reminder of the process for the Privatisation of ALSCON and particularly the agreement resulted in “a change on the terms of payment”.
That the fundamental question is whether the parties having met and reached understandings/agreements on crucial aspects of their transaction, those understandings/agreements could be given any other meaning than what the parties in their wisdom described them i.e. their agreements. That it is elementary that an agreement has the same meaning as a contract.
Mr. Ikwueto further stated that DW1 gave inconsistent pieces of evidence and so his evidence should not be accepted as the account of what transpired between the parties. He cited Nwosu v. State (1986) 4 NWLR (pt. 35) 349.
Learned counsel said since the learned trial Judge did not make any finding on the aspect of the DW1’s testimony, this Appellate court will rightly intervene to correct the obvious error occasioned by the trial court. He referred to Nnajiofor v. Ukonu (1985) 2 NWLR (pt. 9) 686.
Learned counsel for the Appellant stated that upon a community reading of Exhibits D1, 3, 5 and D16, it will be obvious that the process involved in the Privatisation of ALSCON is a claim transaction with each stage intended to significantly Impact on the process. That the learned trial court though correctly appreciating that the nature of the transaction is such that the process is segmented, unfortunately failed to apply the correct approach in determining the legal effect of documents forming part of a segmented transaction. He cited Royal Exchange Assurance Limited & ors v. Aswani iles Industries Ltd (1991) 2 NWLR (pt. 176) 639 at 699 Federal Government of Nigeria & ors v. Zebra Energy Ltd (2002) 3 NWLR (pt. 754) 471 at 492.
It was further submitted that in commercial transactions of the nature of the instant case, the correct approach is to examine the matrix of the facts as contained in the documents exchange between the parties in order to discover the real intention of the parties at each stage of the transaction. He referred to Investors Compensation Scheme Ltd v. West Bromwich Building Society (1998) 1 WLR 896; Anuruba v. Ebenator Community Bank Ltd & anor (2005) 10 NWLR (pt. 933) 321 at 344.
Learned counsel for the Appellant said the appellant will show at this hearing that at its meeting held on 20/5/2004 the National Council on Privatisation approved the terms of the agreement/understanding reached by the parties at the Pre-bid conference. That the court should introduce and rely on the letter dated 26.5.2004 written by the Respondent to the Minister of Transport and the reply dated 28.5.2004. That since the National Council on Privatisation approved the terms of the Agreements/understandings reached by the parties at the Pre-bid conference it is submitted that those agreements/understandings were intended to give rise to legal relationship and create contractual obligations. He cited the cases of Haryanto v. E. D. & F Man (Sugar) Ltd (1986) 2 Lloyds Report 44 Garnac Gran Co. Inc. v. H. M. F. Faure and Fair Clough Ltd (1966) 1 & B 650 at 683; Glencore International A.G. vs. Metro Trading International Inc. (2001) Ewitc (4) 1 at 33 -34.
That the light of the above scenario that the elements of a valid contract to writ offer acceptance and consideration existed and flowed from the transaction between the parties especially since the Appellant provided to the Respondent as agreed and requested a bid bond in the sum of one million dollars ($1m). The New Zealand Shipping Co. Ltd v. A. M. Satterthwalt Co. Ltd (1974) 1 All ER 1015 at 1020; Omega Bank Ltd v. O. B. C. 21 NSCQR 771 at 793.
Learned counsel for the Appellant went on to ask why the Respondent by exhibit D16 (letter mistakenly dated 27th June 2004 but meant 27th May 2004) set out a revised time table containing “the stages we considered fundamental to the process”. That it is trite that where by his words or conduct one party to a transaction freely makes to the other an unambiguous promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise) and the other party acts upon altering his position to his detriment, the party making the promise or assurance will not be permitted to act inconsistently with it. He cited Central London Property Trust Ltd v. High Trees House Ltd (1947) KB 130; Snells Principles of Equity 28th Edition 556; Philipson on Evidence 13th Edition, pages 1057 – 1064 Edwards v. Skyways Ltd (1964) 1 WLR 349.
Mr. Ikwueto of counsel stated on that the learned trial court having found that the 20th May 2004 conference of the parties, they agreed that payment of the 10% will be within 15 days after signing the share purchase agreement (SPA). Therefore a unilateral notification by one party to the other, in the absence of any agreement, cannot constitute a variation of a contract. He referred to Chitty on Contracts. General Principles 24th Edition paragraph 1376 page 649.
It was submitted for the Appellant that the trial court having reached a conclusion totally contrary to the evidence before it the Court of Appeal has to interfere and ensure that justice is rightly done. He referred to Fashanu v. Adekoya (1974) All NLR (pt. 1) 35; Eki v. Giwa (1977) 2 SC 131 at 136; Nnajiofor v. Ukonu (1985) 2 NWLR (pt. 9) 686.
In response learned counsel for the Respondent, J.K. Gadzama SAN stated that it is not the Court who makes contracts for parties but to enforce same where there is one. That from the totality of the oral and documentary evidence adduced before the trial court there was no binding contract between the parties that was capable of being enforced by an order of specific performance. He cited Oyeneyin v. Akinkigbe (2001) 1 NWLR (pt. 693) P40 at 57.
Mr. Gadzama further said that in view of the evidence of PW1 it cannot be said that as at 20th May 2005 that there was a binding contract between the parties on the sale of ALSCON. Also that from the evidence pf PW3 Mr. Frank J. Schere on the 4th February 2005 the only reasonable conclusion is that there was no binding agreement between the parties whether on 20/5/04 or at any subsequent date for the sale of ALSCON. He cited Green Fingers Agro Ind. Enterprises Ltd v. Musa Yusufu (2004) FWLR (pt. 193) page 202 at 2125.
Learned counsel for the Respondent said the dispute between the parties could be summarized thus:-
That while Appellant’s position that 10% of the bid price was to be paid after the signing of the share purchase agreement which in any case was never signed, the position of the Respondent is that the 10% of the bid price was to be paid within, 15 days of receipt of Exhibit 6 i.e. 17th June 2004, the application for extension of time of the Appellant to pay the initial deposit which is 10% of the bid price.
Mr. Gadzama of counsel said that a party who seeks the enforcement of a contractual obligation against the other by way of specific performance must show that it has fulfilled its own side of the contract. He referred to Ameze v. Anyaso (1993) NWLR (pt. 29) 1 at 26. That having failed to pay the 10% deposit of the bid price within 15 days from 17th June, 2004 and the refusal/failure of the Appellant to submit its technical agreement with Daewoo International justified the decision of the defendant to terminate the negotiation for sale of ALSCON by the parties. That this issue should be resolved in favour of the Respondent.
In view of the questions raised it becomes necessary to have a look at some of the relevant documents. The letter of 28th April, 2004 by Respondent to the Chief Operating Officer of the Appellant reads inter alia:-
“Dear Sir,
Privatisation of ALSCON: Financial Bids Opening
With reference to the submission of both your technical and financial bids along with the bid bond on the 20th April 2004, we wish to inform you that the technical bid has been evaluated and found responsive.
It is therefore my pleasure to convey to you that BFI Group Corporation has been prequalified for the next round in the Privatisation of ACSCON; the financial bid opening.
The bid opening is scheduled to hold in May 2004 at a date that would be conveyed to you instead of the earlier announced date of 4th May 2004. This becomes necessary in order to sort out certain issues that pertain to the transaction.
While we congratulate you on this achievement, we regret any inconvenience caused by the postponement and count on your continued understanding and cooperation in the Privatisation of the Aluminum Smelter Company of Nigeria, Ikot – Abasi.
Yours faithfully,
For: Bureau of Public Enterprises
Reuben G. Omolowa
A Director (National Resources)”.
Exhibit BFI Group 2 – A letter from Bureau of Public Enterprises (BPE) of 20th May 2004 to Dr. Reuben Jaja, Chief Operating Officer of the Appellant which reads:-
‘Dear Sir,
PRIVATISATION OF ALUMINUM SMELTER COMPANY OF NIGERIA (ALSCON):
CONFIRMATION OF UNDERSTANDINGS/AGREEMENTS
REACHED AT THE TEACHNICAL BIDS CONFERENCE OF 20TH MAY 2004
First, I write to thank you for the interest in investing in Nigeria through ALSCON and for participating in the technical bids conference of May 20th (Attendees of the bid conference are hereby attached as annexure 1) the discussions were quite illuminating and we are convinced that all parties gained from the information that were shared.
We are by this letter therefore setting put the understandings and agreement that were reached at the conference as follows:-
(a) Availability of the year 2003 Audited Financial Accounts; The Bureau shall make available to both bidders the 2003 audited financial accounts in the week of 24th May 2004
(b) The Dredging of the Imo River Channel; The preferred bidder shall be responsible for dredging the Imo River Channel. Accordingiy, bidders are expected to take this into consideration in stating their bid price. The Bureau shall assist the preferred bidder with relevant approvals from the Federal ministry of Transport to facilitate the dredging.
“Exhibit BFI Group 3
Attention; Dr. Reuben Jaja
Dear Sir,
Preferred bidder in the Privatisation of ALSCON.
It would be recalled that the National Council on Privatisation publicly opened your financial bids, along with that of RUSAL (Bratsk) Aluminum on 14th June 2004.
While we wish to congratulate you on this achievement, we wish to remind you that your consortium must pay 10% of the bid price within 15 working days of receipt of this letter. Furthermore, the balance is to be paid with 90 working days thereof.
The Bureau wishes to register its appreciation for your commitment and understanding in the Privatisation of ALSCON, we look forward to the commencement negotiation with your company on Friday, 18th June 2004 by 2:00pm at the BPE conference room.
Once again congratulations.
Yours faithfully,
For: Bureau of Public Enterprises
Julius Bala
Director General”.
“Exhibit BFI Group 4
9th July 2004
Dr. Reuben Jaja,
Chairman/CEO
BFI Group Corporation,
C/o DATEC Centre,
Nicon Hilton Hotel,
ABUJA.
Dear. Dr. Jaja,
RE: BFIG – ALSCON APPLICATION FOR EXTENSION OF TIME
Thank you for your letter of July 8, 2004 on the above subject. You will recall that at the Financial Bid Opening for the Privatisation of the Aluminum Smelter Company of Nigeria (ALSCON) held on June 14, 2004 the BFI Group Corporation was declared the preferred bidder.
Your bid was approved by the Federal Government of Nigeria and on June 17, 2004, I conveyed the approval of the Government to BFIG Group. In the letter, your Corporation was unequivocally informed that you had 15 working days from the date of receipt to pay 10% of the bid price. The letter was received by your Corporation on the same date, that is, June 17, 2004.
Negotiations for the execution of the Share Sale/Purchase Agreement (SPA) was scheduled for June 18, 2004. However, at the instance of your Corporation, it was postponed to June 21, 2004. Negotiations were subsequently held between officials of the BPE and your Corporation where a final agreement was reached. Unfortunately you did not make yourself available to sign the SPA until July 8, 2004 when the period for the payment of 10% of bid price expired. Instead on the afternoon of July 8, 2004, you applied for 10 working days extension to enable you pay up the 10% of the bid price. At the discussion that we had thereafter, I informed you that I would forward your request to Government.
The Federal Government considered your application and observed that you defaulted in paying the 10% of the bid price as and when due. Therefore, your application for extension was turned down by the Government. We thank you for your interest in the Privatisation programme.
Yours sincerely
Dr. Julius J. Bala
Director General
CC: His Excellency
Chief Olusegun Obasanjo
His Excellency
Vice – President Atiku Abubakar”.
In the Amended Statement of claim the Plaintiff now Appellant averred at paragraphs:
- The plaintiff will show at the trial hereof that the plaintiff duly provided the required consideration for the bid aforesaid and submitted a financial bid bond in the sum of US$ 1,000,000.00 (one million US dollars) in terms dictated and approved by the defendant
- Unless by an order of this Honourable Court the defendant will persist in its illegal assumption that the plaintiff defaulted in paying the agreed 10% of the bid price contrary to the terms and conditions of the bid/auction sale of ALSCON by the defendant and in total violation of the contract between the parties and thereby continue to refuse to allow the plaintiff acquire ALSCON as a Core Investor.
In paragraph 17 of the Amended Statement of Defence the Defendant/Respondent stated:-
- Paragraph 17 of Plaintiff’s Amended Statement of Claim is false and it is hereby denied. At no time was the SPA (Share Purchase Agreement) meant to be a confirmation of the understanding reached between parties on 20th May 2004. Contrary to the averment in the said Paragraph 17 of Plaintiff’s Amended Statement of Claim, the SPA was an embodiment of the understanding of 20th May, 2004 and more. It takes precedence over the latter.
That the Board of the plaintiff had approved the SPA but that the execution of the SPA was frustrated by the Plaintiff’s inability to pay the 10% Bid Price agreed. That contrary to the averment in paragraph 8 of the Plaintiff’s pleading the defendant did not materially alter its position and that the payment of 10% of the Bid Price was agreed by the Plaintiff and that there was no written complaint made by the plaintiff.
Having recanted some of the relevant documents in this transaction and some salient parts of the pleadings of both parties it becomes necessary to find out whether or not a contract or agreement as known to law had been consummated or near consummation for which the court can properly be called upon to decree specific performance. It is borne in mind that it is settled that there must be a definite contract in existence of which the court would order specific performance since part performance cannot of itself determine material terms of the contract. The acts of part, performance relied on must have been done by the person seeking to enforce the contract, or on his behalf. See Biyo v. Aku (1996) 1 NWLR (pt. 422) 33.
It is known that a party cannot generally lead oral evidence contrary to documentary evidence in expatiation of documentary evidence particularly where by the nature of the case, there are numerous documents which need some co-ordination in the interpretation process. I rely on Orient Bank (Nig.) Plc v. Bilante International Ltd (1997) 8 NWLR (pt. 515) 37 at 93.
In view of the forgoing, we shall go to the evidence or at least part of it for the purpose of exploring the stage of the transaction. In the case before this court the PW1 at the court below stated:-
”My names are Reuben Myia Tamino Jaja……… After signing the agreement what followed was that I submitted a bid of one million US Dollars in support of the agreement of 20/5/04. The other things were the responsibility of ALSCON…. Specifically I believe that agreement stipulated that 10% of the bid price should be paid fifteen working days after the signing of the purchase agreement.
The Share Purchase Agreement (SPA) was not signed I have seen the draft of the Share Purchase Agreement.”
The PW1 is the Chief Execution officer of the Appellant and he was the one who exchanged the related documents with the Respondent.
On the other hand, Dr. Paul Idonigie, Adviser to the Respondent testified as DW1 inter alia:-
“After the financial bid opened whoever emerges the winner is notified of the fact that the National Council on Privatisation has approved the bid and based on the provision in the RFP, the bidder is given 15 working days from the date of notification to pay the initial deposit of 10% of the purchase consideration”.
The necessity for this oral testimony is the fact that where documents form part of long drawn transaction they should be interpreted not in isolation but in the con of the totality of the transaction in order to fully appreciates their legal purport and import.
That is the only way to find out and determine the real intention of the parties. A restricted interpretation which does not take cognizance of the total package of the transaction in which the documents are an integral part cannot meet the justice of the case. See Orient Bank (Nig.) Plc v. Bilante Int. Ltd (1997) 8 NWLR (pt. 515) 37 at 78: REAN Ltd v. Aswani iles Industries Ltd (199~) 2 NWLR (pt. 176 639).
In the construction of a contract, the meaning to be placed on it is that which is plain, clear and obvious result of the terms used. A contract or document is to be construed in its ordinary meaning as question of fact where the language of a contract is not only plain but admits of one meaning, the task of interpretation is negligible. The words are to be construed according to the ordinary meaning. When construing documents in dispute between two parties, the proper course is to discover the intention or contemplation of the parties and not to import into the contract ideas not potent on the face of documents. Where the contract is reduced to writing, the terms of such contract are to be deduced from the written agreement. See Orient Bank (Nig.) Plc v. Bilante International Ltd (1997) 78: Mandilas Karaberis v. Otokiti (1963) 1 All NLR 22; Aouad v. Kessra Wani (1956) NSCC 33; UBN Ltd v. Ozigi (1991) 2 NWLR (pt. 176) 677; Amadi v. Thomas Aplin & Co. Ltd (1972) 1 All NLR (pt. 1) 409.
An offer is a proposal which originates or emanates from the offeror to the offeree to enter into an agreement to do or not to do a particular thing. Since the essence of offer is reciprocal acceptance, the offeror anticipates the expected acceptance and this he makes clearly in the offer. A valid offer must be precise and unequivocal, giving no room for speculation or conjecture as to its real content in the mind of the offeree. The offeror must have completed his own share in the formation of a contract by finally declaring his own readiness to undertake an obligation upon certain conditions, leaving to the offeree the option of acceptance or refusal. See Orient Bank (Nig.) Plc v. Bilante International Ltd (1997) 8 NWLR (pt. 515) 37 at 76; UBN Ltd v. Sax (Nig.) Ltd (1994) 8 NWLR (pt. 361) 150.
An acceptance is the reciprocal act or action of the offeree to an offer in which he indicates his agreement to the terms of the offer as conveyed to him by the offeror. In other words, acceptance is the act of compliance on the part of the offeree with the terms of the offer. It is the element of acceptance that underscores the bilateral nature of a contract. An acceptance of an offer may be demonstrated:
(a) by conduct of the parties, or
(b) by their words; or
(c) by documents that have passed between them.
The conduct of the parties must be unequivocally traceable to the transaction to constitute acceptance. Where there is a missing link between the conduct of the parties and the transaction, a court of law will not be prepared to hold that a valid contract exists between them.
An acceptance of offer by conduct will amount to proper acceptance only if it is clear that the offeree did the act with the intention of accepting the offer. See Orient Bank (Nig.) Plc v. Bilante International Ltd (1997) 8 NWLR (pt 515) 37 at 77 per Tabi JCA: Majekodunmi v. NBA (1978) 3 SC 119; Chagoury v. Adebayo (1972) NCLR 384; UBN Ltd v. Ozigi (1991) 2 NWLR (pt. 176) 677.
There must be positive evidence from which the court may infer an acceptance. This may consist in words, in writing or in conduct. The acceptance must be communicated to the offeror. This is, however subject to certain exceptions, the most important of which concern communications sent through the post in which case the general rule is that the acceptance is completed as soon as it is posted.
For there to be an acceptance of an offer there must be an external manifestation of assent, some word or act done by the offeree or his authorised agent which the law can regard as the communication by the offeree to the offeror. This is because in order to make a binding contract, it is necessary not only that it should be accepted but that the acceptance be communicated, mental or internal acceptance is not enough. See NNSC Ltd v. Agricor Incorporation of USA; Council of Yabatech v. Nigerlec (1989) 1 NWLR (pt. 95) 99; Wakama v. Kalia (1991) 8 NWLR (pt 207) 123.
In order to constitute acceptance, the assent to the terms of an offer must be absolute and unqualified. If the acceptance is conditional, or any fresh term is introduced by the person to whom the offer is made, his expression of assent amounts to a counter- offer which in turn requires to be accepted by the person who made the original offer. For an acceptance to be operative it must be plain, unequivocal, unconditional and without variance of any sort between it and the offer. The offeree must unreservedly assent to the exact terms proposed by the offeror. A counter – offer or a qualified acceptance of an offer cannot give rise to a binding agreement between parties. See Orient Bank (Nig.) v. Bitante International Ltd (1998) 8 NWLR (pt 515) 37 at 84 – 85 per Tobi JCA (as he then was) Innih v. Ferado Agro Ltd (1990) 5 NWLR (pt. 152) 604.
We cannot lose sight of the fact that an offer which is intended to be accepted in a particular way or communicated in a certain way can generally be accepted only in that way. See Afolabi v. Polymera Industries (Nig.) ltd (1967) 1 All NLR 144 at 147.
Having explored some of these legal principles the brief summary of the contention of the parties is that while the Appellant claims the arrangement had graduated into a solid agreement for which the court needs to order specific performance and that payment of the 10% of the purchase price of US $ 410 million should be done within 15 days after the signing of the Share Purchase Agreement (SPA). The Respondent on their part says the payment of the 10% should precede the signing of that SPA.
A contract is an agreement between two or more parties which creates reciprocal legal obligation or obligations to do or not to do a particular thing. For a valid contract to be formed there must be mutuality of purpose and intention. The two or more minds must meet at the same point, event or incident. They must not meet at different points, events or incidents. They must be saying the same thing at the same time. They must not be saying different things at different times. Where or when they say a different thing at different times, they are not “ad idem” and therefore no valid contract is formed. The meeting of minds of the contracting parties is the most crucial and overriding factor or determinant in the law of contract. An agreement will not be binding on the parties to it until their minds are at one both upon matters which are cardinal to the species of agreement in question and also upon matters that are part of the particular bargain. Orient Bank (Nig.) Ltd v. Bilante International Ltd (1997) 8 NWLR (pt. 515) 37 at 76 per Tobi JCA; Okubule v. Oyagbola (1990) 4 NWLR pt. 147) 723.
There are five ingredients that must be present in a valid contract. They are offer, acceptance, consideration, intention to create legal relationship and capacity to contract. All there five ingredients are autonomous units in the sense that a contract cannot be formed if any of them is absent. In other words, for a contract to exist in law, all the five ingredients must be present. See Orient Bank (Nig.) Ltd v. Bilante International Ltd (1997) 8 NWLR (pt. 515) 37 at 76 Tobi JCA, (as he then was).
It is traditionally said that in order to bring a contract into being that is, a situation where the parties to the contract confer rights and impose liabilities on themselves – there must be mutual assent. The mutual assent of the parties to it must be capable of being broken down into “offer” and “acceptance”. An offer is an expression of readiness to a contract on the terms specified by the offeror which if accepted by the offeree gives rise to a binding contract. Clearly, an offer, therefore, is not itself a contract. It may mature to a contract where the parties become ‘ad idem’ where the offeree signifies a clear and unequivocal intention to accept the offer. See Orient Bank (Nig.) Plc v. Bilante International Ltd (supra) per Achike JCA at page 98.
In answer to the issue raised in Issue A, I have no hesitation in, saying that the position pushed up by the Appellant does not fit into the various processes, negotiations and even in the normal course of agreements, contracts or in short normal business practice. One cannot explain how a contract document signifying the conclusion of the entire transaction with the rights and obligations well embedded can be signed and the purchaser have the luxury of 15 days within which to pay 10 per cent of the contract price with the balance three months or 90 calendar days later. Therefore the further posturing by the Appellant that the bid bond of one million US Dollars ($ 1 million) sufficed to place the Respondent on the spot and have them cornered into full obligation of handing over the property in issue cannot be justified even from the evidence of the Appellant at the court below.
Clearly the Appellant and Respondent had not gone too far from an invitation to treat which is stated to be a mere declaration of willingness to enter into negotiations where the wording of a statement is not conclusive, it may be an invitation to treat although it contains the word “offer”. Similarly, a statement may be an offer although it is expressed as an acceptance see Orient Bank (Nig.) Plc v. Bilante International Ltd (1997) 8 NWLR (pt 515) 37.
In conclusion therefore; I answer this issue in favour of the Respondent.
ISSUE B
Learned counsel for the Appellant stated that where a court of trial unquestionably evaluates the evidence and appraises the facts, it is not the business of a Court of Appeal to substitute its own views over that of the trial court. He cited Akinloye v. Eyiyola (1968) NMLR 92 at 95. He stated that the business of the Court of Appeal is not to re-open the dispute and start trying the case afresh like the trial court.
That the proper function of an appellate court is to reverse, superintend and to review the way the dispute and the issues arising therefore were tried and to see whether the trial court used the correct procedure and or arrived at-the correct and proper decision. See Board of Custom & Excise v. Baram (1982) 10 SC 48 at 137 Ogbechie v. Onochie (1986) 2 NWLR (pt. 23) 484 at 493; Obodo v. Ogba (1987) 2 NWLR (pt. 54) 1 at 10.
Learned counsel for the Appellant stated on that the conclusion of the learned trial court in this case stemmed from or the trial courts misconception that the unilateral variation of an agreed team amounted to making a new offer. That this appellate court has the jurisdiction to examine the evidence on record to see whether they justify the conclusions/findings of the learned trial court and correct an error where necessary. He cited Balogun v. Akanji (1988) 1 NWLR (pt. 70) 301 at 319; Ikono Local Government v. De Beacon Finance & Securities Ltd (2002) 4 NWLR (pt. 756) 128 at 138.
It was submitted for the Appellant that the learned trial court did not advert its mind to the potent force of Exhibit D1 (the RFP) in determining the nature of the transaction in the instant case. That if the trial court had adverted its attention to the clear provisions of the RFP, it would have been obvious to that court that its conclusion is faulty and unsupportable. Also that it is important to point out that the credibility of witnesses in this case is not to be determined by the demeanour or character of the witness. That this court is to be guided by examining the testimony of the witness alongside the documentary evidence before the court. That the principle now of strong force is that where there is oral testimony as well as documentary evidence, the documentary evidence should be used as a hangar to assess the oral testimony. He referred to Kindey v. Military Governor Gongola State (1989) 4 NWLR (pt. 77) 4; Glencore International A.G. Metro Trading International Inc.ors(2001) 1 EWHC (4) 1 at 33-34 Haryanto v. E. D. & Report 44.
It was further argued for the Appellant that where as in the instant case, the real issue does not revolve around the credibility of the witness who testified but depends much on the inferences to be drawn from proved or admitted fact or facts as found by the trial court, an appellate court has full liberty to draw its own inferences and should not be deterred from that duty to thus make up its own mind. He cited Benmax v. Austin Motor Co. Ltd (1955) All ER 326 at 327; Balogun v. Akanji (supra) P. 320, Ebba v. Ogodo (1984) 4 SC84.
Learned counsel stated that this circumstance prevailing demands the intervention of this court in the findings and conclusion of the trial court.
Mr. Ikwueto stated on that the parties admitted at the trial that the negotiation for the SPA had been concluded and the SPA ready for signatures and therefore the conclusion of the transaction will require no supervision by the court and will not be impossible to perform since the parties have already agreed on the schedule of payment and the amount payable. That none of the parties will be prejudiced as no undue advantage would have been gained by any of the parties in relation to the subject matter whilst the dispute thereto was pending before this court under the doctrine of his pendens. He cited Bangboye v. Olusoga (1996) 4 NWLR (pt. 444) 520 at 532 Biyo v. Aku (1996) 1 NWLR (pt. 422) 1 at 39 – 41.
In reply Mr. Gadzama SAN for the Respondent contended that the R.F.P. cannot be said to have created a binding contract between the plaintiff and defendant. That Exhibit D was an invitation to treat addressed to the whole world to submit proposals for purchase of ALSCON, the conclusion of the transaction would have culminated into a Share purchase agreement (SPA).That it was then left for the plaintiff to make offer and the defendant to accept the offer. That the proposal submitted by the plaintiff sequel to Exhibit D1 amounted to an offer subject to acceptance by the defendant. That the learned trial Judge properly evaluated both oral and documentary evidence before him and came to the right conclusion that the conference of 20/5/2005 did not produce the contract that is capable of legal enforcement.
That where the trial court properly evaluated evidence adduced before it and came to the right decision an appellate court will not reverse the findings of fact by a trial court.
Having stated and considered what counsel on either side said above it seems to me that in answering the first issue, this Issue B has been settled. However for the avoidance of doubt I would still take a look though more than cursory.
In Balogun v. Akanji (1988) 1 NWLR (pt. 70) 301 Supreme Court had stated:-
“Where the trial court gave reasons for making the findings it made, an Appellate Court will be fully in order if it proceeds to look at those reasons and if the reasons are not satisfactory where the trial Judge proceeded on a wrong assumption as to the onus of proof, this misapprehension and wrong assumption may affect the learned trial Judge’s views on the evidence and on his conclusions. There an appellate court will be perfectly justified to intervene. In re Moulton, Graham v. Moulton. 22 TLR 380 at 384 Joe Sandy v. Hokoqua 14 WACA 18 at 20.
Furthermore where the trial court did not consider the entire evidence there, its conclusions are bound to be faulty and erroneous and an Appellate Court will intervene to correct such errors.”
It is plain that the situation in hand is outside the scope of what was directed in Balogun v. Akanji (supra) as in the instant case the trial Judge properly considered, evaluated and utilised all the necessary materials present and came to the right conclusion and not even for the sake of hearing my own voice would I venture to interfere. I refer to the case of Benmax v. Austin Motor Co. Ltd (1955) All ER 326.
It is my conclusion in the light of the foregoing that this appeal lacks merit and is hereby dismissed. I affirm the decision and orders of the learned trial Judge.
I order N10,000 costs to be paid by the Appellant to the Respondent.
Other Citations: (2007)LCN/2307(CA)
